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215: Robert Kiyosaki on the Post-Pandemic Economy!

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Buck: Welcome back to the show everyone my guest on Wealth Formula Podcast today needs no introduction. He’s the author of several books including the number one selling financial book of all time Rich Dad Poor Dad and of course I’m talking about Robert Kiyosaki. He’s the guy who thousands of entrepreneurs and investors in this world including me credit for fundamentally shifting our ways of thinking and changing our lives. Robert welcome back to Wealth Formula Podcast.

Robert: Honored. Nice to see you off the boat.

Buck: That’s right. You know I’m kind of glad that didn’t happen when we were on that cruise Robert. But yeah I get just curious. Just to start. I know we just talked about Tom wheelwright who’s a friend of us both and I know he talks about traveling around with you all the time you know educating people around the world what are you doing right now in this predicament? How are you guys adapting? Are you still you know trying to get out there somehow?

Robert: Ironically I’m busier now than ever before. Social media it’s really the best for a guy like you know us because we can reach more people, less effort and time. I was always on an airplane you know two days out two days back that’s a week for what I can do in an hour now.

Buck: Yeah absolutely it’s so scalable right everything is so scalable. But you know so I want to you know kind of get to some topics that I think people would really love to hear you about. There is obviously there is this health-related thing going on called Covid 19 there’s this pandemic what I’d like to hear about and I think what is kind of your take on the economic side of that. We already have seen depression level unemployment, lots of small businesses have been destroyed they’re never coming back regardless of some of these guys saying there’s going to be a v-shaped recovery. What happens next?

Robert: Well because you know Forbes magazine did an article about 600 doctors who talked about what they see as a ripple effect of you know sheltering at home, like suicides have gone up, opioid deaths have gone up, domestic violence has gone up. And for a guy like me who’s not a doctor, what I’ve been saying is I think it’s fake. Now I say that although I don’t know what I’m talking about, but the reason I do that is because I want people to know where I’m at so they know where they’re at if you know what I mean. And the other thing too is if I’ll say, if I’m politically incorrect not PC, at least I suspect I have a little bit more credibility what I do talk about things I do know. So I know I could say well you should shelter at home, you should wear a mask, you should wash your hands, but it wouldn’t be truthful on my part, but I think it’s fake that’s what I’d say, from a macroeconomic side, not a medical side.

Buck: Right so fake in the sense that there’s an overreaction or fake in the sense of you know the whole thing sort of fabricated.

Robert: I wrote Rich Dad Poor Dad about 25 years ago now because I could see this crisis coming. I did a book called Rich Dad’s Prophecy started in 1999. I said maybe three crashes. The first one came in 1999 with the Thai Baht crash or dot-com crash which was followed by the subprime crash of 2008. And I’m on you can go to Rich Dad and see the clip with me a Wolf Blitzer calling the crash of Lehman Brothers in January 2008 and it came in September 2008. Well I also said that the third crash would take place in 2016, and the reason it didn’t happen in 2016 goes in 1999 when I started writing the book, I didn’t foresee quantitative easing which was counterfeit money and I didn’t see zero interest rate policies and I didn’t realize how desperate the Fed would get. So the biggest stock market crash in history that I said would come in 2016 showed up in March of 2020 and March of 2020 was the biggest crash in world history except nobody heard about it simply because everybody’s sheltering at home worried about coronavirus and all this stuff. So that’s why I say it’s kind of fake. The last thing is this in September 2019 a lot of things happened in September. There was a crash in the shadow banking system, and the shadow banking system is commercial paper credit default swaps and all the exotics but that’s where the big banks bank. So the crash was taken below Main Street meanwhile Main Street in September 2019 stock market’s up everybody’s happy, unemployment’s down everybody’s happy, Trump is president says this is the best economy possible, yet in September 2019 the ground below our feet was crumbling. So when Wuhan appeared in December of 2019 it smells fishy to me. It’s a cover-up, a distraction you know just remember that not too long ago there’s rioting in Hong Kong, there was rioting in Paris, there was rioting in Santiago, Chile then all of a sudden now you have to social distance. You know now they tear your site off of yYoutube which is First Amendment also you can’t say anything against the coronavirus because they take you off there. Like those two doctors in California said there’s nothing happening and they got taken off the air. You know Robert Kennedy jr. he gets delisted because he speaks out against the vaccines. So this is war in America, yeah either you think it’s real or you think it’s fake. And guys like Bill Gates who nobody trusts wants to have a vaccine for everybody now. I don’t want to be vaccinated. I’m not against the vaccine I’m against my freedom being taken away. I get tested every other week, I’m target market disease, I’ve had pneumonia, diebetic, everything. I test twice a week and still nothing.

