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Sleeping On Your Old Saggy Dollar-Filled Mattress (UUP, FXA, BZF)

 The money on the sideline is enormous.  The greenback sits in money markets, bank accounts, Treasuries, and other "sagging mattresses", making zilch.

 Do you move it from the bank to the CD paying 1.4% or to the MMF with its 0.75% or better yet to the 2 year Treasury paying 0.9%?  Well you get the idea.
With so little pay out to hide out the cash, is it worth it?  After all, what exactly has the dollar been doing over the last year as it's been sleeping the those mattresses?
Diving.

To hold dollars, "low risk" products have given almost nothing back and returned "weaker" dollars.

     Technically, throughout the year,  UUP rallies have moderated becoming weaker and  shorter until we are back to the lows we saw last year.  Last year, the UUP fell to 22.5 where it held from March to August.
     So have we bottomed?  Will the mattresses reinflate?What's the smart money think?
    The buyers of 30 year Treasuries seem to think so.  They must because they are betting that the U.S. will return stronger dollars down the road plus their 4.18%.  Shorter duration Treasuries have performed well as  buying has sent yields low.
    Others have moved into other currencies and overseas holdings.  They've been killing the dollar. 

 
(Even Mexican mattresses are better than ours.)

     Lastly, China, with the greatest overstuffed dollar mattress in the world (next to us), has been spending their dollars on iron, copper, coal, gold, and buying resource-rich companies.  China has been establishing currency swaps to do trade in yuan with  South Korea, Malaysia, Argentina, Belarus and is likely to work out a similar deal with Russia. (see 
http://www.smh.com.au/business/china-russia-consider-currency-swap-deal-20090901-f5mg.html).  Over time, they will be able to trade outside the dollar.  Their trade surpluses will bring back other currencies.
      It looks to me like dollar bulls will fight the move lower.  Technically, the drops and recoveries have all been softer and I think we will tread water here for a while.  However, the next move is down in large part because China is diversifying its portfolio; in other words, flooding the markets with ever weaker dollars in exchange for other currencies, gold, mines, and oil fields.  Sleeping on a dollar-filled mattress should not give you the best night's sleep.