Martin Kronicle

Lots written about PIIGS countries these days and what will happen if one of them collapses.

Here is how they rank by GDP in the global economy according to Wikipedia:

Italy – 7
Spain – 9
Greece – 28
Ireland – 37
Portugal – 38

Italy has a giant cash economy, so it actually might rank higher in the world, but with their strict code of omertà, we’ll never know.

As state economies go, California’s economy ranks 1st in the United States by Gross State Product with $1.846 billion.

By that measurement, California would rank 8th in the world in terms of economic size. California’s collapse would be worse than that of Spain alone. California’s collapse would be worse than Greece, Ireland, and Portugal combined.

Why do we care about Greece other than for compassionate purposes?

About a month ago, I wrote a post called The Gold Platinum Spread: A Leading Indicator on Inflation.

Prop traders can trade spreads like anything else, including outright directional trades or options. Spreads are living and breathing organisms so to speak, and they develop trend lines, resistance, and support.

Here is what the April Gold / Platinum Spread looks like today:

Gold / Platinum Spread: A leading indicator on Inflation

By the chart, the spread rallied above the breakout level of about $325 premium to the platinum side and stalled at its high of about $500. The $400 level looks like support, so if you’re trading this spread, you might see weakness below $400.

The seasonal chart provided by Moore Research suggests that the seasonal tendency will be for the spread to continue to widen though. I would suggest that aspiring spread trend followers follow the price above all else.