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What Happens If The Dollar Loses Its Status As Reserve Currency?

Earlier this month, the People’s Bank of China announced that it would double the allowable trading range for the yuan against the dollar to 2 percent from a midpoint rate it sets every day. This move provides evidence that the government is moving toward a more market-driven economy.

I’ve noted that there’s a direct correlation between announcements that China continues to send signals that it’s revamping its financial sector, loosening its grip on the its currency, the yuan, and calls/emails I get from investors worried about what will happen if the dollar loses its status as the world’s reserve currency.

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