The United States economy is showing signs of growth, evident in data such as an increased number of new jobs and easing inflation.But is it?
However, renowned financial educator and author Robert Kiyosaki , known for his personal finance books "Rich Dad Poor Dad", is completely negative that the economy is on a growth trajectory despite indicators such as a robust stock market .Instead he is confident that the biggest crash in history ever is coming soon, as reported by finbold.com
In a post on X (formerly Twitter) on February 3, Kiyosaki argued that the real state of the economy remains in doubt. He pointed out that only "whores" believe in the existence of growth, claiming that a major crash is imminent.
At the same time, Kiyosaki played down the power of the Magnificent 7, noting that their recent growth has been sustained through what he calls funding "from US government dollars."
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"The biggest crash in world history is coming. The good news is that the best time to get rich is during the crash. The stock market is going higher and higher. The fools actually think the economy is strong. Don't be fooled. The Magnificent 7 financed by US government dollars keeps the stock market up. Please watch out. Stock and bond markets are about to crash."
The US is showing strong economic data
Notably, the finance professor's stance comes as the U.S. economy added 353,000 jobs in January, marking a stronger-than-expected gain to start 2024 and underscoring the U.S. economy's resilience in an election year.
Additionally, the annual gross domestic product (GDP) report indicated that the economy grew at an annual rate of 3.1% during the year. At the same time, consumer price increases hit their lowest point in more than two years.
Ο Kiyosaki, γνωστός για τις αντιθετικές του απόψεις και τις αντισυμβατικές επενδυτικές στρατηγικές του, υπήρξε ένθερμος επικριτής των συμβατικών οικονομικών συμβουλών. Ο Kiyosaki υποστηρίζει ότι το κραχ είναι θέμα χρόνου και πως το χρηματιστήριο είναι μία φούσκα που ξαφνικά θα σκάσει και θα συμπαρασύρει τα πάντα.Υποστηρίζει ότι ο κόσμος θα πεινάσει γιατί δεν θα έχει χρήματα για να ζήσει.
He has advised people to make gold and silver investments because cash will not exist.
The economist's cautionary stance extends beyond the stock market as he predicts a crash in both stock and bond markets. According to Kiyosaki, Bitcoin serves as a hedge against the erosion of wealth perpetrated by the Federal Reserve, the Treasury and Wall Street bankers.
Is he simply being exaggerated or should investors prepare for the worst? We think he is right about the valuations. However, the problem, as always, is the right choice of time. If one is too quick to sell their positions and cash them out, they can still lose a lot of money, as much as they would have lost if they had held them in the crash.
A lot of people who rushed to sell in the 2008 crash got hurt. He exited the market early and confidently stayed out, and when the decline ended in 2009, he continued to stay out, believing that the bear market was not over.
Result; They stayed with their cash.
The biggest crash in world history will be driven by the most powerful economic force in financial markets – mean reversals.
In the last 500 years there have been many speculative bubbles and for everything
Over the past 500 years, there have been numerous speculative bubbles in everything from the Tulip Bubble, to Railroads, Real Estate, Technology, Emerging Markets (5 times) to Cars, Commodities and Bitcoin. Jeremy Grantham posted the following chart of 40-year market bubbles.
What can cause the crash
What can cause such a change in psychology? Nobody knows. Historically speaking, stock market crashes have always been due to a few specific causes.
1. An unexpected, exogenous event that changes the economic outlook (geopolitical crisis, war, pandemic).
2. Rapidly increasing interest rates.
3. Sudden increase in inflation.
4. Credit events affecting the financial system (Bankruptcies, foreclosures, bankruptcies).
5. Monetary events (a currency crisis)
We also have to keep in mind that the event that brings the crash is always unexpected – and causes the emotion to change rapidly from 'greed' to 'fear'.
As investors, we should never underestimate "risk" by assuming that some higher power, like the Fed, has eliminated it.
“Each era of speculation brings forth its own theories designed to justify its own speculative myths and phenomena. The term "new era" was the slogan for the period 1927-1929. We were in a new era in which the old economic laws had been suspended." It has been written by the Professor of Economics Dr. Benjamin Anderson. So, we know two things for sure:
First Robert Kiyosaki is right that a big crash is coming. But we have no idea when it will come.
