Meet My Investment Advisor: Google

The WealthCycles Staff

We at WealthCycles.com have used search trends as a proxy for unemployment numbers and deflation numbers before. Back in July, we used Google’s Unemployment Index to better understand the employment picture—which had been fiddled with to reduce unemployment by magically contracting the labor force by 600,000 workers. After July, the U.S. unemployment rose until November 2010—indicating that Google's index has some predictive power.

Google Search Insight is a tool that helps us understand what people are searching for, or where the herd is heading.     

CNBC had an interesting video segment this morning on Google as an economic indicator featuring chief strategist Nicholas Colas of Covergex (video below). Colas says that using Google search trends can help you understand market sentiment, and he’s right. Understanding what people are searching for can give you a clear picture when markets or statistics (like unemployment) are potentially manipulated.

He says that “stock price” has received higher searches than this time last year, indicating the “wealth effect” that affects people when stock or home prices rise. But is this the whole picture?

Globally, “gold price” searches have risen much faster than “stock price,” and since 2007, “gold price” searches have been higher than “stock price” searches. From the beginning of 2007, gold has risen from $608.40 to $1383.50, a 127% rise, while the Wilshire 5000, which attempts to measure every publicly traded stock in the United States, has increased from 14,200 to 14,257, a 1.8% rise. It’s pretty clear what the herd is saying.

Below is a chart that shows Google search trends. We think these are important indicators, too—you just need to look at the big picture.

 

I thank you humbly for sharing your wdoism JJWY

If we buy now, aren't we following the herd? and if we are, doesn't that mean we are too late? Do we need to wait for the pendulum to swing the other direction?

If the herd is heading towards precious metals, isn't that a sign NOT to buy right now? Once the herd is doing something, haven't we missed the boat? Don't we need to wait for the pendulum to swing back?

I found that comment misleading as well, but take it to mean that the herd is waking up and starting to lumber in that direction - it doesn't mean they're buying yet. That is characteristic of Phase II, and why we've seen a gradual and steady rise in silver prices.

Things haven't really hit the fan yet, but people are starting to wake up to the fact that all is not right. Gold and silver are being mentioned more and more in the mainstream media and personal conversations, but what I'm finding is that most still aren't doing anything about it, and that's the key. Nearly everyone I know thinks I'm crazy to buy metal, which tells me I'm making the right investment. By the time they finally realize what's happening, panic, and make the jump (Phase III), that's when silver will be shooting sky-high - and that's when I'll be selling.

Percisely our point. Just because people are searching for the investment doesn't mean they are buying yet. But it does show the signs to come.

nicholas - wealthcycles administrator

If we did go back to gold standard, we will have very little inflation. Government will be more careful on the spending, we will have a sound foundation in the economy. We will have a true prosperity over the long term.

Personally i think it is entirely possible we have to go back to the gold standard. But Gold Standard Sucks. Imagine if we are on Gold Standard, this opportunity wouldnt have exist in the first place.

Try this. Go to google and type in "historical" and the #3 suggestion is "historical gold prices". #8 is oil, and #9 is silver.

First of all, would it even be possible to go back on the gold standard?

And secondly, what would our world look like if we did?

If we went back to a gold standard, then he who has the "most" gold makes the rules and those that don't.....well that's just too bad. A gold standard did not work in the past, there's no reason to think it will work now. A gold standard would work in the interest of the few and not the many because many are without gold, or silver for that manner.

There is nothing wrong with fiat currency as long as it is issued from a government, via a government entity like our U.S. Treasury, interest free. If a nations currency is issued "to itself" interest free, that nation would not be burdened down with debt because there would be nothing to repay outside of principal. A nation cannot "balance a budget" if it has to continuously borrowing currency, "at interest" to pay off the previous debt. This is the source of most of our worlds problems. A "DEBT BASED MONETARY SYSTEM".

The scriptures say the "borrower is servant to the lender". Since 1913, signing of the Federal Reserve Act by Woodrow Wilson, the U.S. has become servant to the Federal Reserve all in the name of a "debt based currency system".

Conclusion: Change the Currency, Change the WORLD!

The implementation of interest free currency for Sovereign Nations is not a radical idea,except to those who do not want this practice to resurface...it's been done successfully well within U.S. History, Roman history, etc, etc.

An issuance of interest free currency by government for the people is the answer.

TLJ

Hello TLJ,

Tell me if I am missing something, but could your argument that "he who has the "most" gold makes the rules" be equally applied to fiat currency. Those who have the fiat currency make the rules? Or better yet, those who have the ability to create fiat currency at their whim control the rules?

nicholas - WealthCycles Administrator

Hello Nicholas,

A "debt-based" fiat currency has no choice but to expand exponentially due to the interest that needs to be paid. Eventually this will create massive inflation, enormous amounts of hot money, etc, etc.

A fiat currency issued by a governments treasury that is "interest free", strictly for government, by government, and its citizens, financially enslaves no one.

A governments "interest-free" currency could, should and would naturally expand and contract with the economy. A "debt-based" currency, like the FRN, inherently expands regardless of the country's economic situation. In fact, if a nation's economic situation is booming, there will be an even larger debt to "supposedly repay" as opposed to busted economy. I say supposedly repay because our government issues bonds to raise capital to acquire FRN's. And to pay back those bonds with interest, our government has to issue more bonds, going further into debt, in order to pay off the previous debt. This current fiat system creates "debt-slaves" of governments that used to be sovereign.

So to answer your question...it seems that if a government "does not issue bonds" to raise capital but simply issues "interest free" currency for its nation, that currency is issued to the benefit of government itself and its people because there would not be a perpetual and exponential debt to supposedly be repaid. The fiat currency would remain completely worthless "as it should be" except for its value as an accepted medium of exchange for public and private transactions.

In essence, yes....there will be rules to follow in any financial system. But the point is that governments and its people will no longer be the perpetual debt slaves of the few. No longer servant to the lender, Sovereignty and prosperity is regained for government and its people.

Hope this answers your question Nicholas.

Until next time,

TLJ

Hello TLJ,

Thank you for your reply. Still chewing (metaphorically speaking) on the remarks you made. I hope to see your insightfull comments more often on WealthCycles.

nicholas - WealthCycles Administrator

Anytime Nicholas.

The issues raised and discussed on Wealth Cycles provoke thought.

All I can say is this...I'm very optimistic about the future of our world. Our monetary system has been wrong for so long that its flipside must be coming to balance it all out.

Things will be put right somehow and when they are, it will be for a very long time.

Until next time,

TLJ

Yes.

Unfortunatly none of this matters.

There is going to be a total collapse. (300tr daritives position; down the drain. All in power have been bankrupt since 2008!) more importantly; money, silver/gold is only a token. No matter what. Energy is now* the full prime co-ordinator for humanity. There is nothing that will replace the edifice of fossil fuels. Nothing (*MCR) we have no time now to stop, (which won't happen) and think about alternatives, (create infostructure for them) We have run out of time (it takes fossil files to research, develop and implement new energy change, and there are NO new sources to match the intimate growth paradigm). This is all now a mad scramble for survival. The bell curve of population growth is ending. Gold and silver will be the last bubble for all it's worth*. but it's going to be horrible within the next decade. Mankind has ways had a joke with the idea of total destruction of itself via some kind of nuclear work war 3 over resources. However, incompetence rules. & just this simple running out of energy will do it. All the best on this one. The next wealth cycle will probably be pointless. X

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