Many people are waking up to the changes going on in world trading markets which are impacting the reserve status of the US dollar. We are seeing the Russians and the Chinese trading for oil in rubles and yuan. Some countries* are proposing an alternative to the SWiFT currency exchange process which is based on US dollars and subject to US regulations.
These are cracks in the system which facilitates easy trading between countries and shows the vulnerability of the US dollar as a reserve currency. If the trend continues, the dollar will lose its reserve currency status.
This has significant implications on the strength of the dollar. Countries must hold large amounts of US dollars to be able to conduct foreign trade and use the SWIFT system. Without the reserve currency status, there is no need for foreign countries to have large amounts of US dollars.
What will they do with these dollars…… They sell them, most likely back to the US. Large scale selling of US dollars will depress the value of the dollar and raise the price of Gold. Something to watch carefully in these tumultuous times.