US should "give up on the dollar"

The push to replace the U.S. dollar as the world's reserve currency has been gaining steam, with one expert arguing that America "must give up on the dollar."

In a Financial Times op-ed, Michael Pettis, a finance professor at Peking University, said U.S. policymakers should lead the charge to create a more diverse reserve system, "in which the dollar is simply first among equals."

The dollar has been the dominant reserve currency for decades, with central banks and other institutions around the world amassing vast reserves.

Pettis argues that this has resulted in dangerous trade imbalances that threaten to destabilize the global economy. He contends that countries such as China have been able to "game the system" by stockpiling dollars, which has allowed them to grab a larger share of global demand for goods and services.

Read the rest of this article at CNN Money.

Sovereign Investor:   Is it really doom and disaster for the US dollar?  If so, how are you gearing up for the inevitable changes the fall of the world's reserve currency would bring?  If not, what makes you so convinced?  Here's a graph of exchange rates over the past decade (Source:  IMF World Economic Outlook, April 2011):