The last time on HN that I responded to blatant ignorance with a three-paragraph summarization of a complex system, I was called rude because I said, "You don't seem to know how X works."
But regarding your original point, foreign govts and banks hold the US dollar because historically it has been strong, stable and accepted everywhere. It has no intrinsic value and recently governments are moving away from solely pegging their currencies to the US dollar as it has weakened relative to other currencies in the past few decades (eg Euro).
Another reason they take the US dollar is that they have no other choice. If China or Saudi Arabia were to say 'we want gold!' or 'we want resources!', trade relations would have stopped a long time ago.