What You Should Know About the World's Reserve Currency

The weakening of the U.S. dollar has led to an increase in the demand for gold. Gold has been called the "anti-dollar." It's the ultimate reserve currency. When confidence in the dollar is shaken, more financial institutions and people buy gold and the price tends to go up.

For those of you who are curious to see how the world's reserve currencies have changed over time, here is a link to a table that shows the percentage of the world's currency reserves held in different currencies from 1995-2006.

And here's one last thing I want to tell you: Did you know that Canadian dollars are called loonies? On the back of the coin is a loon, which is how the coin got its unusual name. Last week, the loonie had a really big day.

It closed above the U.S. dollar for the first time in more than 30 years. The strength of the Canadian dollar means that prices in the U.S. are low by Canadian standards.

In fact, Steve, who lives in Canada and copyedits the Money Girl transcripts, told me that he likes to buy things like books, clothes and computers in the U.S. because they're so much cheaper. The loonie, like the euro, has also been gaining strength against the U.S. dollar.

Cha-ching! That's all for now, courtesy of Money Girl, your guide to a richer life.

As always, everyone's situation is different, so be sure to consult a tax or financial adviser before making important financial decisions. This podcast is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice.