Robert Kiyosaki: Why the Rich Don’t Rely On the US Dollar

©Robert Kiyosaki

Robert Kiyosaki, renowned entrepreneur and author of “Rich Dad Poor Dad,” has long warned that the U.S. dollar is doomed and that the rich protect their wealth by investing in assets like gold, silver, oil, and real estate rather than hoarding cash. His warnings are based on a lifetime of studying monetary history and observing how governments inevitably destroy their currencies through reckless overspending and money printing.

According to Kiyosaki, here’s why the rich don’t rely on the U.S. dollar — and why you would be wise not to, as well.

The Gold Standard Meant Limited Money Printing

Kiyosaki first became aware of the importance of gold when he was serving in Vietnam in 1972. His “rich dad” mentor wrote him saying, “President Nixon took the dollar off the gold standard. Watch out, the world is about to change.”

Up until then, the dollar had been backed by gold, which limited how much money the government could print. With the gold standard removed, dollars became “fake money” — merely government IOUs that could be created in unlimited quantities.

After reading about the dropping of the gold standard in The Wall Street Journal, Kiyosaki and a fellow soldier flew 25 miles into enemy territory in Vietnam hoping to buy gold from locals at the artificially low U.S. price of $35-40 an ounce, not realizing that the global spot price was already $55 an ounce. An elderly woman they met firmly rejected their lowball offer, teaching them that gold trades at the same price everywhere in the world.

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While their mission failed, Kiyosaki learned a valuable lesson about gold being real money whose value transcends borders, unlike paper dollars which governments can devalue at will.

Betting Against the Dollar

In 1996, Kiyosaki opened gold and silver mining companies because he expected precious metals to increase strongly in value as the dollar declined. His logic was that gold and silver had hit multi-decade lows in terms of the dollar, with gold at $275 an ounce and silver at $5 an ounce, so they had great upside potential.

He saw the overvalued dollar and cheap oil ($10 a barrel at the time) as signs that major changes were coming to financial markets. Kiyosaki proved prescient, as gold now trades around $1,830 and silver around $23, while the dollar has lost almost 95% of its purchasing power due to inflation.

Central Bank Policies Lead to Currency Crises

Kiyosaki believes that reckless government spending and central bank money printing make some form of dollar crisis or hyperinflation inevitable. He points to the differing approaches of the U.S. and Germany coming off World War I as illustrating the paths that lead to currency ruin.

The U.S. stayed on the strict gold standard, which prevented money printing and led to deflation and depression. Germany dumped the gold standard, printed massive amounts of money, and suffered crippling hyperinflation that destroyed the German mark in 1923.

Kiyosaki sees current U.S. policies as laying the groundwork for Weimar-style hyperinflation down the road, adding that the Federal Reserve has chosen to print trillions of dollars to prop up the economy, sacrificing the dollar’s value.

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Losing Faith in the Dollar

Kiyosaki believes that investors and foreign governments are losing confidence that the U.S. has the fiscal discipline to maintain a strong currency. Growing budget deficits and skyrocketing debt accelerated by the pandemic are undermining faith in the dollar.

There are only unpleasant options — the Fed can print more money to cheapen the dollar’s value, or it can raise interest rates to support the dollar, crushing the economy and stock markets. Kiyosaki sees no easy way out for the dollar. That’s why he, and rich people like him, are so interested in gold.

Gold as Eternal Money

Throughout history, gold has emerged as the ultimate money that holds its value over centuries, which is something the rich know well. Kiyosaki expects that gold will once again reclaim its monetary status when today’s dollar and financial system collapse under the weight of excessive debt and money printing.

Many dismiss gold as an investment, but Kiyosaki sees it as insurance against the certain debasement of paper currencies — a lesson proven over thousands of years. People deride it until a crisis makes the value of unbacked government money starkly apparent.

Wealth Transfer Coming

Kiyosaki’s team suggests that with the coming dollar crisis, possibly triggered by a U.S. debt default, the next decade will bring “the biggest transfer of wealth in modern history.” He predicts savings will be wiped out as the dollar implodes.

But as bubble assets like stocks, bonds, and real estate crash, Kiyosaki says individuals with foresight will use their cash to scoop up underpriced assets, like Warren Buffett buying silver amid scorn in the 1990s. The financially intelligent will capitalize on the crisis while others get caught empty-handed.

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Take Action Before the Rush

Kiyosaki says that because most Americans remain ignorant about real money like physical gold and silver, it presents a rare opportunity today. Once the inevitable dollar crisis appears, millions will desperately rush into precious metals and cause prices to soar.

By educating yourself and acting prudently now, you can position yourself on the winning side of the coming wealth transfer rather than becoming its victim. Follow Warren Buffett’s example — be greedy when others are fearful, and fearful when others are greedy.

What Does It All Mean?

In closing, Kiyosaki shares that no one can predict exactly how the dollar’s reign will end. But with the massive debt overhang, it’s certain that the dollar’s days as global reserve currency are numbered.

Dollar collapse may occur slowly via inflation, or abruptly in a debt crisis. Either way, Kiyosaki urges individuals to take matters into their own hands. Relying on government money and financial institutions is futile — protect yourself through real assets. The time to prepare is now.

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