Who is Buying Treasuries?

It looks to me like that the only ones buying U.S. Treasuries is the U.S. Treasury themselves.

Are they not just paying for Treasuries with the good old fashioned printing press? It seems that the only ones who think inflation, growing deficits, debt ceilings, and an out of control monetary policy is not a problem is Ben Bernanke and Tim Geithner themselves.

Listen- Bond Yields have moved up drastically this year for many reasons, not withstanding money moving to equities and the unwinding of the "Safe" trade. But what we have not seen so far this year is serious selling from foreigners who own our debt. How long can we go before the likes of China start to dump US Sovereign Debt?

The Treasury has done everything possible to keep rates low so they can achieve mortgage refinancing, mortgage cram-downs, lower borrowing costs, etc. They have achieved to some what stabilize the secondary mortgage market and lower short term borrowing costs, but there is a serious divergence between long rates which have sky-rocketed this year.

All of this time, we have heard the following during the credit crisis:

"At least interest rates are low"

Not any longer as rates have clearly broken out to the upside. Many bond market participants have seen what is quite evident, that what ever the Treasury and Government has done to fix the credit crisis will not work in the Intermediate/Long term. Short term equity prices are event driven, bond prices are economically driven. What the bond market is telling you is that Inflation is going to be a problem, which will kill any pick up in the economy short term. If the economy can manage to claw back towards the end of 2009, the recovery will be at best a jobless recovery with much higher energy prices and inflation.

Bond rates have dropped over the last few days as again the US Treasury is back trying to support the market, but how much can they actually buy? Where is this money coming from? And who in their right mind can figure out what they are up to?

Again- I was early on my prediction of lower equity prices, but if the only ones who think our debt is considered desirable are the ones who issue them, I will stick to my thesis of much much lower equity prices and drastically higher bond yields.