Guest Post by Peter Reagan
A few weeks ago, I received a rather disconcerting message. It was a verification notification for a personal social media account – except that I hadn’t tried to access that account that day.
Why did I get that message? Who was trying to access the account?
I don’t actually know, and I’ll likely never know.
In the case of this social media account, I went in and changed my password. As far as I know, that was the end of the issue.
But what if it had been my bank account?
Or my retirement account?
Those are the concerns that keep me up at night…
Now, I’ll be the first to tell you there are enormous advantages to having a digital financial system.
Because banks, stores and just about everyone else can send or receive payments electronically, I don’t have to drive across town to pay a bill in cash. I don’t have to plan days ahead to mail a check. (And I would need to order checks again to do that now…)
Frankly, I like the convenience of digital payments. I hope I never have to experience the inconvenience of a major outage that leaves me unable to make a payment electronically.
But even with all that convenience and speed, our digital financial lives aren’t “almost perfect in every way.”
Convenience creates dependencies.
We depend on computer systems to work. On a stable WiFi connection. On passwords and identity-verification systems (and, yes, on remembering those passwords, although life has been much easier since I downloaded BitWarden). On the IT and cybersecurity staff at institutions to secure our sensitive information and maintain accurate records.
And sometimes even very sophisticated institutions have trouble doing that.
One recent example came from, of all places, the Federal Reserve.
In September, the Fed’s own Office of the Inspector General issued a management alert after finding gaps in the Board’s ability to prevent a departing employee from taking with him sensitive information.
The alert says the former employee may have taken Federal Open Market Committee-classified information and other sensitive material with him. The inspector general issued nine recommendations to strengthen the Board’s controls for preventing, detecting and resolving information-security incidents.
It’s not quite right to say someone “stole” sensitive Federal Reserve data. That’s not the take-away here. It’s something just as important: Even an institution with the Federal Reserve’s resources can struggle to protect sensitive data.
The Federal Reserve does not treat sensitive information casually. FOMC deliberations are classified under the Fed’s own security system. Access to the most sensitive material is restricted on a need-to-know basis. FOMC meetings themselves are closed; minutes remain confidential for three weeks and full transcripts for five years. Even the supervisory ratings the Fed assigns to individual banks are kept secret (and this drives me nuts). The Fed maintains Sensitive Compartmented Information Facility (SCIF) locations, just like the NSA and the CIA and the Pentagon.
Arguably, there’s a reason for all this secrecy. A premature glimpse at a monetary-policy decision, an internal forecast or serious problems at a particular bank could move enormous sums of money in moments. Or even light the fuse on a crisis.
And yet all those rules, policies and security hardware ran into the oldest security vulnerability in the book: A human being with a USB drive.
And this one incident would be enough to get my attention, but…
Unfortunately, it’s not just the Fed. A much larger breach recently affected a Defense Manpower Data Center information system.
According to a Pentagon official, unauthorized users exposed personal information belonging to nearly 2.8 million living people, as well as records belonging to another 294,000 deceased. The hackers got names, dates of birth, Social Security numbers, contact information and job details, although the specific information exposed varied by person.
Officials said they had not found evidence that the information had been misused at the time the breach was reported. You could say that’s good news. Or you could say not finding evidence of misuse just means investigators haven’t looked hard enough…
Either way, there’s a reason federal authorities take exposure of Social Security numbers seriously. The Federal Trade Commission recommends that people whose Social Security numbers have been exposed in a data breach check their credit reports for unfamiliar accounts and consider safeguards such as a credit freeze or fraud alert.
And this gets to the distinction I think is important.
A data breach does not automatically mean somebody’s savings disappear. A stolen Social Security number is not the same thing as money being stolen from a retirement account. An exposed password isn’t the same thing as losing ownership of an asset.
But all of them remind us how dependent modern financial life has become on the security of systems maintained by somebody else.
See, I’ve come to believe that convenience and resilience are opposites.
Something can be extraordinarily convenient when everything works as intended while still depending on a long chain of institutions, networks, databases and identity-verification systems to keep functioning.
That doesn’t mean we should abandon the digital financial system. I certainly don’t intend to.
But it does raise an interesting question for those of us who have spent decades accumulating savings for the future: Should everything we own depend on the same type of infrastructure?
When is convenience a true benefit, and when is it just a vulnerability?
That’s one reason some people think about more than one kind of diversification.
Most of us understand the basic idea behind diversification: Don’t rely entirely on one type of asset. Just like Grandma Reagan said, “Don’t put all your eggs in one basket.”
But there’s another question that I think gets less attention: How are those assets actually owned, accessed and held?
Today, most of our financial life is managed through computer screens. We check balances online, transfer money electronically and access accounts with passwords and verification codes. We can move tens of thousands of dollars in a moment without touching anything but a keyboard.
There’s nothing inherently wrong with that.
But there are also physical assets, and those come with an entirely different set of advantages and disadvantages.
Real estate is an obvious example. As the old saying goes, “They’re not making any more land.”
