Originally Posted by kevincure

As for the dollar being an international reserve: I dont' know that that's terribly important for the value of the dollar. If China and OPEC stop using dollars, interest rates on dollars would rise, but multinational firms could just borrow in another currency anyway and hedge the currency risk, so it's not a terrible problem. Also, despite the US budget problems, our deficit is still not a very high percentage of GDP (many Eurozone countries have a higher deficit) and the Fed has a much stronger inflation-fighting reputation than the ECB, simply because the ECB hasn't been around very long. I imagine OPEC and China will diversify but it seems impossible that they'll outright drop the dollar.