With the economy in the doldrums, soaring unemployment and ballooning deficit, immense pressure has been put on the greenback. Its position as a reserve currency is on trembling ground, as most central banks are looking for alternatives.

Of late business media has been publishing headlines like "the dollar is being abandoned", "oil could be priced in other currencies besides the greenback", and "central banks are diversifying reserves away from the world's reserve currency". Do these sound familiar? Are the reports on the dollar demise premature? However, when some of the world's famous investors like Warren Buffett warn of dollar's decline, investors take note. He warned that the US debt load threatened to turn America into a `banana republic economy'. A flood of greenbacks from the Federal Reserve and the Obama government may be necessary to prop up the ailing economy. He suggests that the US government must control its unprecedented levels of debt in the future or risk the consequences.

Most currency market analysts say death cometh for the greenback and it is in for more trouble. Chinese central bank, the largest foreign holder of US debt ($2 tn), foretold that greenback is likely to lose its status as the world's reserve currency. Even the International Monetary Fund (IMF) is alarmed by the mighty currency fall. Willem Buiter, a former Bank of England policy maker, has warned "Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets."

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