U.S. recovery gets setback as countries dump dollar reserves

Many Americans have been led to believe that the worst of the financial crisis is over, but last week the U.S. economy was dealt another heavy blow that may signal further disaster is still to come.
The Financial Post reported last Wednesday that "...the U.S. dollar slid against most major currencies... hitting a five-month low of US $1.3775 against the euro..." The day after, Florida's BankUnited FSB was seized by Federal regulators in the largest U.S. bank failure so far this year.
The sudden dollar decline and seizure of Bank United is a flashback to the U.S. economic turmoil of late 2008, and a brutal reality check for many who thought the worst was over.
There is also a great deal of concern surrounding the U.S. triple-A credit rating, which many speculate will be downgraded along with Britain's triple-A rating. Such a move would signal a decline in America's position as a reliable borrower on the international market.
Other nations are apparently following suit. The Financial Times quotes top Brazilian officials as saying that Brazil and China are also working toward "using their own currencies in trade transactions rather than the U.S. dollar..." This scenario, says economic commentator Peter Schiff, is "not only a possibility, it's inevitable."

But Schiff, one of the few to predict the housing market crash, thinks this change in the long-standing status quo should be welcomed, not feared.

"When [the U.S.] decouples, the world will thrive," Schiff told CNBC. "The world doesn't need our consumption, we need their production. The global economy is fine without propping up the U.S. economy."
Quotes from the haaretz