The existing dollar-centric system is not in the favor of most of the new powers of the world…and they are rapidly moving to reduce their dependence on the dollar.
If $12+ trillion is no longer needed as reserves for international settlement – where does that money go? Well, a relatively small reduction in dollar trade replaced by Yuan, Ruble, Real, etc. (say 5%-10% over 2014) would free up $600 B to $1.2 T to move where dollars are still readily accepted…the US of A. Typically, these dollars would be levered up (say conservatively 5x’s)…and voila, $3 trillion to $6 trillion of purchasing power is introduced to America in 2014. Things like stocks, bonds, and Real Estate would be very positively pushed higher and higher (rents, insurance, etc. would also be unwelcomingly pushed higher as wages remain flat due to structural unemployment issues.
But let’s say in 2015 the pace of BRICS non-dollar trade continues expanding and international settlement in non-dollars grows by 10% to 20%…and 10% to 20% of dollars are no longer needed as reserves to buy oil, wheat, finance trade, etc. This is about $1.2 trillion to $2.4 trillion formerly held reserves cleared to go looking for their home…the US. $1.2 trillion to $2.4 trillion levered again very conservatively @ 5x’s is $6 trillion to $12 trillion in “hot” money looking for assets. With just a fraction of all the inflation the US exported over the ’71-present period coming home…this creates what amounts to a hyperinflationary-monetary dollar overdose in America.
Once these things start, they create a momentum of their own and eventually a likely counter by the administration to freeze out these dollars and the likely panic this ensues both domestically and internationally.