Buck: Yeah you know actually it’s funny you know I remember just before everybody realized what this thing was that was out there you know our friend Tom Wheelwright was in the hospital with pneumonia. And now I was talking to Tom he’s convinced maybe he did have it after all even though they tested negative but yeah who knows you know who knows who’s had it. But you know what’s striking to me Robert is despite you know going back to the economic side, and you know I’m not a stock guy and obviously you’re not, but I can’t help but notice the general resilience of the Dow through all of this, really it’s just like this massive hit to the system and maybe there’s a you know 12 to 14 percent dip in the Dow which just doesn’t seem to be congruent with the realities on the ground. Do you agree with that and if so why do you think that is the case?

Robert: Oh that’s what I said smells fishy to me. The biggest crash of world history is March 2020 and nobody talks about it. It dropped so much, it dropped more in three weeks and it usually takes three months to drop so much and bounced right back and so all of this stimulus I think and I could be wrong, it’s just to provide cover for people to exit the stock market before the real crash hits because I don’t think the dominos have followed dominos are just starting to fall, and again this is the shadow banking market not the above Street. So the above street you have mom-and-pop stores you have the banks you have government and you have you know Wall Street. Below the surface is where the damage took place in September 2008, it’s crushed. So they’re bailing that section out so they big corporations raise 560 billion to bail out you know from the Fed to bail out the big corporations meanwhile mom and pops are going bankrupt. So that’s it’s so strange I agree with you.

Buck: Yeah it’s really strange to me because despite the market having dropped as much as it did the recovery makes no sense at all. I guess the only other thing as you mentioned the bailouts and the bailouts in the form of the PPP etc but you also have an unparalleled situation with the Fed buying junk bond ETFs right, so does that almost delegitimize the entire market? I mean it’s like picking winners and losers.

Robert: Right. And buying junk bonds supposedly go against the Fed mandate. But they don’t call them Junk Bonds, they’re called high-yield corporate bonds. Anyway, it’s such BS. That’s why I like my gold silver and I’m just trying to buy Bitcoin now I don’t trust my government.

Buck: So where does this leave us do you think though? I mean now you know after this you know you have alluded to something that I’ve kind of been talking about on my show which is you know the immediate impact of Covid 19 that you know the economic impact of that to me it reminds me of an earthquake a big earthquake hitting, like in Fukushima right? But what really destroyed everybody was that tsunami that followed. That big you know unexpected nuclear reactor going down and everything else and I feel like we haven’t been hit by that yet.

Robert: I tend to agree with you the dominoes have just started to fall I mean could you admit you know those every cruise ship like we’re on with the real estate guys that’s a floating mortgage, you know I mean the Mall of America Minnesota the largest shopping mall in America just defaulted on two payments on a 1.4 billion dollar loan. That’s the shadow banking system. Who’s taking the hit there? And so the Fed is pumping this money here to keep those guys who owned at one point four billion dollar mortgage from committing suicide. Meanwhile Main street’s going bust. You know how can they allow the big blocks like Walmart to stay open but mom-and-pop store must close. There’s something so bizarre it’s not explainable.

Buck: Yeah it is bizarre and you know it’s shifting topics a little bit one of the other evolving stories that I wanted to get your take on is that obviously this virus came from China and we were already kind of butting heads with China and now you know you have this lack of transparency on the part of China regarding this virus and you know whatever control whatever things they knew or didn’t know or where it came from. How do you think these increased tensions with China and broader more broadly sort of the impact of our movement away from globalization is going to impact the US economy.

Robert: Yeah what’s going on you step back you know what I mean and then they say well it’s cause somebody ate an old bat. I don’t know. And there was a guy predicted in 1981 a pandemic will come on over one in 2020. I got the guys name but you can look it up. So everything looks like you couldn’t plan this out better. Wuhan, 2020 pandemic erupts you know all that but look at this here and so in America, the stats show that the more people most affected come from poor inner-city you know lack of a better word low-income housing or ghetto, the minorities with poor diets very low access to health care overweight old you know I mean all the stuff that you guys as medical doctors warned against that’s who are getting it. Now in Japan, 50% now they have less than one-thousandth of 1% now is it because the gut by not telling the Japanese with them Japanese but how much is this cultural? How much is their personal hygiene habits, sanitation you know they live in crowded cities, they smoke but they don’t have the least case and their economy is a mess. The Japanese economy is what two hundred forty percent debt to GDP but they’re healthy despite of being smokers and living in ghettos like the US. How much of it is because it’s cultural personal habits personal hygiene stress all those things you know.

