Specialists
believe that the US will lose almost 45 percent of its euro in the near
future
Experts of Standard &
Poor's forecast a global economic collapse. The
collapse will be caused with the demise of the US dollar rate against the
European currency by more than 30 percent. The dollar, specialists say,
may lose almost 45 percent of its current value against the euro. However,
it is obvious that even a 30 percent reduction will affect the
international economy greatly. 
Standard & Poor's (SP) ties
the possible decline of the American currency
with the imminent rise of the European economy and the payment shortage of
the USA, which made up 6.4 percent of the nation's GDP last year ($790
billion).
SP analysts emphasize the
restricted growth of the USA's GDP, which has been behind the level of ten
percent for quite a while. US assets - securities and real estate -
successfully compensate the 6.5 percent payment shortage of the GDP at
present. The assets enjoy very good demands on the market: the growth of
their cost outstrips the growing volume of the payment deficit. SP
specialists believe, however, that the cost of the
above-mentioned assets has been increasing for a very long time. This
process is expected to stop sooner or later, SP analysts say. If it
happens, the issue of the US dollar stability will surface immediately.
The global economic collapse will follow shortly after that.
The European Central Bank has
expressed its concerns with the forecast from Standard & Poor's.
European financial specialists say that the demise of the American
currency will endanger the global economy on the whole. Alex Weber, a
member of the ECB council, stated during the recent Economic Forum in
Davos that
international investors do not pay enough attention to the risks which the
global economy has to face at the moment. The President of the European
Central Bank Jean-Claude Trichet agreed with his colleague. According to
Trichet, the world will have to pay a huge price for the ongoing increase
of the payment deficit in the USA.
The forecast from Standard
& Poor's contains several contradictions as well. The US dollar has
very strong defenders outside the USA - China and Japan.
The two countries acquire the stocks of the US Treasury to support the
dollar. The dollar share makes up 70 percent (almost one trillion US
dollars) of the Chinese currency reserves despite the continuing process
to reduce the dollar constituent in China's reserves. Therefore, China is
highly interested in the preservation of the dollar value.
While Standard & Poor's
specialists talk about the looming collapse of the American currency,
Citigroup analysts predicted the end of the dollar reign in the world
economy back in 2005. Nowadays, Citigroup forecasts the fall of the
European currency and recommend investors to sell
euros.
If the pessimistic
forecast from Standard & Poor's is destined to come true, the
declining dollar will affect the world economy entirely and lead to
unpredictable consequences. The crisis will obviously strike a serious
blow on the Russian economy too. The decline of the dollar rate and the
growth of the euro may become a positive factor for many Russian
producers, though. If the euro grows, the Russian goods exported to Europe
will become more competitive.
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