Bailout and US Dollar - operation "Wash out".

Operation "Election Jump Start Economy" consisted of two very important phases:

1. Painting in the chart reversal on USD by means of buying treasuries by FED and foreign Central Banks, trashing the Gold ans Silver market by going short in "Too big to fail" banks.

2. Bail out of Fannie Mae and Freddie Mac by monetising their debt and increasing government liabilities by 5.2 trillion dollars. On its asset side government is taking depreciating in value housing and diminishing cash flow from people unable to service their debt.

Immediately after announcement in Asia we saw the free market in action with USD falling against GBP to 1.78, AUD to0.83 and Euro 1.44. Gold went up to 819 USD/oz. After opening on Monday in USA Gold went under pressure again and USD rallied as a vote of confidence with rising markets.

Gold now is at very important threshold testing long line support at 777USD. Further rise in USD did not brought Gold lower then previous low so far and this week will be very important. Rally in the markets spiked by bailout faded today and we are very close to Election Rate Cut just to keep things together. Euro now is in comfortable zone at 1.4 level and further "rally" by USD will bring US export to a hold. Something has to give and very overbought USD now is very vulnerable to sell off from important resistance at 0.8 on USD index.

The only hope of PPT (plunge Protection Team) is that this manipulated "wash out" has taken out a lot of speculators and investors from Gold, Silver, commodities and Junior mining markets and when US dollar responds to natural force of gravity and continues its Bear trend its move down will be manageable.