From my favorite economist Barry Ritholtz
In the land of the blind . . . There are four major currency blocs — the dollar, the euro, the yen and the yuan. With so many factors against it, why would anyone want to own U.S. dollars? Because, well, it’s the least ugly currency of the lot.
The Europeans are still not only dealing with an ongoing banking crisis. Portugal, Ireland, Italy, Greece and Spain all have solvency problems. Lacking their own currency, these nations cannot simply print their way out of debt. Thus, there is a small but real possibility that the European Union will not hold, and the euro will collapse.
Japan is even worse. It was mired in a multi-decade slog, and then the earthquake/ tsunami/nuclear crisis rocked it back on its heels.
That leaves China. Despite market reforms, it is still a totalitarian communist regime. Western nations are none too keen about making its currency the reserve of the world.
To the dollar then. In the land of the blind, the one-eyed man is king.