Dollar And Yen Fall

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.

“There is a real sense of both desperation and denial about the debt crisis and indeed the global nature of the debt crisis.

Many insolvent western governments continue to simply “kick the can down the road”. This may buy time but ultimately the misguided solution of creating more public debt to cure a private debt crisis will be seen as a blunder and will likely lead to even greater financial and economic challenges.”  Tyler Durden – ZH

Full article at:  Zero Hedge

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