Buck: You know what’s interesting is there’s a tendency obviously in the media to take the extreme cases you know the totally healthy thirty year old who dies of Covid 19. But my friends who are working a nice use in emergency rooms etc they all tell me the same thing everybody looks the same. They’re all obese, they’re all diabetics and if you look at the numbers that overwhelmingly those numbers are much higher in African Americans and Latinos who are getting hammered by this. So there’s probably a lot more trends than we’re you know necessarily being told about at least from the anecdotes from my friends.

Robert: Well let me ask you this question you know I mean John Glenn’s wife is 100 years all mm-hmm it caused a corona I’m going but what about a hundred years old okay right, my doctor says this guy comes in is hit by a car naturally it’s a coronavirus, no, he was hit by a fucking car. And I hear about people who are afraid to go in they’re afraid of getting Covid.

Buck: Yeah no it’s absolutely true I mean the yards are empty it’s like nobody’s all of a sudden nobody’s having heart attacks and strokes anymore. Tell me, are you worried about inflation this is something that you know you hear about a lot right and with the now what are we up to seven trillion dollar in the Fed’s balance sheet is this a is this something that you’re worried about right now in the future or is it not something be worried about something to embrace and say hey let’s take it for a ride.

Robert: Like I said in Rich Dad’s Prophecy and the real reason for the prophecy was in this book here Who Stole My Pension and I’ve written it my co-author is an SEC it attorney who talks about how Wall Street was siphoning out all the money from you know teachers firefighters police officers UPS drivers you know, I was supposed to be a pilot for United Airlines but I came back yet now thank God I good because the pilots in Vietnam lost all their pension was stolen and so that’s gonna be I think the big story as soon as Wuhan kind of dies down a bit is the millions of baby boomers there will be 10,000 a day 2 billion across the world find out they can’t retire. So at once as long as they are productive taxpaying citizens they’re an asset, but the moment they retire they become a liability to the government. So I think pensions are gonna be the big one coming up after this because it’s so visceral with the old guys my generation big boomer generation well the time as you know I well know Social Security what negative and Medicare is through the roof. So I think our powers have just begun. So do I worry about inflation well it’s either inflation or hyperinflation you know because the Fed will print. If they’re not going to print out it’s going to be suicide. They’re not afraid of inflation they’re afraid of depression. So they print to keep it fake as long as they can.

Buck: You know one of the things I’m curious about, another common friend of ours Duncan. He was on your podcast recently and I remember him talking about the the the reason for us not having a significant amount of inflation after you know the last several rounds of QE having a lot to do with the fact that we are essentially exporting our inflation to other countries, which i think is it really for me it was an interesting concept that I hadn’t thought about. That’s where I kind of look at what we’re doing with China and that’s what worries me is it makes me think like we don’t think maybe that inflation is as big of an issue because it didn’t hit us with these several rounds of QE in 2008. But now if we have all of this additional you know Fed printing money along with you know this deglobalisation, that could be sort of the confluence of stuff that could really, really make inflation take out for the course the next few years do you have any thoughts on that?

Robert: Well we have a lot of inflation, the stock market, the real estate, bond market. So look at homelessness, a lot of the homeless cuz I have friends in Hawaii commercial real estate and at night these cars pull in to the parking lots. So that they’re homeless but they have jobs and they have the choice is the car or a house they choose a car because they can sleep in the car and drive to work because the public transit is not good. When you look at all the ripple effects, I think we see hyperinflation in the stock market bond market real estate market. We also see it in education you know because of student loan debt you know people today I live in other credit cards you know cuz $1200 about barely covers what they need. So anyway we haven’t seen anything yet and you know the only question I ask people let’s say well the Fed print or not print? Well they sort of buy you know a high-yield debt ie junk bonds.

Buck: In terms of actionable information for investors, you know you and I both kind of just talked a little bit about how we agree this idea of the tsunami coming along the way. It seems to me that a lot of the smart real estate guys out there like Ken McElroy, Dave Steele, they’re waiting to see you know what happens anticipating some defaults some distress in the real estate markets. When do you think that I mean in terms of timing right how long does that take and how will we know when we’re there in terms of buying?

