Robert Kiyosaki, the popular financial guru and author of the New York Times Best Seller “Rich Dad, Poor Dad,” tweeted on Thursday that the ever-increasing fed rate hikes will crash stocks, real estate, bonds, and even the U.S. Dollar and thus lead to a $1 quadrillion crash in the global market.
The Feds are not cutting rates anytime soon
The Federal Reserve increased its rates on Wednesday by 25 basis points (bps), which is more than 4.75 % – something that was nearly 0 % a year ago. A number of people expected the Federal Reserve to cut down on its rates soon, but ChairPerson Jerome Powell has informed that the rate cuts are not the Fed’s base case. Not one to stay silent on matters of importance, Kiyosaki has accused Powell of not being honest about the disastrous effects of the fed rates on inflation in a recent Youtube podcast, as reported by the Finbold website.
Silicon Valley Bank and Signature Bank are facing huge problems
The current banking crisis has already affected Silicon Valley Bank and Signature Bank. Kiyosaki’s claim that the fed rate hikes will crash stocks is indeed very real and imminent. CBS News has reported that the price of acquiring Silicon Valley Bank and Signature Bank will most probably be covered by the proceeds of the Federal Deposit Insurance Corporation (FDIC). Kiyosaki, the founder of The Rich Dad Company, has been warning about a disastrous market crash and huge recession since last year. The fed rate hikes will crash stocks, and this will worsen the current worldwide economic crisis.
Jamie Cox provided his opinion on the matter
Jamie Cox, the Managing Partner of Harris Financial Group, spoke to Reuters this month and told them that the Federal Reserve had to take the poison and tolerate this inflation in order to check whether the current series of rate hikes produce stable results or keep increasing, thus causing severe financial instability because of the central bank’s own policies.
The United States Government’s aim is to cool inflation because it believes that the higher rates will encourage people to save on overspending while also raising borrowing costs. However, they also pull down demand rates which in turn affects the asset rates -thus increasing the risk of a recession. People will lose jobs, homes, and their entire careers.