May

13

A very easy trading system is proposed by the author of this article Louis Woodhill:

Because oil always returns to its average value of 0.0735 ounces of gold per barrel, there is an opportunity for arbitrage. The federal government has 726.6 million barrels of oil (worth about $74 billion today) and about 261 million ounces of gold (worth about $373 billion today). When oil/gold price ratio is significantly (say, 10%) above its long-term average of 0.0735, the government should sell oil and use the proceeds to buy gold. When the oil/gold price ratio is significantly (again, say, 10%) below 0.0735, it should do the reverse. Right now, with the oil/gold price ratio at 0.0715, it should be doing neither.

Who knows if he has tested it?


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