Oil in Big Macs: Chart of the Day - ETFdesk

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Oil in Big Macs: Chart of the Day 0 comments

Mar 30, 2010 7:40 PM | about stocks: USO, RJA

Source: Gregor.us

The idea for this comparison of Oil to Big Macs, is that a Big Mac is representative of a basket of agricultural goods and thus compares the relative advantage of trading food for oil. Whats interesting about this is that theoretically, it should be a somewhat inflation-adjusted measure of oil prices. As of now it appears agricultural goods is undervalued relative to Oil. Interesting to see how the plays out in a pairs trade?

Short Oil (USO United States Oil Fund LP)

Long Agriculture (RJA ELEMENTS - Rogers International Commodity Index Agriculture Total Return)

Disclosure: No Positions
Themes: Oil, commodities, economy, agriculture Stocks: USO, RJA

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