No Longer Just Crazy Talk: UN Warns the Dollar Could Collapse

On Wednesday, the United Nations warned that the U.S. dollar could collapse. While some economic commentators have warned of such a scenario for years, it has still been largely characterized as a fringe idea. According to Reuters, in the U.N.'s mid-year economic review, U.N. economists warned that a loss of confidence in the dollar would put the global financial system at great risk. The consequences of a U.S. dollar collapse may be so significant as to be difficult to predict. It may be terrible for U.S. equities, which are priced in dollars. However, a collapsing currency might mean that while the real value of equities decline, their nominal values stay flat or even rise. That scenario may be dangerous for traders looking to execute a simple short-market strategy. Gold may do very well if the U.S. dollar collapsed. Given the pressure on the euro, and the Chinese government's unwillingness to allow the yuan to float freely, gold may be the only refugee for savers looking to park their funds. In that case, traders might want to consider the SPDR Gold Trust GLD. For a play which may be slightly riskier, investors might wish to look at Market Vectors ETF Trust GDX. GDX attempts to return a value corresponding to the general performance of companies that mine for gold. If investors want to observe the potential ramifications of a dollar collapse, they need look no farther than Belarus.