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Kiyosaki’s American Economic Doomsday

Posted By Jim On 04/03/2006 @ 7:16 pm In Personal Finance | 9 Comments

My friend Tony sent me Robert Kiyosaki’s, of Rich Dad Poor Dad fame, Yahoo Finance column in which Kiyosaki claimed that “cash is trash” and that due to inflation and the tenuousness of the US economy the value of money, as opposed to appreciating assets, is slowly declining and those of us holding onto cold hard cash will find their popularity waning. We should be holding gold and silver instead.

My concern is that very soon, citizens of the world will tire of America’s gross fiscal mismanagement and hesitate to take U.S. dollars. In order to keep the world interested in the greenback, interest rates must rise. When that happens, U.S. assets, … will drop in value. Some real estate prices will increase because replacement costs are high, but overvalued real estate will drop.


As the article continues, the picture it paints is bleaker. Kiyosaki claims that if you diversity, you’ll lose because too many asset classes will suffer and only those that focus, pick the few winners, will be able to thrive and the winners are those assets which are not tied to the US economy – commodities like gold and silver.

This article was written on March 21st and by that time gold had already seen record-breaking highs with silver hot on its heels. He also makes these claims after the dollar was at record lows compared to the euro a year and a half ago. At first I was a little concerned because Kiyosaki was playing on our very publicly known fears – the enormous national debt and its effects on us (on the 31st there as an Ask The Expert column [3] about the debt and its effects on our retirement). However, Kiyosaki is like the guy who reads the BBC at 4 am before everyone else is awake and then proceeds to pretend the tell the future – we know all this already. Buying gold and silver now, at record highs, is like trying to predict a winner in the 100 yard dash 8 seconds in – it’s not a big deal if you pick the guy in the lead at that point.

What do you all think?

via Yahoo Finance [4].


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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/kiyosakis-american-economic-doomsday.html

[3] Ask The Expert column: http://money.cnn.com/2006/03/31/pf/expert/ask_expert/index.htm

[4] Yahoo Finance: http://finance.yahoo.com/columnist/article/richricher/2987

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