UN Warns of Risk Of “Collapse” Of Dollar

05-31-2011 • ZeroHedge.com

The United Nations warned on Wednesday of a possible crisis of confidence in, and even a "collapse" of, the U.S. dollar if its value against other currencies continued to decline. The UN’s mid-year review of the world economy did not get covered widely. The UN economic division said that a crisis of confidence in the dollar, stemming from the falling value of foreign dollar holdings, would imperil the global financial system. This trend, it said, had recently been driven in part by interest rate differentials between the U.S. and other major economies (see table above) and growing concern about the sustainability of the U.S. public debt, half of which is held by foreigners including the Chinese government. Gold in US Dollars – May (Tick) A reminder, if ever one was needed, of the importance of having a diversification into gold and silver bullion. Cost averaging remains a sensible strategy for those concerned that there may be further short term weakness in bullion markets. On the 100th anniversary of the launch of the Titanic, governments internationally appear to be engaged in an exercise of “rearranging the deckchairs” prior to the ship sinking. In the same way that there was a popular perception that the Titanic was “unsinkable” so today the real risk posed to the euro, dollar, yen, pound and other fiat currencies is largely unacknowledged.