Wednesday, 1 June 2011

The Dollar on Course of Collapse

Will that mighty eagle tumble out of the sky; oh sorry; in case you find yourself in a quite dense fog and cannot figure out which is the bird I am referring to, well they are envisaged by many as an emblem of grace, nobility, strength and surprisingly enough thievishness and the latter makes it really a very appropriate emblem for the United States of America, but that’s not the question that I bedevil you with - well wait for it – will the dollar collapse; that’s the United States dollar of course?"

Well according to a major report by the United Nations it is possible, it may even be probable!”

The report, a mid-year update to the 200-page summary of the world economy issued earlier this year, says that the precipitous fall of the dollar since the start of the new millennium portends the possibility of a destabilisation and “crisis of confidence” of the world reserve currency.

The report also warns that rampant, uncontrolled unemployment, particularly among young people, is likely to trigger political upheavals similar to those seen in Egypt and Tunisia. It notes that, at the end of 2009, “there were an estimated 81 million unemployed young people, and the rate of global youth unemployment stood at 13.0 percent, having increased by 0.9 percentage points from 2008.”   

 It say’s that “between 2007 and the end of 2009, at least 30 million jobs were lost worldwide as a result of the global financial crisis.” Thus, “The global economy will still need to create at least another 22 million new jobs in order to return to the pre-crisis level of global employment. At the current speed of the recovery, this would take at least five years.”  

The report notes that rising food and energy prising have greatly diminished the real incomes of the world's poor. If prices continue to rise at their current levels, this “could push 64 million people below the poverty income threshold of $1.25 per person a day.”

The report paints a bleak outlook for economic growth in the developed world, noting the recovery “remains weak” and is likely to “moderate.” It states, “Output growth... is feeble in many developed economies,” particularly those that, like Spain, Greece, and Portugal, are facing austerity measures under the whip of the sovereign debt crisis.

All of this indicates an explosive economic and financial crisis and a direct confrontation over austerity measures, fought between the working class on one hand and the banks and governments on the other.

You can read the full report here:

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