One thing Robert Kiyosaki will never be accused of is keeping quiet when it comes to Federal Reserve policy. The financial guru and “Rich Dad, Poor Dad” author lashed out at the Fed in a tweet this week, saying that the central bank’s policy of raising interest rates will “crash” stocks, bonds, real estate and the U.S. dollar — and lead to a $1 quadrillion crash in the derivatives market.
In case you wonder what a “quadrillion” is, Kiyosaki also helpfully added that it is “$1 thousand trillion.”
“God have mercy on our world,” his tweet continued, before concluding that World Economic Forum executive chairman Klaus Schwab “owns” the souls of Fed Chairman Jerome Powell, Treasury Secretary Janet Yellen and President Joe Biden.
If that seems like a lot to unpack in a single tweet, it is consistent with Kiyosaki’s general attitude toward the Fed. As reported by the Finbold website, Kiyosak in a recent YouTube podcast accused Powell of not being honest about the impact interest rate hikes will have on inflation.
“Inflation is now systemic,” Kiyosak said. “You will pay more and more next year… When that guy Powell [said] inflation is transitory, he was lying through his teeth.”
Although inflation has been trending lower in recent months, Kiyosaki and others expect it to spike again because of the current banking crisis that has already claimed Silicon Valley Bank and Signature Bank.
“The Federal Reserve is going to have to pick its poison — tolerate some inflation for a bit to see if its current series of rate hikes takes hold and pause, or keep hiking and deal with the financial instability caused by their own policy decisions,” Jamie Cox, managing partner for Harris Financial Group, told Reuters earlier this month.
For his part, Kiyosaki also took a shot at Biden for suggesting that the government can bail out troubled banks without tapping into taxpayer money.
“Biden says the bailout of SVB Silicon Valley Bank will not cost taxpayers anything. What is he smoking?” Kiyosaki said during the podcast.
There is still debate on that point. Most of the cost of taking over SVB and Signature will likely be covered by proceeds the Federal Deposit Insurance Corporation (FDIC) gets from winding down the two banks, CBS News reported. Any costs beyond that would be paid for out of the FDIC’s deposit insurance fund.
The insurance fund would then be replenished by a “special assessment” on banks if need be, according to a joint statement from the FDIC, Fed and Treasury. While Biden has said no taxpayer money will be used to fix the crisis, others disagree.
“Saying that the taxpayer won’t pay anything ignores the fact that providing insurance to somebody who didn’t pay for insurance is a gift,” University of Chicago economics professor Anil Kashyap told CBS News. “And that’s kind of what happened.”
Meanwhile, Kiyosaki has suggested that the inflation issue signals an upcoming global economic crash that has been worsened by Fed policy. His recommendation is to invest in precious metals such as gold and silver as the best alternative to “fake money.”
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