Wiki has a good article. Prior to Nixon taking us off the gold standard we were operating under a currency exchange rate convention established at the Bretton Woods conference in the closing days of WWII. The price of gold was to be at fixed at $35/Oz. The U.S. agreed to redeem dollars at that price and the international exchange rates were related to the fixed price of gold. In 1971, while the U.S. was redeeming international dollars @ $35/Oz., gold was selling elsewhere for $40/Oz. There was no way for the U.S. to maintain the price at $35. This is why a gold standard is impractical today.
John Maynard Keynes foresaw this problem and other problems associated with a single country's currency being adopted as the Reserve Currency. Keynes argued against the gold standard at Bretton Woods but was opposed by Dexter White and the U.S. delegation whose arguments held sway. This is how after WWII the U.S. dollar became the Reserve Currency in which virtually all international trade was carried out. That status, which has been an advantage to the U.S., but also comes with some drawbacks, is now threatened. For practical reasons the U.S. dollar will likely continue for a long time as one of the reserve currencies for trade, but increasingly, pricing and trade is being carried out in Euros as well.
I want to mention one of the reasons the adoption of the U.S. dollar as the Reserve Currency for International Trade is an advantage to the U.S. This is something often not fully appreciated. Because the dollar is the reserve currency, the world is awash in U.S. dollars. Some other countries have even adopted the Dollar as their local currency, e.g. Ecuador. What this means in a practical sense is that Central Banks around the world maintain large dollar denominated inventories to facilitate trade. Consequently Central banks have a vested interest in helping to maintain the dollar's stability. It would not be in their interest to see a sudden collapse of the dollar. This affords the U.S. some extra leeway in maintaining the stability of its own economy via Central Bank operations.
