The Federal Reserve has stopped referring to inflation as “transitory” as prices keep rising
The increase in consumer prices in the United States in May was the highest since December 1981, at 8.6 percent. That might give the Fed more justification to keep raising interest rates, which are already having a major negative impact on the stock market.
Many investing veterans see it as a vicious circle. Robert Kiyosaki, the author of Rich Dad, Poor Dad, is one of the most recent experts to raise the alarm.
“When inflation goes up, we’re going to wipe out 50% of the U.S. population,” he disclosed earlier this year to Stansberry Research.
Let’s examine what Kiyosaki meant by it in more detail.
The situation of the American economy at the moment doesn’t exactly make Kiyosaki pleased.
“America has stopped producing products; we are producing bubbles,” he continues, pointing out that the bond, stock, and real estate markets are currently all experiencing bubbles.
The president’s decision to postpone the construction of the Keystone XL oil pipeline, which the author believes is a major factor in the high cost of energy, is also criticized by the author.
And it is not good news for the average citizen.
“The average American doesn’t have 1,000 bucks,” Kiyosaki says. Most Americans do not have enough money saved to meet an unexpected $1,000 bill, according to a recent Bankrate survey.
For those who want to enjoy their golden years, it also implies difficulty. According to Kiyosaki, the stock market will tumble when the bubbles pop. As a result, those who rely on 401(k) plans “are toast.”
“We don’t have a retirement, our pensions are bust.”
Time to protect yourself!
It should come as no surprise that Kiyosaki favors safe-haven investments like gold and silver, given his pessimistic outlook. Since precious metals create thin air as fiat money, they help investors maintain their purchasing power.
Gold’s price has increased by around 8% so far this year. Investors now have another reason to investigate the yellow metal because Russia invaded Ukraine.
Despite owning gold, which he originally bought in 1972, Kiyosaki preferred silver in the current economic climate.
In a tweet from March, Kiyosaki revealed that he had bought 2,500 American Silver Eagle bullion coins and provided his bullish excuses for doing so.
“Gold has already moved up. Bitcoin is still too high,” the tweet claims. Silver is 50% below its all-time high. Silver is a metal used in industry and money.
As a rule, bubbles pop eventually. Many people have witnessed a huge decline in their wealth. Large drops, however, can present opportunities for those prepared to buy the dip.
“The good thing about a bubble is that when they burst, everything goes on sale,” Kiyosaki said.
During the financial crisis of 2008, the author started “buying real estate at bargain prices.” It’s reasonable to argue that was a bold move given how much real estate has increased since then.