Gold can protect you from cybercrime even if the FDIC cant
Gold expert and author Jim Rickards calls it one of the top reasons to invest in gold today: financial theft via computer hacking.
The nation of Bangladesh got a firsthand look at the costs of financial hacking back in February, when $81 million it was storing at the Federal Reserve Bank of New York was stolen. The criminals used sophisticated techniques to transfer the cash via the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, and experts see similarities to the hacking of Sony Pictures in 2014.
The attackers clearly exhibit a deep and sophisticated knowledge of specific operational controls within the targeted banks knowledge that may have been gained from malicious insiders or cyber attacks, or a combination of both, SWIFT said, warning of a wider and highly adaptive campaign targeting banks.
Critical security gaps remain: And the hits keep on coming. News has surfaced that in late 2015, a Vietnamese commercial bank also was targeted by hackers. Tien Phong Bank of Hanoi issued a statement denying that it incurred any financial losses but admitting that hackers attempted to transfer $1.1 million in funds.
That attack and the $81 million heist from the Bangladesh central bank account at the Federal Reserve Bank of New York in February are thought to be part of a broad assault on the global banking system by thieves whose operating methods and digital fingerprints are being studied carefully by analysts worldwide, The New York Times reported.
I remain concerned that there are critical security gaps in the international payment system, New York Congresswoman Carolyn Maloney said.
Digital wealth can disappear: These ongoing vulnerabilities now being exploited by hackers mean that investors need to consider storing at least part of their wealth in physical precious metals that are impervious to computer theft.
Rickards agrees, noting that financial hackers are busy all over the world, working individually as well as for sovereign entities. Russian President Vladimir Putin has a 6,000-member cyber brigade working night and day to destroy, disrupt and erase digital wealth, he recently told Bloomberg TV.
I run into billionaires and say, What do you have? And they say, I have stock and bonds, and I say, No, you dont. You have electrons, he noted. Its all digital wealth. This can all be wiped out by Putin and Syria and North Korea, Iran, other countries. The thing about gold, you cant hack it, you cant erase it, you cant delete it. Its tangible.
FDIC accused of lax security: Sure, you can depend on the Federal Deposit Insurance Corp. to back you up if your account is hacked and looted. It pledges to guarantee bank deposits of up to $250,000 for a single account holder.
Of course, the FDICs dirty little secret is that it is wildly underfunded. And ironically, according to a recent report, the agencys own financial data have been subject to breaches, with departing employees leaving with depositors personal data on removable hard drives.
Altogether, more than 160,000 people were affected, Congress discovered at a hearing covering the breaches. To date, FDIC has failed to notify any of those individuals that their private information may have been compromised, Georgia Congressman Barry Loudermilk lamented.
Regrettably, the American people have good reason to question whether their private banking information is secured by the FDIC, hesaid. The agency is failing to safeguard private banking information.
So the very agency charged with guaranteeing Americans deposits is itself allegedly failing on the information-security front. That shocking news, along with the growing list of financial-hacking victims, means its more important than ever to protect yourself with hard assets and precious metals.