US debt could trigger dollar collapse, UN warns

[EV_Ares]

Submitted by Desha Priya on Thu, 2007-05-31 16:47.Global | Americas | United States | News
The United States dollar is facing imminent collapse in the face of an unsustainable debt, the United Nations warned today.

United States debt, which had now deepened to well over $3 trillion, might turn out to be unsustainable in the rest of 2007 or next, putting further downward pressure on the United States dollar, Rob Vos, the Director of the Development Policy and Analysis Division of the Department of Economic and Social Affairs (DESA), told correspondents at a Headquarters press conference.

He pointed out that since its peak in 2002, the dollar had depreciated vis-à-vis the major currencies by some 35 per cent and by 25 per cent against a broader range of other currencies.

(((rest of article @ link below:)))

http://pressesc.com/01180629622_dollar_falls

[Vincardog]

1. IS this news to anyone?

[lonestarnot]

10. Well you'd fucking think so... What's with those 29% LOL

[RPM]

2. That explains a lot about my retirement fund.

The foreign corporations - doing well; the US multinationals - scurrying like hell to offshore to the extent possible and doing OK; U.S. domestic corporations - sucking wind.

It all makes sad terrible sense.

[Deja Q]

8. What sense?

Please extrapolate.

The problem with connecting the proverbial dots is, you more often end up with spaghetti or a web of recursive anxiety than anything real. Hence my query for where the reality is said to be.

[RPM]

9. Sense in this sense:

The currency situation can cause American equities can be dogs in one of two ways:
1) Dollar denominated securities are required to earn higher earnings because they are denominated on their exchange in dollars. As such, an American stock bought by a European 5 years ago and then appreciated 35% would be a wash transaction to the European as he would have 35% price appreciation in the shares and 35% decrease in the dollar in which it was denominated.
2) Businesses having in dollar denominated trade - i.e. businesses predominantly trading in the U.S. earnings are depreciated in value against companies doing the same volume of sales in non-crappy (that's an economic term) currency.

In light of these two points, Stocks that either are denominated in foreign currency (i.e. not traded primarily on the NYSE or the NASDAQ) or have considerable foreign sales would tend to do better than those traded in the U.S. or that have predominantly U.S. operations. Those that can do both of the former would tend to outperform all others.

The sense is that this is how my portfolio (modest as it is) has performed over the last 5 years.

BTW - if you want to know what I found terrifying recently, it was the fact that my firm's global self insurance plan is denominated in euros. It seems the partners do not believe in teh dollar as a reserve currency.

[poverlay]

3. If/when this thing starts going south I'm going to add to the slide by being one of the first to

pull out of stocks... (Euros or the delightfully fixed yuan)

No way I'm going to lose that much cash because Bush is a moran.
Plus:
If the U.S. economy tanks, so does most of the rest of the world. There will be nowhere to hide.

[indepat]

5. Since stocks can go deeply south in the blink of an eye, try to keep your eyes open

[Deja Q]

7. Exactly. It's a symbiosis.

[lonestarnot]

11. Last time I checked, the market was down.

[poverlay]

12. Yes, but if it really tanks we'll know it. I'm talking about the perfect storm that so

many economists are afraid of, and have been predicting. The weakness of the dollar, inflation, housing, debt, unbalanced service-based workforce, any loss of confidence in greenbacks, terrorist attacks, etc. etc..

If the right(Or wrong) combination of factors occurs ~things are going to get very, very bad.

[Turbineguy]

4. Any extrapolation

will lead to the collapse of the dollar. Unless of course you want another outcome in which case the future looks bright. The dollar has been in danger of imminent collapse for the past 30 years. It seems to depend on who you talk to. Rob Vos (and his Department) write papers.

[Vincardog]

13. "Unless of course you want another outcome " ? Never before has the dollar been

owed to so many and backed by so little.
The NeoConvicts have been exporting JOBs and the Manufacturing base while singing the happy song about
"What is good for Corporate Profits is good for AmeriKKKA".

The Bis is fixin to hit the rotating air oscillation device on that happy shit.

[Deja Q]

6. Dupe :(

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=1014840&mesg_id=1014840