Central Banks Using 119 Billion Google Searches To Spy On You

Central Banks are using Google data in order track economic trends before they become economic trends. But, while Bloomberg leads us to believe this has only just begun, the truth of the matter is quite different. The article puts across the feeling that Google Trends is a breakthrough in behavioral research, and that worldwide central banks are beginning to use the data in order gather information on the people who, in Bloomberg’s words, they “oversee.” But, Google is but one piece in a complex puzzle of Full Spectrum Dominance, using the diverse interplay of multiple social media interfaces and Pentagon digital-avatars of U.S. citizens predicting where individuals in the population will be and when.  And, they are confident that their formulas are accurate.

Says the article, the Federal Reserve and the central banks of England, Israel, Italy, Spain and Chile have recently embarked upon studies to determine the helpfulness of Google search volumes in the pursuit of tracing trends in the economies they “oversee,” in the language of Bloomberg News.  “The guardians” – their word, not mine  – are pursuing techniques to “deploy nimbler policy responses.” According to Bloomberg, Erik Brynjolfsson, a member of the Federal Reserve Bank of Boston’s Academic Advisory Council, believes that “greater foresight could make the difference between a slowdown and a recession, a recovery and an inflation-stoking boom.

“When central bankers were looking at traditional data, they were essentially looking out the rear-view mirror,” said Brynjolfsson, a professor at the Massachusetts Institute of Technology in Cambridge.In 2009, he co-authored a study on predicting U.S. home sales by utilizing search volumes. The study caught the attention of central bankers. “If the Fed had had access to this information, they would have been able to make better forecasts of what was happening to the housing market and known more quickly the depth of the problem” during the 2007-2009 recession, he said.

Google, in an open demonstration of the internet companies aid to “the guardians,” played an instrumental role in the developing of the Better Forecasts technique. As Google Inc. (GOOG)’s chief economist, Hal Varian, was creating a new website to report how often users searched for certain keywords, he became intrigued at the prospect of how this data could predict the future, and therefore eclipse traditional economic reports. He experimented.  “The ‘aha moment’ was, gee, this actually works,” Varian said in an interview after experimenting. He then co-wrote a 23-page paper in April 2009, outlining how data reported on the Google Trends service improved forecasts of auto and home sales as well as retail spending in the U.S.

As the senior economist at the central Bank of Israel, Tanya Suhoy released a paper three months later finding that the new data helped to predict slowdowns and greenshoots in Israel. The Central Bank of Chile, the Bank of England and others looked into the episteme. They wondered, Did more people browsing for cars predict an increase in auto sales? Was a jump in research on unemployment benefits a hint that people were losing jobs? Bloomberg maintains that one of the best results of this new research angle is that it fixes the issue central banks have had in setting interest rates based on delayed economic information, but this is not the case.

For the peripheral central banks, the explanation is easy – they do not have access to the most sophisticated and mature predictive software on the planet. Google Trends for them is a groundbreaking technology that will make their lives easier. But, Google makes millions of lives easier, so that is not the news. The military-industrial complex and private finance capital have, through their think tanks, developed the most advanced technology on the planet, with the capstone financial system, including the Federal Reserve, the International Monetary Fund, the World Bank and the Bank For International Settlements, as well as various think tanks of the same esteem, such as the Royal Institute for International Affairs and few others – not, necessarily, uni-state central banks.

Google keeps a monopoly on its data for one to three days after users perform searches. The U.S. Commerce Department generally publishes its monthly report on retails sales two weeks into the following month. “With monetary policy, you can turn the spigot left and right in a few seconds,” said Varian, who taught Bernanke.“If you’re going to be more responsive, you need to have up-to-date information.”

The banks use query volumes in place of government statistics not yet available. The staff computes a monthly index that reflects the current health of the economy. The figures are presented to policy committees before the nation’s benchmark interest rate is set. The method might be implemented for a world of the future, as much of this world is not, as yet, on the Internet. This variable increases greatly the likelihood of error in the technique. Nonetheless, as time moves forward, more and more of the population will, like the youth of today, turn to the internet first for not only what to buy, but advice and information – all of which are not only useful to central banks, but also to the governments to which they make loans and for which they make policy. But, even now, the Pentagon and its partners in international finance have access to real-time info about the population based on work history, credit card statements, internet activity and telecommunications.

