Absent a special drawing rights system, which, in theory, could be administered by the International Monetary Fund, nations who have expressed an interest in a 'super-currency,' such as China and Russia, would have to establish some super-national monetary body, a la the European Central Bank, to control the super-currency's money supply, circulation, bank reserve requirements etc. And as the difficult process that marked the start of the ECB demonstrated, the decision to form a super-currency would have numerous implications – fiscal, monetary, political.

Super-currency would weaken U.S. dollar

If a super currency was launched by, for example, Russia and China, in conjunction with other emerging market economies, the immediate impact on the dollar would be decidedly negative: the dollar would weaken further, as U.S. Federal Reserve Chairman Ben Bernanke indicated, with accompanying inflation pressure.

The dollar would weaken, because, among other reasons, all those governments who are holding dollars for financial transactions would suddenly not need as many dollars: they would have a new unit of account and medium of exchange: the super-currency, to complete them. The result? More dollars in supply means each dollar is worth less, in this case the dollar would fall versus the world's other, major currencies.

Dollar Analysis: Congress should take heed all of this talk about a 'super-currency' or a new global reserve currency. The dollar's role as a reserve currency – and the upward pressure it places on the dollar's value – is now being questioned, due nations' concerns about a further weakening in the dollar, and hence the purchasing power of those who hold a large amount of dollars, due to the U.S.'s enormous budget deficits. In other words, the period of the 'dollar bonus' may be coming to an end, which would lead to higher U.S. inflation and interest rates.

What can Congress do to support the dollar, its reserve currency status, reduce the risk of inflation, and help keep long-term U.S. interest rates low? Cut unnecessary spending and raise taxes to demonstrate to other, major economic powers that the U.S.'s fiscal condition will achieve a balanced budget in less than ten years.