Real estate is tangible. Nobody can remotely hack into a computer system and electronically carry your acreage away. On the flip side, land is about as non-portable as an asset can get. It stays where it is. It requires taxes, insurance, repairs and ongoing maintenance, and most of you know it’s not exactly liquid. Buying and selling real estate can take months.
Physical precious metals are different. Physical gold, for example, is tangible while also being remarkably compact relative to its value. As I like to say, you can fit a king’s ransom in a backpack.
That doesn’t mean physical gold is somehow immune to risk. But it presents a fundamentally different kind of ownership from all the traditional financial assets accessed primarily through electronic accounts and online platforms.
The physical metal itself cannot be copied or extracted as data in a breach. You can’t hack a gold bar.
That distinction doesn’t make one form of ownership universally better than the others, but it does make them different.
And difference, after all, is the whole point of diversification.
People who own physical precious metals personally can make their own decisions about how and where to store them. Precious Metals IRA assets get stored in a precious metals depository which, take my word for it, are 1,000 times more secure than your floor safe or the coffee can buried in your back yard.
Whether stored at home or in a secure vault, the underlying assets themselves are still tangible and physical.
And I think that’s the larger lesson here.
Our increasingly digital world has given us extraordinary convenience. I have no interest in giving that up. I don’t want to go back to the time when I stood in line at the corner store to pay my electric bill with a money order.
But convenience doesn’t have to extend to every form of savings.
Diversification can mean owning different types of assets. It can also mean thinking about the different ways those assets exist, how they’re secured and protected from digital threats.
For some retirement savers, that’s part of the appeal of physical gold and other qualifying precious metals: Not because physical assets are risk-free, and not because the digital financial system is inherently unsafe, but because physical precious metals offer a form of tangible ownership with a different set of risks and characteristics.
In an increasingly digital world, sometimes there’s value simply in owning something you can’t download.
If that idea resonates with you, it may be worth learning more about what physical precious metals can offer as part of a diversified approach to retirement savings.
The dollar buys less today than it did a year ago, a decade ago, a generation ago. That slide is the predictable result of endless printing and borrowing. Dr. Ron Paul believes the FED has the answer. But they’re keeping it to themselves. Fortunately, a new financial chart has publicly exposed their secret moves. See it for yourself: https://freekit.birchgold.com/lf/ro...D_v02a_article&placement=article&cid=rp_media
To learn more about how physical gold could help protect your retirement portfolio, click here to get your FREE info kit on Gold IRAs from Birch Gold Group. And now introducing a Crypto IRA to capitalize on the fastest growing market in the world.
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[ H/T The Burning Platform ]
A few weeks ago, I received a rather disconcerting message. It was a verification notification for a personal social media account – except that I hadn’t tried to access that account that day.
Why did I get that message? Who was trying to access the account?
I don’t actually know, and I’ll likely never know.
In the case of this social media account, I went in and changed my password. As far as I know, that was the end of the issue.
But what if it had been my bank account?
Or my retirement account?
Those are the concerns that keep me up at night…
The advantages and disadvantages of a digital financial life
Now, I’ll be the first to tell you there are enormous advantages to having a digital financial system.
Because banks, stores and just about everyone else can send or receive payments electronically, I don’t have to drive across town to pay a bill in cash. I don’t have to plan days ahead to mail a check. (And I would need to order checks again to do that now…)
Frankly, I like the convenience of digital payments. I hope I never have to experience the inconvenience of a major outage that leaves me unable to make a payment electronically.
But even with all that convenience and speed, our digital financial lives aren’t “almost perfect in every way.”
Convenience creates dependencies.
We depend on computer systems to work. On a stable WiFi connection. On passwords and identity-verification systems (and, yes, on remembering those passwords, although life has been much easier since I downloaded BitWarden). On the IT and cybersecurity staff at institutions to secure our sensitive information and maintain accurate records.
And sometimes even very sophisticated institutions have trouble doing that.
One recent example came from, of all places, the Federal Reserve.
In September, the Fed’s own Office of the Inspector General issued a management alert after finding gaps in the Board’s ability to prevent a departing employee from taking with him sensitive information.
The alert says the former employee may have taken Federal Open Market Committee-classified information and other sensitive material with him. The inspector general issued nine recommendations to strengthen the Board’s controls for preventing, detecting and resolving information-security incidents.
It’s not quite right to say someone “stole” sensitive Federal Reserve data. That’s not the take-away here. It’s something just as important: Even an institution with the Federal Reserve’s resources can struggle to protect sensitive data.
The Federal Reserve does not treat sensitive information casually. FOMC deliberations are classified under the Fed’s own security system. Access to the most sensitive material is restricted on a need-to-know basis. FOMC meetings themselves are closed; minutes remain confidential for three weeks and full transcripts for five years. Even the supervisory ratings the Fed assigns to individual banks are kept secret (and this drives me nuts). The Fed maintains Sensitive Compartmented Information Facility (SCIF) locations, just like the NSA and the CIA and the Pentagon.
Arguably, there’s a reason for all this secrecy. A premature glimpse at a monetary-policy decision, an internal forecast or serious problems at a particular bank could move enormous sums of money in moments. Or even light the fuse on a crisis.
