News Bites
Robert Kiyosaki: 'The biggest crash in world history' hits this October
The whole market, including Bitcoin, gold, stocks, is about to face a serious crash in October, said Robert Kiyosaki, best-selling author of “Rich Dad Poor Dad”.
Speaking to Michelle Makori, editor-in-chief of Kitco News, Kiyosaki explained the factors in the economy that have been leading up to this upcoming crash, and highlighted the severity of the market downturn that’s to come.
“It’s going to be the biggest crash in world history. We have never had this much debt pumped up. Debt is the biggest problem of all…the debt to GDP ratio is out of sync. So when it comes down, and it’s going to bring everything down with it, that’s when I’m going to be buying more gold, silver, and Bitcoin,” Kiyosaki said. “The S&P 500 is really the S&P 7 and it’s being held up by Secretary of the Treasury Yellen and [Fed Chair] Powell. There’s no correlation between the economy and what Yellen and Powell are doing.”
He stressed that this market crash will see prices rebound afterward, and noted that this could be a good buying opportunity, but only for certain assets.
“I’m a little strange in that I like crashes. This next crash is going to be really, really good - it will bring down gold, Bitcoin, stocks, but the good news is a crash is a good time to get rich,” he said, adding that he is long-term still bullish on non-equity assets. “That’s why I’m optimistic, and I’m very optimistic on gold, silver, and Bitcoin, not on stocks.”
Kiyosaki’s comments come as the House votes this week on a bill to suspend the U.S. debt ceiling. If Congress fails to come to an agreement before the October 18 deadline to raise the debt ceiling, the government will risk a default on its existing debt obligations, something that is unprecedented.
Kiyosaki said that the same forces that have artificially propped up the equity markets, namely the expansion of the money supply, have also created a debt bubble. He added that inflation is unlikely to be persistent.
“The big debate is [whether there] is there inflation or deflation. Historically... the nominal debt to GDP is a correlation of M2, the volume of money, and the velocity of money. The reason that Yellen and Powell are scrambling is because they’ve expanded M2, so everybody thinks there’s going to be inflation, but the velocity of money is plummeting. People are not spending. So, they pump all this money in, prices go up…so it is transitory inflation. But the problem is we’re stuck with this massive debt and all it’s done is bump up the stock market and real estate market. The money has not gone into the economy. That’s the sad part,” he said.
Kiyosaki’s upcoming book, “The Capitalist Manifesto,” touches on social-economic developments in the U.S., writing that that the government is exercising more totalitarian control measures of the populace.
In particular, a central bank digital currency in the U.S. would be “fascist”, he said.
“I’m afraid of the Fed Coin than anything else. It will be total control on the economy and our lives. They’ll monitor everything we do and how we spend our money. Our freedom will be gone,” he said.
For more information on how to invest, watch the video above. Follow Michelle Makori on Twitter: @MichelleMakori (https://twitter.com/MichelleMakori).
