Following the Collapse of the Silicon Valley Bankwarned financial analyst Robert Kiyosaki the central bank of a global powerhouse that could be next to take a hit.
“The biggest bank that will go under is the Bank of Japan,” Kiyosaki explained. “Because the Bank of Japan set interest rates at how much, zero, or whatever they did, [and] funded the derivatives markets. And the derivatives market, as Warren Buffett said about derivatives, they are weapons of financial mass destruction, and the derivatives market in the world today, funded by the Bank of Japan, is a quadrillion [dollars].”
The Rich Dad, Poor Dad author’s comments come amid what some have been optimistic about a market rally after stocks enjoyed another strong day and markets looked positive in March.
However, Kiyosaki questioned the idea of a comeback, pointing to problems with derivatives markets. He also warned that the Bank of Japan’s strong connection to the derivatives markets takes it in another direction vulnerable position and threaten to have a greater impact on the global economy.
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“The Bank of Japan funded derivatives. Derivatives are one quadrillion [dollars]. That’s 1000 trillion,” he explained on “Cavuto: Coast to CoastThursday. “So we didn’t see the crash coming.”
In addition to the problem with the derivatives markets, the financial legend also criticized the money-printing habits along with the Federal Reserve’s aggressive rate-hiking strategy.
“Since 2008, interest rates have gone down, down, down, down Interest charges go to. [Federal Reserve Chair] Powell has hiked rates faster than at any time in history. So someone says, “Well, he’s playing Volcker.” So, [Former Fed Chair Paul] Volcker has been raising interest rates for years. Powell does this for months,” Kiyosaki said.
Kiyosaki argued against age-old Fed advice given the rapid pace of rate hikes.
“This idea of not fighting the Fed and all that, I think that’s old advice. I’d stick with gold and silver… I’ve been Chicken Little or Paul Revere all these years, but I’d still rather have gold than that stuff,” Kiyosaki said on Thursday’s segment, pointing to a piece of paper money.
The industry expert didn’t stop warning of an impending bank collapse, adding that the fallout could open up another avenue for China to assert global dominance.
“Jim Rickards put it best. He calls it a currency war…so I’m very worried,” Kiyosaki said host Neil Cavuto.
“China is coming behind us,” he added.
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While the US dollar was made the global reserve currency in the 1940s, China took aggressive steps to compete economically and replace the dollar with the yuan. Their growing influence through efforts like the Belt and Road initiative has only brought more support to the communist country.
“The problem with Americans is that we live in a fishbowl. We cannot see like everyone can see. And right now the BRICS are Brazil, Russia, India, China, and South Africa Saudi Arabiathey will switch to the Chinese gold yuan, and that will send trillions of [U.S. dollars] back to us,” Kiyosaki said.
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Kiyosaki compared the global economy to a fault line, warning that these factors are already causing shocks and that investors should be wary.
“The San Andreas Fault is still there, which would cause California to fall into the ocean if that happened,” he said. “But I’d rather not live on the San Andreas Fault right now. That’s all I’m saying.”
Source : finance.yahoo.com