And yet all those rules, policies and security hardware ran into the oldest security vulnerability in the book: A human being with a USB drive.
And this one incident would be enough to get my attention, but…
It’s not just the Fed struggling with information security
Unfortunately, it’s not just the Fed. A much larger breach recently affected a Defense Manpower Data Center information system.
According to a Pentagon official, unauthorized users exposed personal information belonging to nearly 2.8 million living people, as well as records belonging to another 294,000 deceased. The hackers got names, dates of birth, Social Security numbers, contact information and job details, although the specific information exposed varied by person.
Officials said they had not found evidence that the information had been misused at the time the breach was reported. You could say that’s good news. Or you could say not finding evidence of misuse just means investigators haven’t looked hard enough…
Either way, there’s a reason federal authorities take exposure of Social Security numbers seriously. The Federal Trade Commission recommends that people whose Social Security numbers have been exposed in a data breach check their credit reports for unfamiliar accounts and consider safeguards such as a credit freeze or fraud alert.
And this gets to the distinction I think is important.
A data breach does not automatically mean somebody’s savings disappear. A stolen Social Security number is not the same thing as money being stolen from a retirement account. An exposed password isn’t the same thing as losing ownership of an asset.
But all of them remind us how dependent modern financial life has become on the security of systems maintained by somebody else.
See, I’ve come to believe that convenience and resilience are opposites.
Something can be extraordinarily convenient when everything works as intended while still depending on a long chain of institutions, networks, databases and identity-verification systems to keep functioning.
That doesn’t mean we should abandon the digital financial system. I certainly don’t intend to.
But it does raise an interesting question for those of us who have spent decades accumulating savings for the future: Should everything we own depend on the same type of infrastructure?
When is convenience a true benefit, and when is it just a vulnerability?
That’s one reason some people think about more than one kind of diversification.
Multiple types of diversification
Most of us understand the basic idea behind diversification: Don’t rely entirely on one type of asset. Just like Grandma Reagan said, “Don’t put all your eggs in one basket.”
But there’s another question that I think gets less attention: How are those assets actually owned, accessed and held?
Today, most of our financial life is managed through computer screens. We check balances online, transfer money electronically and access accounts with passwords and verification codes. We can move tens of thousands of dollars in a moment without touching anything but a keyboard.
There’s nothing inherently wrong with that.
But there are also physical assets, and those come with an entirely different set of advantages and disadvantages.
Real estate is an obvious example. As the old saying goes, “They’re not making any more land.”
Real estate is tangible. Nobody can remotely hack into a computer system and electronically carry your acreage away. On the flip side, land is about as non-portable as an asset can get. It stays where it is. It requires taxes, insurance, repairs and ongoing maintenance, and most of you know it’s not exactly liquid. Buying and selling real estate can take months.
Physical precious metals are different. Physical gold, for example, is tangible while also being remarkably compact relative to its value. As I like to say, you can fit a king’s ransom in a backpack.
That doesn’t mean physical gold is somehow immune to risk. But it presents a fundamentally different kind of ownership from all the traditional financial assets accessed primarily through electronic accounts and online platforms.
The physical metal itself cannot be copied or extracted as data in a breach. You can’t hack a gold bar.
That distinction doesn’t make one form of ownership universally better than the others, but it does make them different.
And difference, after all, is the whole point of diversification.
People who own physical precious metals personally can make their own decisions about how and where to store them. Precious Metals IRA assets get stored in a precious metals depository which, take my word for it, are 1,000 times more secure than your floor safe or the coffee can buried in your back yard.
Whether stored at home or in a secure vault, the underlying assets themselves are still tangible and physical.
And I think that’s the larger lesson here.
Our increasingly digital world has given us extraordinary convenience. I have no interest in giving that up. I don’t want to go back to the time when I stood in line at the corner store to pay my electric bill with a money order.
But convenience doesn’t have to extend to every form of savings.
Diversification can mean owning different types of assets. It can also mean thinking about the different ways those assets exist, how they’re secured and protected from digital threats.
For some retirement savers, that’s part of the appeal of physical gold and other qualifying precious metals: Not because physical assets are risk-free, and not because the digital financial system is inherently unsafe, but because physical precious metals offer a form of tangible ownership with a different set of risks and characteristics.
In an increasingly digital world, sometimes there’s value simply in owning something you can’t download.
If that idea resonates with you, it may be worth learning more about what physical precious metals can offer as part of a diversified approach to retirement savings.
The dollar buys less today than it did a year ago, a decade ago, a generation ago. That slide is the predictable result of endless printing and borrowing. Dr. Ron Paul believes the FED has the answer. But they’re keeping it to themselves. Fortunately, a new financial chart has publicly exposed their secret moves. See it for yourself: https://freekit.birchgold.com/lf/ro...D_v02a_article&placement=article&cid=rp_media
To learn more about how physical gold could help protect your retirement portfolio, click here to get your FREE info kit on Gold IRAs from Birch Gold Group. And now introducing a Crypto IRA to capitalize on the fastest growing market in the world.
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Continue reading...
[ H/T The Burning Platform ]
