World economy to collapse in 2016,
predicts Kiyosaki
Robert Kiyosaki, the author of best-selling
book, Rich Dad, Poor Dad, predicts that the global economy will collapse by
2016. He forecast this at a recent appearance, organised by Andaman Property
Group, in conjunction with Kiyosaki being invited to speak at the recent
National Achievers Congress in Petaling Jaya.
“I think it will be the biggest financial
collapse in world history,” stated Kiyosaki with foreboding. “[Economist
Richard] Duncan is saying the world economy will collapse in five years, I say
2016, while some others say 2025, but it’s coming down.”
The author and speaker, who shot to fame after
his book appeared on The Oprah Winfrey Show in 2000, believes that after the
economic systems of Greece, Spain and Europe crash, those in the USA and Great
Britain will follow. “It’s going to be led by one bank in America reporting
it’s lost a trillion dollars. Then the money is going to run, and the stock
market will collapse, even while the [US] Federal Reserve prints more money.”
The reason that Kiyosaki cites for this is
that government debts taken on to pump prime markets and support national
budgets are spiraling out of control, especially since money is no longer
pegged to gold, and is being electronically created in quantitative easing
exercises.
“In 1971, President Nixon took America off the
gold standard (cancelling the direct convertibility of the United States dollar
at approximately USD35 to every ounce of gold) and we could print as much money
as we wanted,” he reminded attendants. Countries to have implemented such
exercises over the last few years include the USA, Great Britain, China and
Japan.
Exporting countries, such as Malaysia, will
further be impacted by the slowdown of China’s economy, pronounces Kiyosaki.
“China is the driver of the world economy today, but their exports only
increased 5%, and their imports have now dropped to 0%. So this means that
China’s economy is slowing so fast that they’re stopping importing. At the same
time, China now has 60 million condominiums unoccupied because they speculated
too much.”
This pronouncement is ironic given that Kiyosaki
has been known for being one of the early preachers of financial freedom (or
early retirement) from rental incomes from property investments. This gospel in
fact underlies the theme of many property investment seminars in Malaysia
today.
Such investments benefit from capital
appreciation and inflation, as well positive cash flow after easy access to
cheap credit. As alluded to Kiyosaki in the Chinese scenario however, this
formula is ineffective in the face of empty units.
US investors like Kiyosaki and his wife, Kim,
whom he says owns about 4,500 rental properties, do not have to worry for now:
“The government will send [my wife] money to keep their tenants in their rental
units [if they lose their jobs],” he said.
Kiyosaki opportunely mentions that properties
developed by sponsors Andaman Group, which are mostly rented to college
students, are less affected by economic downturns. Nevertheless, his bold
pronouncements gave his audience much pause for thought concerning the large
scale economic currents sweeping our world today.
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