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The Cybersecurity Play That Doubled Once – Will Double Again

Not long ago, a relative of mine was the victim of identity theft. And I have to tell you that I really felt for the entire family.

The thief ran up nearly $20,000 in charges, opened new accounts and tried to open others.

And I can tell you that the frustrations over the losses (most of which ended up being covered) were dwarfed by the helplessness that came whenever new charges showed up – and the worry that was spawned by never finding out how the whole mess started.

As we watch the headlines about data breaches and cybercrime – and watch as the violations move closer and closer to home – those worries only escalate.

  • Featured Story

    Prepare for Years of "QE Forever' with Ben Bernanke at the Helm

    People Bernake

    When Ben Bernanke testified before Congress Tuesday and Wednesday, he staunchly defended his easy- money policies like quantitative easing, or "QE Forever."

    "We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery," the Federal Reserve chairman said.

    Bernanke added the central bank takes "very seriously" the excessive risk-taking its dovish policies could provoke and is watching markets carefully.

    He maintained that the bank's accommodative monetary policy has "supported real growth in employment and kept inflation close to our target [2%]."

    But some Fed officials are growing concerned about quantitative easing - the Fed's purchases of $85 billion in securities a month - and believe it would be prudent to slow or stop the buying well before the end of 2013. Esther George, president of the Federal Reserve Bank of Kansas City, is one of the biggest hawks in the Federal Open Market Committee (FOMC) this year, citing unease about economic stability and inflation.

    "While I share the objectives [of the FOMC]," George said in a Feb. 12 speech at the University of Nebraska Omaha, "I dissented because of possible risks and the possible costs of these policies exceeding their benefits...While I have agreed with keeping rates low to support this recovery, I know keeping interest rates near zero has its own consequences."

    Despite the increasingly anxious sentiment, as long as Bernanke remains at the helm, QE Forever will be the policy. Here's why.

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  • qe3 definition

  • Peter Schiff: Thanks to QE3, We're All Screwed U.S. Federal Reserve policies like QE3 are building up to an inflationary catastrophe, says economic expert Peter Schiff.

    Schiff, the CEO and Chief Global Strategist of Euro Pacific Capital, made his remarks about the dire consequences of excessive quantitative easing in a video interview on Yahoo! Finance's Breakout.

    Schiff said he has dubbed the Fed's third round of bond-buying, known as QE3, "Operation Screw" because "everybody's pretty much screwed if they own dollars."

    He warned that the Fed can only continue its policies of buying U.S. Treasuries and mortgages by printing more money, and printing more money inevitably will drive much higher inflation.

    "The Fed is now promising to print $85 billion a month," Schiff said. "That's over a trillion dollars a year. And I think that's just their opening bid."

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  • QE3 and Low Interest Rates Help Savers? Bernanke Thinks So U.S. Federal Reserve Chairman Ben Bernanke wants you to believe his cheap money, low interest policies like QE3 actually have benefits for savers.

    America's savers, many of whom are retired or nearing retirement, would beg to differ.

    You see, low rates at the Fed - which has pledged to keep its interest rates near zero at least through 2015 - means low rates on conventional savings vehicles like bank accounts, certificates of deposit, and money market funds.

    Those rates affect $10 trillion in savings-like products, costing savers billions of dollars.

    For example, if a saver had $100 in a savings account in 2008 that paid 0.35% interest, she'd have just $102 today. But with inflation, $100 worth of goods in 2008 now costs $107.

    That's a loss of 5% in four years, the sort of math that eats away at a retiree's standard of living.

    And the rates of 2008 look fantastic compared to what's available now.

    The Fed's actions have pushed down interest rates to microscopic levels. The average savings account interest rate has fallen one-third in the last year alone, to 0.08%.

    The average yield on five-year CDs last month dropped below 1% for the first time ever. Back in 2007, five-year CDs provided a yield of 4%.

    And yet in a speech he gave at the Economic Club of Indiana on Monday, Bernanke said his policies are helping savers.

    Here's why.

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  • How QE3 and Higher Inflation Are Part of the Fed's Master Plan U.S. Federal Reserve Chairman Ben Bernanke might not admit it, but he just drastically increased the inflation risks for 2013 and beyond.

    That's because Bernanke pledged on Sept. 13 that QE3 -unlike the stimulus programs before it - will continue for an unlimited timeframe.

    QE3 has already led to a rally in commodity prices, like the previous Fed stimulus actions.

    But this time the inflationary surge will get much, much worse.

