Gold chart is screaming that US Dollar is Toast with all those Treasuries bought. GDX, SSRI, SLW, TNR.v, CZX.v, OK.v, SST.v, BVG.v

Gold can not keep it quiet any more. On Friday it screamed loud and clear that Deflation, US Dollar and Treasury Bubble are jokes all along with implied Zero rate returns on maturities up to One Year. With all automakers on the wedge of collapse GM F, with second biggest bank CitiCorp C at near life support machine who is buying all this crap? Answer could be even more close to you then you think. One of the monetary tools of the Fed at near Zero rate policy is Debt Monetisation when FED is buying Treasuries all across the maturity and bringing more lemmings into the game of momentum play.

It was always a mystery for me how could you finance all those bailouts without US Dollar total collapse? Before China will produce Goods, get dollars for it and happily buys Treasuries to finance US Corp. With import plummeting (including with payments for Oil to Middle East and others) foreign buyers do not have any more dollars and hunger to buy more and more debt. Even worse for Mr Paulson and Co - China started to talk about buying Gold and investing in its own country Infrastracture, Russia is struggling with falling oil, selling USA Agencies Debt and is buying Russian Equites. Saudis are still trying to figure out why they pushed the oil down with only to have the wrong guy in the office and are buying gold as well.

Saudi Arabia buys $3.5bn of gold in two weeks I guess they know thing or two about how much Oil is really left in their ground.

All those deleveraging is a valid idea up to the point and that point is: if your bank is stable you do not have to buy Treasuries at Zero rate. I will not be surprised that all that Quantitative Easing is already happening and FED is printing money and buying Treasuries all across maturity. It is a very fine balance game: if you can increase sales of treasuries to other buyers you can try to fill liquidity gap at low rates before market will figure it out and demand higher yield for debasing currency. Two weeks ago one of the auctions of 30 years Treasuries failed because of low yield. Last week we had those fireworks with all yield collapsing. Gold has kissed MA50. If Gold market is telling us that these ideas are valid it will play levels 800, 820, 840 and 860 before breaking out of MA200 which will be bullish confirmation on weekly chart.