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The "DXY" clings to 80

The US Dollar index (DXY) clings to the 80 level, which has proven to be support on and off for decades (see 25 year chart of the US Dollar Index). However, as we all remember, less than a year ago the DXY plunged to 70 before bottoming and rebounding to 90. That rebound was triggered, some say, by the financial crisis, which resulted in a massive repayment of debt denominated in US Dollars.

Now that that debt repayment, or deleveraging, has passed its most intensive phase, demand for dollars appears to be sliding. Although many central banks are issuing debt and printing money, the US seems to stand out both in terms of the absolute amount of debt issued and money created, but in terms of the relative amount of debt issued and money created.

We're becoming a Banana Republic, printing US Bonds and US Dollars like confetti, that no one wants. Remember the phrase "backed by the full faith and credit of the US Government?" That doesn't seem as solid anymore, now that the Law Professor President and His Students in Congress are spending money so fast they don't have time to read the legislation authorizing the spending.

Long: DBO, GLD, UDN, FXE, BZF

Watching: FXA, FXC, FXF