Dollar Dominance Falters as Countries Seek Alternatives

The US dollar remains the world's dominant reserve currency, but countries are seeking to reduce their exposure due to America's fiscal problems and Washington's willingness to use the dollar-based financial system as a weapon.

Last week, the 10-year Treasury yield surged to 5.23 percent, its highest level since 2007, reflecting falling bond prices and investor reluctance to lend money to the US government.

Countries such as Canada are questioning the dollar's dominance, with Canadian Prime Minister Mark Carney arguing that the world should seek alternatives or reduce the dollar's role as the dominant reserve currency.

The debt burden is driving the 'debasement trade,' where investors and governments hold tangible assets like gold and silver to protect against the declining purchasing power of fiat currencies.