Yen's History a Cautionary Tale for Yuan

For about seventy years, the U.S. dollar has been the currency of choice for central banks around the world when choosing how to allocate their foreign exchange reserves. Presently, the dollar makes up about 60 percent of global reserves. Its preeminent role as a store of value for foreign governments benefits America in a number of ways, not least of which is the ability for the U.S. government to borrow at lower rates than it would if the currency's role were less prominent. Yet, pick up any article on the international monetary system written in the last five years and there is a good chance you will read the following refrain: The dollar's halcyon days perched unchallenged atop the global reserve currency hierarchy may be ending. Partially an unavoidable result of America's relative economic decline and partially a consequence of American financial mismanagement as evidenced by the global financial crisis of 2008-2009, there is a growing chorus of experts saying that a multipolar international currency system will soon supplant the unipolar era of the dollar.