Renowned writer and economist Robert Kiyosaki has issued a warning to investors, predicting a future stock market downturn. In a recent tweet, Kiyosaki stated that there are “too many signs” pointing to a severe crash in the market. Concerned about the potential impact on those whose financial future is tied to stocks and bonds, he advised seeking professional advice and being cautious.
When explaining his anticipation of a stock market crash, Kiyosaki pointed to his earlier prediction that the US Federal Reserve would increase interest rates to combat inflation. He warned that this move would lead to a crash in not only stocks but also bonds, real estate, and gold.
Kiyosaki’s predictions have been proven correct, as the United States has experienced the worst inflation in decades over the last several months. As a result, the Federal Reserve has implemented a series of interest rate hikes. Currently, the interest rate stands at 5% to 5.25%, a significant increase from the 0% rate at the beginning of 2022.
Despite the interest rate hikes, US asset prices and economic growth have remained resilient thus far. The benchmark S&P 500 index has seen a 17% increase this year, and the Nasdaq Composite has grown by 35%, partially propelled by increased investments in artificial intelligence.
However, Kiyosaki argues that the current stock market growth does not indicate economic health but rather stems from the suspension of the debt ceiling that occurred last month to avoid a default. He tweeted that the removal of the debt ceiling allows national debt to rise alongside the stock market, resulting in the rich getting richer while the rest of America becomes poorer. To protect against potential economic instability, Kiyosaki recommends sticking with “real money and real assets” such as gold, silver, and bitcoin.
The staggering US debt of over $32 trillion and a warning by the Congressional Budget Office (CBO) further underscore the potential risks. The CBO predicts that if current legislation remains unchanged, US debt will nearly double over the next 30 years, reaching 181% of GDP by 2053.
In conclusion, Robert Kiyosaki’s warning about a future stock market crash is based on his analysis of various factors, including interest rate hikes, inflation, and the suspension of the debt ceiling. While the stock market has remained strong thus far, Kiyosaki advises caution and seeking professional advice, recommending alternative assets like gold, silver, and bitcoin. The growing US debt levels and projections from the CBO also highlight the need for proper financial management to avoid potential economic instability in the coming years.
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