The Globe and Mail reports in its Saturday edition that last week Bank of Canada Governor Tiff Macklem said the U.S. dollar's future role as the global reserve currency remains dominant for now due to a lack of alternatives. Guest columnist John Rapley writes that Mr. Macklem, however, noted that its effectiveness as a hedge in times of stress has diminished. While the greenback is central to international trade, it is losing value against currencies like the euro and yen, and significantly, it has dropped compared with gold, which has surged 50 per cent this year. Gold is rising against all currencies, increasing over 40 per cent in Canadian dollars in the past year. This indicates that modern fiat currencies are losing value rapidly against gold. Central banks are significant players in this trend, as their foreign currency holdings have remained largely unchanged, still heavily favouring the U.S. dollar. Major central banks are cutting interest rates despite inflation exceeding targets, leading to a faster growth of the money supply. Since the start of the year, the world's four biggest central banks have increased the money supply at an annualized rate of 7 per cent. Still, gold has little use as a currency.