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  • Writer's pictureRob Winkler

Renowned Author Robert Kiyosaki Warns of Imminent Stock Market Crash and Historic Economic Downturn

In a series of alarming tweets, Robert Kiyosaki, the famed author of "Rich Dad Poor Dad," has issued a grave warning about an impending stock market crash and a historic downturn in the US economy. Kiyosaki, known for his financial insights and predictions, has been cautioning investors about stocks and growth prospects for over two years.

While markets have been exuberant and the economy appeared to be on a positive trajectory, Kiyosaki's recent warnings have struck a stark contrast to the prevailing optimism. The S&P 500 index has surged by 17% this year, and the tech-heavy Nasdaq Composite has skyrocketed by 35%, largely fueled by investor optimism surrounding the potential of artificial intelligence to drive corporate profits to unprecedented levels.

At the same time, annualized inflation has moderated, easing from a 40-year high of 9.1% to a more manageable 3% over the past 12 months, hovering near the Federal Reserve's 2% target. This moderation has led to hopes that the Federal Reserve, which had raised interest rates from near-zero levels to over 5% in its bid to combat inflation, might soon consider easing monetary policy, thus reducing the likelihood of a recession and providing further support to stocks and other assets.

However, Kiyosaki's ominous predictions caution against such optimism. In his latest tweet, he revealed his concerns about an impending severe stock market crash. While he refrained from providing specific reasons for his outlook, he had previously predicted in May 2021 that the Federal Reserve would raise interest rates to curb inflation, leading to crashes in stocks, bonds, real estate, and gold. Although he was correct in his prediction about the rate hikes, the expected economic fallout did not materialize as asset prices and economic growth displayed remarkable resilience to higher borrowing costs.

Critics argue that Kiyosaki's predictions may be influenced by his vocal criticism of the Biden administration and his longstanding advocacy for gold, silver, and bitcoin as safe-haven assets. Furthermore, the author openly admits that he aims to capitalize on a potential market downturn, asserting that "the best time to get rich is during a crash."

Amidst Kiyosaki's dire warnings, some experts have also voiced concerns over the AI boom being reminiscent of the dot-com bubble, leading to overinflated technology valuations. The speculation surrounding stocks like Nvidia and other AI-related companies has driven their prices to unsustainable heights. Additionally, fears persist that the Federal Reserve may continue raising interest rates if inflation remains stubborn or surges again, potentially triggering an economic slowdown.

Given the contrasting outlooks and uncertainties surrounding the market and the economy, Kiyosaki advises those with investments tied to stocks and bonds to exercise caution and consider seeking professional advice. As the financial landscape remains unpredictable, investors and individuals are urged to stay informed, diversify their portfolios, and be prepared for any potential economic challenges ahead.

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