In 2011, for first time in more than a decade, Brazil, with a rapidly expanding and wealther middle class, bought more from than it sold to the US, about 14 million dollars (my very unsure memory) difference, so some dollars returned home. - this, IMHO, will be increasing the case for many nations that would rather get something of value now that the dollar is declining in value (YoY anyway) and is ever less thought of as a safe, long term way to store value. (gold & silver, etc. are taking over that role.) Note, since you are Canadian: now Brazilians have replaced Canadians as the #1 foreign buyers of condos, etc. in South Florida but Canada is doing very well too, as US slumps. Because there are so many paper dollars outside of the US vs. inside it this is a significant part of why dollar falling in value does help US exports. I.e. even if you can buy equal item for slightly more from China, you may prefer to buy from the US to just get rid of dollars so it is not just that the falling dollar lowers the price foreigners must pay that is helping US exports. This is another example of Gresham´s law at work - hold on to your good money, and spend your bad money (the dollar) Most of the 350 billion is invested in US Treasury paper,* but that share is declining as Government too doesn´t want to watch actual value of its reserves fall. Unfortunately, there is not much of an alternative yet. I think the oil producers could make an alternative - certificates worth a barrel of oil, for example, and they may every very do so. (Doing that´s a great benefit to them. I.e. buy AT&T for X oil certificates that AT&T could exchange for dollars, or copper wire, or computers, etc. It really is not hard to make an alternative to the dollar if oil producer wanted to and most agreed to honor oil certificates. Get hundreds of BMWs for friends and pay for them with freshly printed oil certificates - just like Americans can still, but not for much longer, pay for imports with printed green paper. All the dollar offers is "full faith and credit" (assuming the printing press does not break). I´d much rather save my wealth in oil certificates - wouldn´t you? I have suggested several years ago that China, when ready to make the make the dollar collapse, could issue gold backed bonds for central banks to hold. If they became the world´s reserve currency, then, China could do what US has done for several decades - pay for things it imports with printed paper. * This must soon stop as very costly for the government of Brazil. I.e. to collect the dollars coming into Brazil to buy things, like sugar or soy beans, the government must borrow (or print Reais). Print currency makes inflation, so they mainly borrow the Reais with which to buy dollars from citizens or corporations who have earned dollars. Interest rates in Brazil have been very high and still are about 9.5% so the government collects say 2.5% on US treasury bonds it buys with dollar and net effect is to lose 7% every year. It is little wonder that Brazil and many others want to see an end to the dollar as the world´s currency for balancing trading accounts. Why Brazil and dozens of others, lead mainly by China, have made mutual currency swaps to avoid using the dollar in their trade. The two big elephants doing this within the last year were the swap between China and Japan. They agreed to no longer use the dollar. A little more than a year ago China and India did essentially the same thing, but without an actual swap of currencies. I.e. They agreed to bring their mutual trade to 100 billion (if it were measured in dollars) but balanced with any small difference to be paid (and accepted) in the currency of the deficit country - not in dollars. India got the better of this deal as in the past India has bought more from China than China bought from India. I.e. China has agreed to buy more from India. More evidence that China is able and willing to take some losses as it moves to replace the dollar for global trade. China´s biggest loss will be the ONE TIME loss it takes on dollars still unspent in their reserves. But they get EVERY YEAR thereafter great saving on th cost of their imports as US and EU will be in deep, long-lasting, depresion after the dollar has collapsed. I.e. U.S and E.U. will not be significant competive bidders for oil or minerals when in the worse ever depression. Iran´s opening the non-dollar oil bourse market this year** (the real reason why US is saber rattling about the possibility that Iran could in five or so years have and nuclear bomb but not doing much about several other quite unstable countries that already have several dozen). The UAE is already selling oil for other than dollars. The great "PertoDollar system is dying. It is only a few years now before Americans will need to make goods, at globally completive prices (much lower wages in US) to exchange for their imports - I.e. green paper no longer accepted as payment. SUMMARY; The “unimaginable” is unimaginable for most as they lack both understanding of increasingly stronger economic forces that in self interest will kill the dollar´s special status as the world´s universally accepted currency AND the imagination needed to think “out side the box” of convention and tradition to see there are many alternatives to the dollar. ** US went to war with Iraq when Saddam started to sell oil without payment in dollars. Aslo US leaned on King Saud to greatly increase production. - Sort of like now, but much more back then to economically hurt Iraq. I.e. so much surpluss oil flowed that the price briefly fell to less than $10/ barrel and Saddam got the message. - He was wisely left in power by GWB´s much more intelligent father. GWB has handed Iran what it could not take with war - control over southern Shiiti Iraq. I.e. Iran won the US/ Iraq war II, led by very stupid GWB. I don´t think there will be a US/Iran war because it is technically possible, with dozens of small subs and more than 500 small boats to mine the St. of Hormuz. Quite likely Russia, long term friend and supporter of Iran, will gvie a few, very sophisticated bottom mines that require the pressure signature of large loaded oil tanker passing over head to explode (No way US mine sweepers can simulate that.) If an loaded oil tanker is sunk in the Straight, where the channel is less than 0.5 miles wide (for deep draft ships) then Russia gets to sell its oil for ~$500 per barrel for at least a year. That is strong incentive to give a few sophisticated mines to Iran.