The question of how currency unions break down has come to the forefront of the European debt crisis. The particular concern is Greece ceding from the Eurozone.
I have been following the Greek crisis and have posted a significant number of the news articles regarding Greece to my Twitter feed (which is linked on this page). Continue reading
The Globe and Mail is reporting that countries might move their foreign currency reserves to a basket of currencies such as Special Drawing Rights.
The BBC has an article about requests by China to switch from the single-currency reserve system to a an IMF-backed reserve system.
The suggestion made by China is to move to a Special Drawing Rights (SDR) (IMF factsheet) unit of account. SDR’s are backed by a basket of currencies, predominantly the U.S. dollar at present (44% according to Wikipedia).
According to Bloomberg: Euro Currency of Choice as Fed Easing Devalues Dollar, financial advisors are recommending investment in the Euro. They also highlight a significant change in perception on the U.S. dollar.