You didn't see this in the news.

And it's unlikely you'll read about it on any blogs or hear about it by word of mouth. Even the most extreme government watchdog groups seemed to have missed this story. . .

1. Most of the world is quickly diversifying from the U.S. dollar to hedge against the multitude of American macroeconomic problems.

2. Now, even the U.S. government is trading in its own dollars for another currency — the same currency that China, Russia, oil-bearing Gulf countries, the UN, the IMF, the World Bank, and many others have already suggested to replace the greenback as the world's main reserve currency.

3. Over the past few weeks, the U.S. Treasury has liquidated billions of U.S. dollars to more than quintuple the national foreign reserves of this very currency. This is a clear sign. . .

The U.S. Government Doubts the Dollar

But this is more than just an outright signal that the U.S. dollar is in serious trouble. We already know that much.

The U.S. government's move to further diversify from its own currency is a beacon for investors to seriously prepare for another sharp increase in commodity prices. And in just one minute, I'm going to share with you several ways to profit. But before we get into that, it's important to understand how and why commodity prices will rise, as the. . .

U.S. Dumps Dollars for Special Drawing Rights (SDR)

The Special Drawing Right (SDR) was created by the International Monetary Fund in 1969 to support the Bretton Woods fixed exchange rate system.

The value of the SDR was initially coupled to one U.S. dollar, which was still pegged to gold ($35/oz) at the time. But after the collapse of the Bretton Woods system in 1973, the value of the SDR was adjusted to reflect a basket of 16 world currencies.

Today, the SDR is currently pegged to four currencies: the U.S. dollar (44%), euro (34%), Japanese yen (11%), and the British pound (11%).

The SDR is unlike any currency you're familiar with. SDRs are not backed by assets, nor do they represent a claim on the IMF. Rather, each member agrees to back its SDRs with the full faith and credit of its own government and to accept them in exchange for convertible currencies.

In reality, the SDR is less of a currency and more of an accounting entry. However, the SDR has similar characteristics as money, such as an interest-bearing asset, store of value, and means of settling debt. The SDR is a private currency of sorts — useable and accepted exclusively by IMF member states.

There are no SDRs in physical circulation like the dollars or euros in your pocket; they have an electronic unit of value.

So the SDR can be simply created, instantly, at the will of the IMF board — which is not bound by regulations. Therefore, there is still the threat of inflation as with any regular fiat currency.

This lack of regulation — combined with liquidity issues and the fact that the SDR makes a claim on nothing — creates potential pitfalls of using the SDR as a reserve currency.

But that hasn't stopped many world governments and other international finance organizations from making a push to use the SDR as the world's main reserve currency, laying the groundwork for. . .

A Post-U.S. Dollar World

The possibility of the U.S. dollar losing its main reserve currency status has sent government officials into a frenzy. Over the past few months, U.S. administrators have been extremely vocal in supporting the dollar as the world's main reserve currency.

Of course, U.S. Treasury Secretary Tim Geithner's voice has resonated loudly from Washington. Here are just a few things Geithner had to say about the dollar in recent months:

Despite Geithner's public confidence in the U.S. dollar, the Treasury increased its holdings of SDRs in one week by 453% — worth $27.5 billion — in late August. Just take a look at the U.S. Treasury's International Reserve Position statements between August 21 and August 28:

Since that time, the U.S. Treasury has increased its SDR holdings by another 11%, and currently owns almost $40 billion worth of SDR. Current SDR holdings account for nearly 30% of the U.S. total foreign currency reserves.

This is a clear sign to the world that the U.S. government is making moves to hedge against its own falling dollar. . . and this may be the catalyst that leads the entire world to sharply diversify from the dollar.

An actual changeover in reserve currency dominance would send the value of the U.S. dollar plummeting, quite likely to all-time lows. Fortunately, there's still some time before the dollar completely collapses. And investors can prepare themselves with. . .

Easy Ways to Profit from Commodities

One of the best ways to hedge against a falling U.S. dollar is, of course, by investing in silver and gold. Precious metals have a 6,000-year history of preserving value against fiat currencies like the greenback. The most direct way of investing in gold and silver is to hold the physical metals. However, many investors prefer the ease of investing in gold and silver ETFs.

Other commodities — such as energies, grains, softs, and meats — also do well during times of a falling U.S. dollar. There are plenty of easy ways to invest in these commodities, including investing in ETFs, stocks, futures, and options.

Exposure to other foreign currencies, such as the euro and Japanese yen, will also provide a good hedge against a devaluing dollar. A simple option for investing in foreign currencies is currency ETFs. You can buy and sell them as easily as stock — without special transaction fees.

As the value of the U.S. dollar continues to decline, commodities will broadly rise. I strongly urge all investors to have at least some exposure to commodities.

Good Investing,