We've been playing the same trade that the noted Mr. Soros has picked up on.
25 June 2008 ...added quite a bit to our short oil/long gold cross trade.
June 23 - Gold / Oil Ratio Is at an Extreme
We are using DTO, DUG, GLD and CEF in the crosses, varying proportions and size. We refuse to provide any business to the US futures markets on a matter of principle. Their inclination to change the rules to suit their larger members inconvenienced us once too often.
The Croesus Chronicles
Gold And Oil For Soros; Illiquidity At Merrill
07.17.08, 8:53 AM ET
Robert Lenzner
...Undoubtedly, this spike in bank shares was due in large part to hedge funds, which began covering some of the massive short positions they've built up over the past 18 months. For example, billionaire George Soros--Croesus was told--has covered much of his shorts in financial stocks. Why chance another public policy move by regulators to shut off this automatic feeding trough?
Soros finally shorted oil at $137 a barrel and put on a long position in gold; he expects to see gold hold its ground even if oil continues to decline. In fact, the gold bug clique believes in a consistent 10-to-1 ratio for gold and oil. It holds that either gold will rise to 10 times a barrel of oil ($1,350 an ounce) or oil will fall to $96 a barrel--one-tenth the present market price of gold. Croesus was told Tuesday that statistics spanning many decades support, on average, this 10-to-1 ratio....
