[jyl]

Agreed. Being displaced as the world's reserve currency would be a negative. But I think that's a low probability, and the downside in that low probability event appears manageable. Low probability of a negative but manageable event = not something to freak out about.

The reason why I think it is a low probability is because I don't see a good alternative global reserve currency.

JPY - Japan's national debt situation is the worst in the industrialized world and that economy can't seem to grow.

EUR - probably the best alternative but the national debts in the EU are for the most part worse than the US, you're actually seeing credit downgrades of some countries (Greece), and the EU's economic growth rate is inferior to the US

RMB - no-one is ready to trust the Chinese govt yet, they manage the RMB to the USD anyway, and the Chinese economy is not yet big or mature enough - yet.

Gold - it should be obvious to all but the gold nuts that the world cannot go back to a gold standard, either as a backstop to currencies or to conduct business in.