Hi adam,
Short answer: the cloud is NOT safe, but encrypting the files and password protecting them before transmission makes it a bit safer. (Choose an appropriate password of 10+ characters, symbols, etc.)
Longer answer:
I am a computer science / MIS student, and this is a great question to ask before hosting information on the cloud.
The cloud is currently NOT a safe place to store or transmit data to due to its design.
Reasons against Cloud Storage:
Information that is transmitted to the cloud does not take a predefined path, during its transmission it can leave your countries borders and information security laws. However this has becoming a recent headline problem of even if it is in your country who is looking at it? (NSA?)
The structure of the cloud does not always guarantee where your information will be located once on the cloud. Some data storage providers have cloud hosting all around the world and store your files (or copies of) in various locations.
Cloud providers usually don't guarantee information security or disclose there security measures, alot actually have a disclaimer in there terms of use. So if the cloud server gets hack so can your information. However this isn't usually a problem as the providers mainly have a good history of safety.
Some providers have terms regarding lengths of time that data can be stored on there servers, and additional terms regarding if the data is not accessed within a certain time period (12 - 18 months?) that it will be scheduled for deletion. As well as terms regarding unpaid accounts and deletion of data.
Internet connections need to be stable, and so does the hosting from your provider. Although rare for larger companies to have any server down time it does occasionally happen. But for smaller cloud providers this is a key issue to consider.
The list goes on, but these are a few of the primary concerns.
Reasons For Cloud Storage:
Accessibility -- world wide as long as there is internet
Convenience -- typically accessible at any time
Redundancy -- people often will make backups when they store on the cloud but not when they do at home?
Inexpensive -- Some are absolutely free
Group sharing of information
Overall if you take appropriate security measures it can be safer, and it comes down to if your willing to bite the bullet and accept the risks or not.
But if you are looking for some of the safest forms of data storage perhaps look at Ironkey.
http://www.ironkey.com/en-US/
But then again Ironkey could be overkill.
On the less secure and free side.
I know alot of people who just store things in google drive and ensure security settings are correct, or they save a password encrypted file as an attachment and email it to themselve as email storage is rather large nowadays.