Robert: The dominoes are only now starting to fall, like Neiman just went bankrupt, the Mall of America just missed two mortgage payments. Every steamships not pay every airlines not paying so then you have pilots ground crew all those guys out. So it hasn’t hit yet. So I’m trying to say it’s yeah you know if somebody has a thousand dollars in savings that’s actually after-tax dollars so once those are gone they’re gonna have to or in the forty percent bracket they’re gonna have get 1,400 bucks to recoup together thousand dollars back. So I don’t think we see that I think it’s just a lack it’s gonna hit just like there was there an earthquake in Indonesia we set up a tidal wave in Japan which hit the nuclear reactor in Japan, we haven’t seen it yet.

Buck: I remember having a conversation with you a few years ago on the Real Estate Guys Cruise, and I remember this was 2017 all the speakers seemed to be oddly enough agreeing with each other. We had Peter Schiff agreeing with the chief economist from Fannie Mae and it just seemed like we were in the twilight zone or something and when I asked you about what you thought about this about the speakers you said something we I thought was really interesting which was it worried you that everyone seemed to be agreeing with one another and what were we missing? So I have to ask you now I mean what worries you most about post-Covid America what do you think we’re missing that a lot of people are not thinking about?

Robert: I think it’s never going to be the same but the same is right I’m concerned that they’ll have to keep printing money to keep social unrest down you know the Fed is really a socialist organization, it’s not really capitalist. But you know with Bernie Sanders they’re waiting and all that they’re gonna start paying people not to work with which is UBI. I think what worries me is we see the end of the American Empire that might be a good thing at the same time you know China is building the road and Belt project you know which is it’s basically their way of connecting the world by a railroad and one method yes transportation then they have the polar Silk Route they have the ocean Silk Route and they have the regular Silk Road. So China is being more proactive than America is and I’ve seen I travel the world I see those guys everywhere yeah I was in Zimbabwe and they’re in there buying everything they could and they built a whole campus just for their guys to take Zimbabwe and so it’s walking along this road in Zimbabwe that the Chinese trenching machines. So we send in the military Chinese sons and trenching machines to lay down the optic cable for your fiber basically. So they’re building infrastructure. We sell weapons, that’s one thing for a former Marine and if the haven’t we learned yet yeah why tell we should we should be building but now with a boom of the desert all day long.

Buck: So let me let me ask you that bug the latest work that you have. You just showed me a book actually. I have to admit I didn’t know about the who stole my pension book I thought Fake was the last book. Tell us a little bit about well if you want to tell us first about Fake and then Who Stole My Pension. Who is that for, just for people with a pension so it’s not you know is it mostly for people who’ve got a pension?

Robert: Well it’s for anybody who hopes on retiring. There’s two kinds of pensions there’s police firefighters police thought you know teachers have then you have to find contribution the rest of us have us a 401k or IRA. As I’m saying the next thing is gonna be the pensions because they’ve been robbed like you know like I said my co-author and this is an SCC attorneys a whistleblower I think you put 74 million is pocket last year blind it whistle of Wall Street honey i ripping people off so what how does it affect me well you know you have friends and relatives right now who may become your new houseguest because I know a lot of people they have friends and family with nothing, your sister your brother your kids their kids. Pensions are gone is what I’m saying.

Buck: Yeah well it’s just so remarkable to me that people have such blind faith not only in you know things like pensions but even the market right I mean you’ve got despite all of the things in the system right now that should be scaring people to death in the stock market, people think that the market just goes up no matter what, forgetting that you know it took what 20 25 years from the Great Depression to recover from that and you know if you’re already ready to retire now you want to wait another 20 25 years. That’s a little bit of a rough go. So anyway listen Robert I don’t want to take up too much your time and again I want to you know mention your latest book Who Stole My Pension there was also Fake before that just a series of fantastic books. The one that changed my life personally was the Cashflow Quadrant I think that probably is the one that if you’ve not read Robert’s books, Rich Dad Poor Dad is phenomenal but I think for people like us who are high paid professionals who are trying to you know understand this other world that no one revealed to us in school that’s Cashflow Quadrant for me. But again I want to thank you for being on Wealth Formula Podcast and again, I hate to sound like I’m blowing air but you know the reality is that you know you’re a catalyst for so many people and so many people’s success and I hope you hear that from everybody because you should and you know thank you for everything you do.

Robert: Thank you because that’s what we do it for. Anyway thank you and you know it’s amazing what YouTube has done or all the social media has done. More opportunity now their ever before. Thank you.

Buck: We’ll be right back.