The Dollar-defending strategy in the past years might have announced the beginning of a historical decay. This isnât a certain fact at all. It is only a hypothesis or a possibility. However, beyond any doubt, this possibility has to be taken into consideration.
The new thing in the picture is the combination between the appearance of an alternative to the dollar and the use of certain fabulous currency reserves by several new players in the world market, especially the Asian countries, some of which are pretty determined to take the dollar out.
Since it is the main part of the worldâs currency reserves, the dollar is now part of the reserves of many countries that are strongly coming from behind in the international competition, even if they are successful countries or countries with important natural resources that, due to the great overplus in their external commerce, have taken a lot of the U.S. Dollars outside the U.S. China, India, Russia, the Islamic or Latin-American oil exporting countries are just a few of the most significant examples. These countries continue to accumulate currency reserves because they use the money from the massive exports to systematically buy foreign currency to allow them to maintain their national currencies at competitive levels. China, for example, the currency reserves of which reach 1,100 billion US Dollars, keeps more than 70% of them in USD.
The dollarâs fate has come to depend on the movements dictated by the economical and political interests of others, of enemies or competitors of the United States. As a reply to the American pressures, Iran has decided to change to Euro the dollar component of its reserves. It also decided to only use Euros for the oil transactions. Latin America took a similar decision as far as the reserves are concerned simply because it cannot use Euros to sell oil in the U.S. Th
