What makes the world reserve currency status such a precious spot?
And
Do we need a world reserve currency?
1. http://en.wikipedia.org/wiki/Reserve_currency
2. who is we?
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
In short, because there is artificial demand for a reserve currency. Other countries want to buy the reserve currency to put it in their vaults, and the issuing country can therefore inflate it's money supply without immediate price inflation. Money printing normally just makes that money worthless, but if other countries want to buy that money as a reserve, it disappears in vaults and printing more doesn't cause an increase in the money supply out in the wild. You can print money and get stuff for it from other countries, and print more money and get more stuff, and there's no inflation. It essentially comes at the expense of other countries who have to expend their goods in return for paper that you just print. It's a great gig if you can get it, because those in control of the reserve currency, the bankers, can print massive amounts of purchasing power at the expense of everyone else. That's why ruling classes in different continents are attempting to establish more centralized, powerful currencies in favor of local currencies, e.g. the Euro.
Naturally countries want some currency as a reserve that is stable enough to not lose value while it's sitting in their vaults. That's why there is some benefit to bigger, centralized currencies like the Euro and the Dollar. But without a unified reserve currency countries could just store whatever currencies or assets they want as a reserve, say precious metals or variety of different currencies. Big, powerful currencies are really bad for the citizen, because his ruling class has fewer restraints to inflate. More inflation means you can afford fewer groceries. That's one of the reasons why European countries that didn't go along with the Euro are doing so well. And poor countries are worse off because they have to spend their productivity to buy worthless paper from rich countries, that the rich country can just print at will. I guess they are forced into that system by Anglo-American military and political leverage.