In a report published Thursday by a German magazine, former U.S. Federal Reserve Bank Chairman Alan Greenspan warns the dollar’s days as the world’s reserve currency may be numbered, and that a trend to replace the dollar has already begun.

The predictions are particularly shocking considering the source. Greenspan was the central banker responsible for overseeing the dollar’s value for over 18 years up until 2006.

According to an advance copy of the interview published in Stern magazine, Greenspan said it was “absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency.”

If the former chairman’s words prove true, the dollar’s value could be in for a distinct downward slide. Greenspan noted that at the end of 2006, two thirds of all currency reserves were held in dollars, as opposed to 25 percent for the euro. If central banks continue to increase euro proportions at the expense of the dollar, not only will dollar demand fall, but excess dollar supplies could start flooding the market.

In fact, this trend appears to already be under way, as evidenced by the recent breakdown in the dollar’s value. Over the past week, the dollar has hit new all-time lows against the euro, and multi-decade lows against many other currencies. The dollar also reached all-time lows against oil and wheat, and reached a 28-year low against gold.

Greenspan also stated that although more countries still use the dollar as a reserve, the greenback doesn’t actually have “all that much of an advantage” over the euro any longer. In terms of cross-border trade, the dollar accounts for 43 percent, while the euro is used in 39 percent of such transactions.

The trend to adopt the euro as a reserve currency has greatly benefited Europe. In addition to the prestige and power gained by the European Central Bank, Europe’s economy has also profited. With the euro’s newfound role, Greenspan says Europeans are beginning to experience the benefits that reserve currency status has given Americans—including lower interest rates and higher growth with diminished inflation concerns.

Loss of reserve currency status would be a huge blow to the United States. Not only would it drastically undermine the dollar’s value, but Americans would also lose many unique economic blessings that they have become used to. Economic conditions in the U.S. may be about to radically change.

Are you prepared to weather the coming storm? For more on this subject, read “Storm-Proof Your Financial House.”