Reading time: 6 – 9 minutes
Operating a website requires monitoring to make sure there are no problems but doing so can uncover very interesting nuggets of information. For example, on 24 February 2010 at 11:15 EST in the evening someone at Goldman Sachs Company in the main NYC office found RunToGold through Google by searching for the phrase ‘buying silver‘.
Gee, I wonder who that someone was and what they are thinking. Originally, I was thinking of posting their home address, picture, resume, social security number and other websites they visited but they are not safe for work and considering the hostile feelings towards the company I decided against the personal information. But Eric Schmidt, CEO of Google, would probably not mind considering his statement to Maria Bartiromo:
I think judgment matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. If you really need that kind of privacy, the reality is that search engines — including Google — do retain this information for some time and it’s important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities.
BUYING SILVER INTENT
The brilliance of the Google Superbowl ad was in its ability to communicate an entire story with only a few lines of text just like the real Abraham Lincoln facts can destroy the faux character.
Truly, one’s search patterns can reveal intentions. Now, what can be discerned by these virtual footprints from one of Goldman Sachs’ 36,000+ employees? Conclusively, probably not much and we (NSA) would need access to more transactional databases and the passage of S. 733 the Cybersecurity Act of 2009 but we can still speculate about talk around the water cooler or higher order drama. Who knows if that someone was the secretary, their boss or both. It was 11:15PM after all!
SILVER BACKWARDATION CLOSE
Lately I have not followed the SIFO rates closely so this was my initial suspicion and once again it appears that silver is nearing backwardation. While the paper silver market which has an unlimited supply of silver and the physical silver market is constrained by actual metal the fractures between the two are beginning to emerge again.
In 2009 I chronicled the silver backwardation that led to a 60% rise in silver prices over a seven month period. Additionally, the gold to silver ratio has moved over 10% in less than two months. With silver recently slipping below its 200dma it is becoming a good value. But with silver getting cheaper this move in the ratio portends a slowing of the precious metals bull. And so there are conflicting signals.
CFTC SILVER MARKET INVESTIGATION
The slide towards backwardation is particularly enthralling given the CFTC’s three investigations of the silver market in five years. Ironically, silver analyst Ted Butler who has been particularly vehement of the CFTC’s faux investigations seems to like the new Chairman Gensler and on 10 February 2010 wrote,
I have been unabashed in my praise for Chairman Gensler since the time he assumed office. I have called him the greatest chairman in CFTC history. … I understand that disagreement [with the praise]. Yes, he was a partner of Goldman Sachs, the dreaded “vampire squid” of the financial world. Yes, he was a participant in the deregulation of 2000, which added greatly to the financial crises of the past couple of years. Yes, he is an “insider,” with connections and access to those in power.
What could Goldman Sachs know about the silver market, what might be being discussed around the water cooler and how might Chairman Gensler’s influence with his old cronies play into this?
CONCLUSION
The digital world offers tremendous opportunity to covertly monitor and draw inferences. In this case, someone at Goldman Sachs was researching about buying silver and they could have easily cloaked their behavior with anonymous web surfing. Imagine the latent power Google and the NSA have and would using it constitute ‘insider trading‘?
Yet, a former Goldman Sachs employee is the CFTC chairman who is embarking on the third investigation of the market in five years while the metal drifts towards backwardation. The paper price of gold and silver may be drifting lower but the physical silver is getting cheaper and a better value.
If you do not have a core position, to protect against the Laboon of sovereign debt defaults, negative FDIC funds, quantitative easing, etc. then yesterday was when you should have acquired. If you already have a core position then it may good to wait a little while longer for even better silver prices such as 0.95x the 200dma.
Order the new Bank Privacy Report before the end of February and get 50% off.
DISCLOSURES: Long physical gold and silver with no interest in sovereign debt from Greece, Portugal, Italy, Ireland, Spain, etc., GS, or the problematic SLV, Streettracks Gold ETF Trust Shares or the platinum ETFs.
NOTE: More Goldman Sachs vampire squids are snooping around.
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{ 14 comments… read them below or add one }
I would not think anyone from GS would have to “search” google to learn about buying silver or anything else .
Coolsaint, you would actually be surprised how ignorant a lot of financial professionals are when it comes to the monetary role of gold and silver. Despite what we think, the gold and particularly silver niche is TINY. I have quite a few friends at GS, JPM, etc. Was just golfing with 3 members of the board of directors for a large publicly traded bank and they know the system is FUBAR and yet they were actually of the opinion we would go back to barter, like eggs for butter, and not use a digital gold currency like GoldMoney. But this ignorance is no surprise considering the education system; ‘we’re all Keynesians now’.
It look like JPMorgan has taken this one step further.
I just sold some silver on Ebay to a person with a JPMorgan.com email adress…
Maybe they are trying to buy physical to cover their shorts ;-)
Trace– nice job tracing out GS!! Lol… Just completed the March issue of The Morgan Report– the entire issue is devoted to the silver market going out the next ten years..
We look at Industrial
Solar, medical, water, rfid tags, nano-tech, textiles, consumer electronics, superconductivity, wood preservation, and on and on. But as you know Trace the real story is Investment demand– I have yet to see anyone get this part where it really impacts the reader.. Have done our best to hit our subscribers over the head with the facts– I am more bullish on silver than ever… Will check in after my Chicago trip.. funny seems the boys on the floor and the options pits are thinking real not paper silver– isn’t that interesting… DM
Thought you would like it! I agree about the investment demand and you are spot on like usual. I have started getting pretty bullish about platinum.
I have a friend I play golf with who was on the call a couple weeks ago with some hedge funds that handle the trades for a major railroad and he said platinum is going to explode. This was after I had already recommended it and it had gone up $500/ounce. I think there is a bunch of inelastic demand built into a lot of the legislation. Plus, there is only about 7 million ounces or $7-10B of platinum produced annually. Imagine how tight that market will get if investment demand moves in.
Hey Trace. What do you think of future confiscation in the us considering the future major drop in the dollar? Would you consider doing an article on this? Thanks
Hi Lane, I already did an article on gold confiscation.
Trace – Are there actual CTFC Appreciation Medallions for sale? I think they *could* be a big seller. Or if they are available for purchase, can you advise from where they might be acquired? – Dave
Jason Hommel had one at the Silver Summit the last time I spoke there. I was looking around on the Internet real quick but did not see any. I think it was a special run and they are all sold out. Maybe some will come up on Ebay? I think such satirical coins would be a good seller also.
What’s interesting is the Operating System. Windows 2003 is a server application. Most employees will not have access to a server. It’s probably some techie who has caught wind of something from one of his overlords.
I thought it was Windows XP running Internet Explorer 8.0?
Any operating system still needs a portal to the internet. IE 8.0 is one. I use Mozilla Firefox.
Windows 95, 2000, xp, vista, 7, all could use IE 8.0. Server 2003 is like XP in that it’s the operating system; IE 8.0 is the browser.
spotted this article. hows does IP address relate to “their home address, picture, resume, social security number”?
Hi techie, the IP address is the tip of the iceberg that reveals personal information and is a reason why I also mentioned possible protective measures such as anonymous web surfing.