China alone holds some $895 billion of US treasury bonds. All the countries in the world have to keep US dollars for the simple reason that almost all international trade including the oil trade is conducted in USD currency.
The US stopped making things like cars, ballpoint pens and TV sets years ago. It didn't have to make anything. Other countries made all the things that America needed and America bought everything from these other countries. So the only thing that America actually had to produce was US dollars or US treasury bonds. Whenever America has felt it was running out of cash as happened in the wake of the subprime crisis, when the Obama government authorised the pumping in of almost a trillion dollars into the economy to avert a total meltdown, all it had to do was print more money. Then it could go on throwing away money like it's nothing but bits of paper because that's exactly what it is: bits of paper, more and more of which can be printed up, as and when need arises.
The so-called almighty Dollar is not backed by anything of real value. It is not backed by gold. It is not backed by any tangible goods that America produces and sells to the rest of the world because America doesn't make any such goods. There is only one thing that imparts value to the dollar: universal gullibility.
America has successfully pulled the wool over the world's eyes. The international community has been conned into paying to keep the US in the high-spending style to which it has become accustomed.
The more America spends and the more dollars it prints, the more the world laps up those dollars. The euro was supposed to be a counterbalance to the dollar monopoly. Unfortunately, fiscal indiscipline in Greece, Ireland, Spain, Italy and Portugal, has eroded confidence in the Euro. International investors are busily buying dollars and US bonds as a hedge against economic uncertainty. That's not like a drowning man clutching at a straw; it's like a drowning man clutching at an electrified wire to save himself.
Maybe it's time for the world's two fastest growing economies, China and India, jointly to come up with a viable alternative to the dollar.