We all know about the dominance of the U.S. dollar on global trade. Some of us know how we got here. For the rest of you, here is a quick summary:

It was nearly 70 years ago to the day, hundreds of delegates from 44 nations met in Bretton Woods, N.H., to create a brand new financial system. World War II had just ended.

Europe was destroyed and since the United States was the victor as well as the largest economy of the world, it was easy for them to rule the roost. Besides the obvious advantages, the United States was also the only major power with its productive capacity intact.

Therefore, global trading would always be settled in U.S. dollars. This meant that if two traders in India and Germany want to buy and sell rice, they would settle the trade in U.S. dollars. The German trader would have to buy U.S. dollars selling his Deutsche marks to pay the Indian merchant. The Indian merchant would then sell U.S. dollars to buy his rupees. All global trades would have to be settled by a U.S. bank since the currency was U.S. dollar.

So you can see how important the U.S. dollar became to global trade and how important U.S. banks became to the whole world.

The United States demanded the spoils of war and got more than its fair share. Every nation would hold dollars as the primary reserve currency, and the dollar would be redeemable for gold at $35 per ounce.

As time progressed, the United States realized that the demand for U.S. dollars was constantly growing and it could print more dollars than the $35 per ounce of gold allowed. The printing presses warmed up and the United States started spending like a drunken sailor (no offense meant to sailors) and things got so out of hand, that by 1971 we had too many dollars and not enough support of gold.

Many nations started panicking and started handing in their dollars for gold. Sensing a total collapse of the dollar, President Nixon unpegged the dollar to gold completely. In my view, this was nothing less than total betrayal by the United States to the whole world.

Since then we have seen phenomenal growth in world trade. Countries like Brazil, Russia, India, China and South Africa (BRICS) have seen their share of business rise without much representation into the global trade bodies like the World Bank and the International Monetary Fund. At this stage, they are fed up with being treated poorly and have decided to set up a parallel system so that they can flex their economic muscle — as they deserve to.

In a matter of months, the United States will be overtaken by China as the world's largest economy. The total combined GDPs of China, India, Russia and Brazil are roughly the same as the United States and European Union combined.

Just as the United States was the biggest player back in 1944, China is the biggest player today. So it seems clear that the renminbi will become a critical component of a new financial system. The yuan is already the second most-traded currency in the world. Major corporations, such as McDonald's, are issuing yuan bonds globally. State governments, including British Columbia, Canada, have issued state bonds denominated in yuan. Renminbi settlement banks are being set up in London and Canada. The central banks of Luxembourg and France have trade settlement lines set up in yuan.

This week the New Development Bank was established by the BRICS during their meeting in Brazil. The bank will be headquartered in Shanghai and India will have the first presidency of the bank.

It is now only a matter of time before the New Development Bank gains in strength and starts dominating the financial scene. And it is now only a matter of time before the U.S. dollar loses its crown as the reserve currency of the world.

The tragedy is that this could be totally avoided. If the United States had been more considerate and treated the emerging powers with a modicum of respect, we might not have been at this fork in the road today.

Have you sold your dollars yet?