    "If the governments and central bankers continue to flood the world with cheap money, it has to translate into some kind of inflation," Money Morning Global Investing Strategist Martin Hutchinson recently explained. "We started with asset inflation. But my sense is that the transition from asset inflation to consumer inflation will happen very quickly."

    With median income levels at averages not seen since the mid-90s, U.S. households need to prepare their savings to survive higher prices - especially while interest rates remain near zero.

    Unfortunately, it appears this environment is exactly what Ben Bernanke has in mind.

    "Not only will they tolerate higher inflation, not only will they wish for higher inflation, but they actually may target higher inflation," PIMCO CEO Mohamed El-Erian told CNBC ofthe Fed. "This is a historical bet that our kids will be reading about in history books."

    Here's what Bernanke has planned.

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  • QE3 Becomes QE Forever Welcome to unlimited quantitative easing, or QE Forever.

    The U.S. Federal Reserve goosed equities, Treasury yields, gold, silver, oil, platinum, palladium and investor sentiment on Thursday when it announced additional stimulus to spur economic growth.

    The central bank said it will continue to buy mortgage-related debt and other securities until the job market shows significant signs of improvement so long as inflation remains tame.

    "The market got what it wanted. Stocks immediately shot up," James Meyer, chief investment officer at Tower Bridge Advisers told Reuters.

    In fact, the markets got more than expected.

    As part of the Fed's new scheme, a marked difference from the first two rounds of QE, it will buy $40 billion of mortgage debt per month. Additionally, the Fed reiterated its stance of keeping interest rates at historic low levels, extending the time frame out until at least the middle of 2015.

    "This is definitely a significant shift in FOMC policy," Julia Coronado, chief economist for North America at BNP Paribas in New York and a former Fed economist told Bloomberg News.

    Plus, the Fed said it would continue Operation Twist, its action to bring down long-term interest rates.

    Collectively, the Fed moves will flood some $85 billion a month into the struggling U.S. economy for the rest of 2012.

    The Fed has always set a determined amount of Fed purchases. This time, however, it let America know that easing will endure and no tightening will occur until confidence recovers.

    That's why QE3 is a game-changing move for the U.S. economy.

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  • Today's FOMC Meeting: We Could Wait Four More Months for Action The U.S. Federal Reserve continued its wait-and-see stance today (Wednesday) and remained in idle mode when it said and did little at the conclusion of its two-day Federal Open Market Committee (FOMC) meeting.

    The central bank decided to leave rates unchanged, reiterated it would leave rates low through at least 2014 (not extending them to 2015 as expected) and did not announce a third round of quantitative easing.

    The Fed chiefs did, however, voice that should conditions warrant, they are ready to step in and take aggressive steps to bolster the U.S. economy.

    PIMCO's leader Bill Gross told CNBC that "a changing in policy landscape can be expected in a month or so."

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  • The Fed's Mixed Messages on QE3 Federal Reserve Chairman Ben Bernanke, speaking before the Joint Economic Committee Thursday morning, refused to hint at whether or not investors can expect another round of stimulus - either in QE3 or Operation Twist - to help the struggling U.S. economy.

    Rep. Kevin Brady, R-TX, asked Bernanke to "look the market in the eye" and tell investors what to expect from the Fed. Bernanke refused to commit to a policy, but said the Fed could deliver an answer in the next couple of weeks.

    Bernanke's comments indicated that the Fed would continue to monitor the U.S. economy as needed, but that no action like another round of quantitative easing was immediately necessary.

    "The Committee reviews the size and composition of its securities holdings regularly and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery," Bernanke said in prepared remarks.

    His non-committal comments contrasted those made a day before by other Fed members, including Vice Chair Janet Yellen and San Francisco Fed President John Williams, who indicated that more stimulus by the central bank is necessary to boost the U.S. economy.

    "It may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest," Yellen said Wednesday in a speech in Boston.

    Also on Wednesday Federal Reserve Bank of Atlanta President Dennis Lockhart said another round of Operation Twist could be considered.

    "There is capacity to do more," Lockhart in a speech in Florida. "It is certainly an option. I'm not going to speculate on what the FOMC will do."

    Bernanke's remarks followed the market's best daily performance of 2012. The Dow surged 287 points on Wednesday, closing at 12,414.79. Despite the mixed Fed messages, markets started off well Thursday, with each index rising more than 1% after The Peoples Bank of China announced it would cut its deposit and lending rates 0.25%, marking its first cut since 2008.

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