Today on the CNN show GPS with Farid Zakaria, the anchor had a segment about China's complaint regarding the US bond downgrade. He has said that the Chinese are angry at their government for investing in US securities and that they see themselves as doing America a favor. He went on to counter this last statement by saying that China has no alternative then to invest in US securities as the EURO is on shaky ground and Swiss Francs and the Pound sterling can't provide enough currency for china's growing government reserve. This got me thinking: it is true that as a currency there seems to be no alternative to US securities, furthermore the value of Gold is very speculative so it no longer makes sense for government to invest in it. But this said what about another commodity that is being traded, that can be stored safely and easily and that will always have value: Oil. Indeed, if china wanted to store its wealth in something, Oil would be the best solution. Another would be iron, or copper or really any other materials used for industry or that can provide energy. I think in trying to find a future global reserve currency the governments of the world should seriously consider one that is values in real world commodities that are used and will continue to be used for energy and industry. Now of course if china were to try to buy a lot of oil immediately it would raise the price, but it could do it gradually. Same could be done for any other commodity.