$IRX Daily

The following chart is where the rubber hits the road. Operation Twist was meant to divert monies from flowing into short dated treasuries to accumulate in longer dated paper. This has been largely successful, given that demand for short dated paper has tapered off somewhat.

It has also created huge demand for corporate paper with higher yields. On the receiving end are the hapless GBN.V shares.

But demand for short dated paper has driven short term rates into negative territory in several key countries in Europe. Very likely the same will occur in the U.S.

You can see how the U.S. dollar has benefitted from operation twist, and how gold has remained in neutral territory since the price decline was in place.

Once short term rates decline again, the dollar will decline and along with it, the gold price rise.

supersize: http://www.flickr.com/photos/11747277@N07/7704575962/sizes/l/in/photostream/

http://scharts.co/OvEFH8

-F6