We learn something new about Mr. Kiyosaki everyday. Not only is he a self proclaimed real estate expert, but now he is claiming to have founded a gold mining company! Truly amazing. Now let's examine his most recent piece from Yahoo Finance:
Bet on Gold, Not on Funny Money
"I was confident about gold and silver because I wasn't betting on them. Rather, I was betting against the dollar and oil. In 1996, oil was about $10 a barrel, and that seemed low. My suspicions were that the dollar was strong, and I believed it would drop when oil went higher. I felt the conditions were right for a massive change in the markets. So far, I've been pretty accurate."
In 1996, crude oil trading on the NYMEX traded at prices between $18-25. It never went to $10 a barrel. Sorry Robert. Your accurate suspicions of the U.S. dollar dropping would have lost the average investor a fortune as you can see from this chart:
"In many ways, the conditions are far worse now than they were in 1996. Today, we have a slowing demand for the dollar. At the same time, it appears that the Federal Reserve is increasing the supply of dollars.
As you know, low demand and high supply means a drop in value of anything, including the dollar. And in order to save the dollar's purchasing power, Ben Bernanke, the new Federal Reserve chairman, may be forced to raise real interest rates. By "real," I mean an interest rate that's higher than the rate of inflation.
(For example, if inflation is at 5 percent and interest rates are at 5 percent, the real interest rate is 0 percent. So, in this example, to increase demand for the dollar, the Federal Reserve would have to raise interest rates above 5 percent, to, say, 8 percent. That would means investors would receive a net 3 percent return on their money.)
So Bernanke has a tough choice to make: If he prints more money to bolster the dollar, inflation increases and the dollar may collapse. If he raises interest rates to slow inflation, the economy may go into recession."
If Fed Chairman Bernanke prints more money it will bolster the dollar? WTF is wrong with you? I think you have confused bolster with debasement.
The article continues on in which he talks about the issues of peak oil, and the Fed no longer publishing the M3 data, and why he's such a smart investor (note: he never shows proof of his genius). It's fairly obvious he has been reading some tinfoil hat investment websites and ripping off the ideas and calling them his own.
poor.dad
Would this be a good time to get a Honda full of silver? How about an AK-47?
Posted by: Mr X | October 27, 2006 at 01:54 PM