The government and the banks have been wiretapping our asses since the end of the 20th century. The desire for all-encompassing information is much older than that. In the 1970s, AT&T became entangled in the legal issues that came along of their wiretapping, at the behest of the FBI, of American citizens, namely political activists and dissidents. Now, with the black Act of Patriotism, the Patriot Act, it is a law on the books and signed into law that these invasions into our personal history – an offensive evasion of privacy – are a must, and that state-enterprise can be trusted with the information.

The research dissecting Google’s search counts, which totaled 119 billion planet-wide in June, is still nascent, according to Bloomberg. The figures begin in 2004, narrowing the purview of the the examination. And by limiting its sample to Internet users, the search volumes may not reflect actual purchases. How many people scan the internet for hours looking at stuff and things they wish they could afford to buy or actually buying them on credit, despite nil cashflow?  The flow of high interest credit quickens the sucking up of the real economy, transferring it to negatives on balance sheets.

“Potentially, using Google could be interesting, but at the moment its forecasts of macroeconomic variables aren’t reliable,” said Lucrezia Reichlin, a former head of research at the European Central Bank and who now professes at the London Business School. “Google is sexy and something may come of it, but more research is needed.”

The nascence apparently not too much of a concern, even the Bank of England tracks Google’s searches. Search terms like “JSA”, abbreviation of U.K’s jobseekers allowance, helps to predict the nation’s unemployment data, according to BOE researchers. Searches “are likely to become an increasingly useful source of information about economic behavior,” they wrote. Chris Shadforth, a spokesman, did not wish to give any further details.

At the Bank of Spain, Concha Artola and Enrique Galan analyzed travel-related queries in the U.K. in a paper released in March.They concluded that the searches predicted numbers of British tourists into Spain up to one month in advance.  The New York Fed analyzed the frequency of the phrase “mortgage refinance” alongside an index that tracks the number of refinancing applications filed by current homeowners.  The Rome-based Italy Central Bank concluded that  Internet search traffic created jobless-rate estimates more accurate than those which relied on the traditional paradigm.  In Chile, only fifty percent of the population goes online, but searches nonetheless predicted auto sales, according to the Central Bank there.

Bloomberg says that the central banks of Spain, Italy and Chile have yet to factor in Google data to assess their economies. Spain is currently looking into the future uses of the technique, while Chile has said that the results of research on the tool are promising. New York Fed spokeswoman declined to comment.

This information is generally public, and so offers a  means by which entrepreneurs can keep their fingers on the global pulse. Investors are looking towards Trends for edges in the markets, although they will surely be beat-out by High Frequency Trading Systems. The chief portfolio strategist at Wells Fargo Advantage Funds, Brian Jacobsen, uses search counts to examine what consumers intend to do buy even before they actually their purchases.

Jacobsen is a creepy dude, taking an intimate look at the data of his customers.  To have the information, the power, awakens a desire deep within for control. His lack of confidence and spirit is a void he choose to fill with voyeurism. “The biggest benefit of this data is that you get an imperfect look at the mind of individuals,” said Jacobsen. “Oftentimes, we can look at incomes, interest rates and past behavior and try to determine what individuals are going to do. This gives us a peek at what people are interested in at that very moment.”

The San Francisco Federal Reserved used Google’s data to decide how effective policy and propaganda had been. The bank looked at search volumes of words such as “freeze” and “crisis.” He perused changes in perceptions of various countries’ default risk during the 2008 credit crunch, when the Fed established swap lines with other central banks to confiscate an ongoing credit of trillions from the global taxpayers. His bank, as part of the Federal System, helped steal, as part of the first wave of “loans,” $16 trillion to “ease global liquidity shortages.”

The changes in perceptions of various countries’ default risk during the 2008 credit crunch was not the tracking of the natural evolution of a systemic economic crisis, but was instead a tracking of the acknowledgement of central-memes sent through the media wires so as to keep the minds of the public transfixed on the official retelling of history and current events.  The crises of nation-states is the war in 1984, gradually moving from continent to continent by official decree.

“This is all in its infancy, but it’s fascinating,” San Francisco Fed President John Williams said in March. He sees the Google numbers as a “data revolution. It’s “an enormous amount of information” that will better help “us understand in very real-time what’s going on.”

The enormous amount of information has been available to the powers-that-be all along. What the Bloomberg article does is not deliver pertinent information, but, instead, float the idea – the central-meme- that the Internets’ true purpose is for information – your information. As the Internet evolves, it will have to be tempered and controlled. An internet kill-switch is an unlikely solution considering the amount of capital stored within the Internet. The information will be made available, but the Internet will have to undergo a forced evolution towards centralization so that it can be managed and policed just like the real, enslaved world.