Highlights:
- Kiyosaki asserts the U.S. dollar lost its value when Nixon ended the gold standard in 1971.
- Inflation erodes the dollar’s purchasing power, making traditional savings a risky choice.
- Kiyosaki advocates for gold, silver, and Bitcoin as safer investments in today’s economic climate.
Robert Kiyosaki, the author of Rich Dad Poor Dad, believes that the dollar became ‘fake’ when President Nixon removed it from the gold standard in 1971. According to him, the decision by the president pushed the value of the dollar away from other physical assets and toward US Treasuries and bonds.
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FAKE $ The US dollar became fake in 1971 when President Nixon took the dollar off the gold standard. Since 1971 the US dollar was propped up via US Treasuries and bonds.
That is why I stated in Rich Dad Poor Dad 1: “The rich don’t world for (fake) money 2: Your house is not an…
— Robert Kiyosaki (@theRealKiyosaki) October 14, 2024
Nixon’s Decision and the Shift
The US dollar was backed by gold before 1971 which gave it value over other currencies. President Nixon destroyed this connection which made the dollar a fiat currency. This means that its value now depends on government policies and economic trust. Kiyosaki believes that the action of the former president weakened the true worth of the dollar making it rely on government debt rather than gold.
Robert Kiyosaki believes that the dollar lost its value after 1971. He believes the action taken by the Federal Reserve to print more money to offset debt has led to a decline in value. The printed money has led to inflation, making goods and services more expensive over time. Robert Kiyosaki believes that the U.S. relies too heavily on debt, which, in turn, weakens the dollar against other currencies worldwide.
Kiyosaki Insights on Inflation and the Impact on Savings
Kiyosaki has warned investors against saving money in US dollars. He argues that inflation erodes the actual worth of the savings over time. The purchasing power of the dollar declines as prices rise hence it is a less efficient method of wealth protection. Instead of relying on cash, Kiyosaki has adviced people to explore alternative investments.
Kiyosaki has suggested alternatives such as gold, silver, and Bitcoin. He believes these can help protect against the weakening dollar. He believes that these assets retain more value than the US dollar. When inflation rises, the value of these investments becomes more stable. He pointed to gold as an example, which recently reached a new high of $2,657 per ounce.
The price of gold has hit all time highs. Since 2000 the people who invested in gold have done very well.
I am one of those investors. I own physical gold…. No paper gold ETFs.Unfortunately higher gold prices generally means investors are becoming pessimistic. Many…
— Robert Kiyosaki (@theRealKiyosaki) October 12, 2024
Kiyosaki has argued investors diversify their assets by holding a combination of precious metals and cryptocurrencies. These assets provide greater security during unstable economic times.
The U.S. Financial System at Risk
Kiyosaki is a frequent opponent of the United States’ existing financial structure. He claims that it is based on unsustainable debt and the continuous cut of interest rates is the main cause of market volatility.
Kiyosaki has frequently used the Great Recession of 2008 to illustrate the greater effects of market volatility. Kiyosaki has voiced concerns that the current trend compares to the Great Recession, and if the government does not change its direction, a crisis may occur.
The Need for Financial Education
Kiyosaki has stressed the importance of financial education for citizens to guard their investments. People who lack financial knowledge are more likely to make poor financial decisions, particularly during rising inflation. Kiyosaki’s concerns have caught the attention of many investors. As inflation rises, more people are questioning the economic advantages of saving in US dollars.
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