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The Biggest Financial Disturbance in History

By Tom Dyson, publisher, The Palm Beach Letter
Thursday, April 13, 2006

It felt like a political rally.

As he walked onto stage, the crowd rose to their feet, waving, cheering and banging inflated plastic tubes – called Thunder Sticks - together.

I wasn’t expecting much from Robert Kiyosaki. From his picture in the program, I assumed he was a smug greaseball. The crowd greeted him like a rock star though.

Kiyosaki really surprised me with his speech. He made total sense. In fact, I wholeheartedly agreed with everything he said.

Work. Save. Invest long-term. Diversify. This is what your parents tell you. This is what you learn in school. This is what the experts say.”

That advice is designed to keep you poor,” he told the crowd. “It’s all

Kiyosaki went on...

Savings is the most risky investment you own. The government is stealing your savings every day. The dollar has lost 50% of its value in the last 10 years and it’s taking your savings with it.

As for work... you are all so busy working your asses off for your companies and their crappy benefit schemes that you don’t have any time to build wealth for yourselves. By working for corporations, you guarantee yourself a very poor retirement.

Forget mutual funds, 401ks, bonds and corporate benefit schemes. I don’t use any of these,” he told the crowd.

Then he predicted a big crash in real estate. But he said it with optimism. Large financial disturbances create tremendous opportunity for rich people, he said.

At this point, he invited his real estate advisor onto stage. This guy had twenty years experience buying and selling property in the San Francisco area - the hottest market in California.

I’m telling you right now,” said the broker, “a tremendous opportunity is coming our way. You need to listen to me. The game is over. No one is buying houses. The market is flat. I know this because this is my job. A crash is definitely coming. But this is good news for us. There will be more opportunity to make money in real estate in the next few years than we’ve ever seen.

Anyone whose business depends on house price appreciation is in big trouble,” he said. “The flippers are going to get killed. They’re going to be desperate to get out. We’re going to take advantage of them.”

Kiyosaki invited another man onto stage. This guy owns a real estate investment company with a property portfolio worth several hundred million dollars.

We turn away people who want to rent our apartments all the time because their credit risk is too high. Then we see the same people buying houses one week later,” he said.  “Right now, we’re just trying to build up cash so we can snap up the bargains and distressed sales. There is a crash coming. Anyone who buys a house now is gambling.”

Kiyosaki took the microphone again.

The biggest financial disturbance in the history of the world occurred between 2000 and 2006, caused by Y2K, the tech crash and 9/11. These three events caused governments around the world to print money... and print more money... and more money. George is pouring money on us. Governments around the world have printed more money than ever before. And it isn’t going to stop.

I’ve made millions in the past 6 years... more than I’ve ever made before. Rich people everywhere have made so much money since 2000. But here’s the irony. Rich people don’t want money. It’s no good anymore. We want assets. At the same time, poor people are told to get out of debt and save their money. It’s disgusting.”

Kiyosaki highlighted 1971 as the year it all started... when Nixon took America off the gold standard. “From that day, the dollar stopped being money and became currency. Currency can be printed to infinity. An almighty inflation is coming.”

Kiyosaki’s final word:

My biggest investments are in long-term real estate, gold, silver, oil, gas and certain asset rich companies.” 

I was completely surprised.  One of the world’s most popular real estate advocates of the past few years is telling people to avoid speculative property deals and hold real assets like gold and silver...

Surprised... but in total agreement.

Good investing,


Market Notes


At the end of 2005, yield on the benchmark U.S. 10-year bond sat at 4.4%.  Today, the yield is nearly 5%.  Interest rates are rising.

This big rise in rates has caused a big correction in the price of bonds.

Take the iShares Lehman Brothers 20+ Year Bond Fund (TLT) for example: This popular exchange-traded fund mimics the action in the ten-year U.S. government bond, and offers traders an easy way to bet on the direction of bond prices.

As the 2-year chart below shows, the TLT recently broke through important support levels and has made a significant new low for the past year.  If bond yields keep rising, this breakdown in the TLT will get much worse.

Sinking to new lows… the TLT (2-year chart):

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