How to Secure Your Wealth During a Crisis - Robert Kiyosaki, Kim Kiyosaki, @Wealthion

this is the Rich Dad radio show the good news and bad news about money here's Robert Kiyosaki hello hello Robert Kiyosaki this Chad radio show the good news and bad news about money today we have very special guests a long time friend Adam Taggart and we're gonna he's gonna be speaking to us on a subject called bonds now Bonds in theory are a very simple subject but I've never understood them and the reason I wanted to have Adam on for bonds is simply because you know like that my friend Harry Dent you know he's always saying buy treasury bills but I'm concerned you know if what I think is about to happen is going to happen which is the demise of the US dollar the hegemony of it and his power and his reserve status if the dollar U.S dollar goes bad and Fiat currencies go bad what happens to bonds so that's why we have Adam Taggart and he's on his incredible program Wealthy on I subscribe to the company subscribes to it and what Adam does on his program he takes extremely complex subjects and his commentary dumbs it down for people like me and what Rich Dad does we take those ideas and we dump it down further so everybody can understand any comments oh you just you just said what I was going to say so I was just going to say that well it was called wealthian.com and yeah we've watched the videos that the company studies the videos that you that you put on there Adam it is incredible information and as I was saying before we started I have to hit rewind probably like 25 times because some of this stuff is so over my head but um to to your point Robert about the US dollar we've been studying that and what's going to happen with the US dollar and is it it's not going to be the world Reserve currency and what does that mean and so we have a lot to talk about and the question is how safe are bonds because I have a friend I mean he has not a million he has hundreds of millions in bonds and uh yesterday I went and bought some more silver and hit him in my secret Mountain vault um but he says Ah he won't touch silver he says U.S Treasures are it so with that question when he's got hundreds of millions stashed in U.S treasury she sounded like Harry Dent so to clarify all this we brought out Adam Taggart and he and his former partner Chris Martinson uh they talked about um not the dollar milkshake Theory which was Brent Johnson but they talked about the eye dropper of water and a football stadium so I think that's a very good metaphor the eye dropper of water eye drop of water and an entire football stadium because I think that I the last eye drop is about to hit because as football stadiums almost filled up So Adam welcome to the Rich Dad welcome Adam hey it is a pleasure to be here it's so great to see you guys again it's been way too long since we last saw each other uh in person let alone virtually and I do just want to say it's such an honor to hear that that you guys in the Rich Dad organization uh watch any of these Wealthy on videos um and and I just want to give the compliment right back to you guys which is you guys were a massive inspiration for me in starting that platform so um in many ways it's just CG planted you know the Harvest returning back to you guys so thank you well thank you fabulous you take the ultra complex and simplify it or clarify should I say not simple but clarify it well thank you I mean really the whole reason why I started Wealthy on was to try to give the the average person the little guy access to what the experts are thinking and the decision makers on Wall Street are are thinking uh and of course those guys tend to speak in their own particular type of jargon and so really I just sort of see my role as as really just trying to be sort of like the decoder ring that takes the complex words we're saying and putting it into terms that hopefully the rest of us can understand yeah so so would you explain that I drop in the football stadium because it seems like we're very close to that sure sure and for folks that don't know the eye drop in stadium reference um it's real this is really about the power of exponential growth and a lot of the trends that are sort of driving the world we live in at large are exponential and the human mind doesn't do a really good job of understanding exponentials and that's why uh my former partner Chris Martinson uh came up with this analogy about the Magic Eye dropper in the stadium and so basically he says look pick the stadium of your choice um we usually use Yankee Stadium because we we both were from New England and we're Boston Red Sox fans so if we're going to destroy a stadium so imagine somebody takes a Magic Eye dropper and walks down to the pitcher's mound and squeezes out a single drop of water right there on the pitcher's mound and that drop of water doubles in volume every minute so minute one it's it's one drop in size minute two it's two drops in size minute three it's four drops in size minute four it's eight drops in size right so the question is is if you got handcuffed to the the top most bleacher seat in the stadium how long would you have to escape your handcuffs before the stadium was underwater and you know most people will say I don't know a year you know months uh the answer is very surprising uh the answer is 45 minutes much less time than you think and that's just because when it doubles each doubling is is bigger than all the increases that came before it but the really important question is is at what point uh is the the uh the park only three percent filled so like the infield is just covered in like a foot of water and you can now begin to see oh this thing is starting to fill up um what time does that happen and that happens at uh minute like 40. so basically by the time you see there's a problem the Stadium's filled just a couple of minutes later right by the time you see the issue it's way too late to avoid it your only choices at this point in time are just to sort of manage the impact and so um I think that's very much what you guys are are picking up here where it feels like we're that far along in a lot of these exponential trends that if you're sitting there hoping oh well maybe somebody's going to come up with a solution and we can avoid this problem that I'm seeing in a lot of cases that's that's not going to happen and you're really just wasting precious time with false hope what you should be doing is saying okay it looks like this is going to happen I need to figure out how I'm going to reduce my vulnerability to its full force arrival that's the right way to use the time we have left here and what what minute would you say we're at well it sort of depends you know what you're talking about are you talking about the the functioning of our financial system are you talking about the US dollar as a reserve currency are you talking about uh just our ability to afford our basic way of living you know I mean that right now I think is getting pretty late in the game especially if you live in you know parts of the world that are really suffering right now under just crushing inflation I mean I don't think anybody in Europe for example could have ever forecasted a year ago that they would be paying what they're paying right now for energy yeah yeah so when you look up a lot of times in America can't see because we're a goldfish Bowl everybody looks in that we don't see out I'm looking at what happened in Sri Lanka what's happening in Brazil what's happening in England what's going to happen in Germany uh with the but we can't see it as Americans I think the Goldfish ball is a great analogy too because goldfish really have like incredibly short-term memories we just so do we so I'm I'm sitting here watching all this and so that's why I keep thinking of the eye drop Theory you know I said when pictures mountain is covered and I'm sitting in the top Glacier how much time have I got yeah so uh again it really depends and I'm glad you mentioned Brent Johnson's dollar milkshake Theory because I'm gonna I'm gonna bring that into play here in just a second um real quick though um you're right to be looking outside because collapse happens from the outside in right it's the weaker players that fall first and then those are dominoes that topple over bigger dominoes and then it all begins to progress toward the center and and yes we live here in our Fishbowl our goldfish Bowl here in the U.S we do have a lot of advantages that a lot of other countries don't have and so we're likely not going to be the first one to fall we're probably likely going to be the last one um but to find out where we are in the story we want to look out at the periphery and see how it's doing and as you just said Robert The Very extreme ends of the periphery are not doing well at all right you've got a place like Sri Lanka that's basically you know gone into full collapse right you know I don't know if you saw the videos of the people it's a few months ago storming the presidential Palace you you got to remember um uh like we saw a preview of this happen during the Arab Spring right um it was sort of put off in the media as oh look this is democracy in action these are people that are rising up against you know dictators and whatnot that really wasn't the primary motivation for the Arab Spring it was that they experienced um sudden and extreme inflation in those countries and all of a sudden people couldn't feed their families or keep them warm and when you get to that point you really don't have any other option but to throw out who has whoever's in power because whatever they're doing just isn't working for you right you're beginning to drown uh and so that's what happened in Sri Lanka and uh you know that's beginning to happen with greater frequency elsewhere in the world and in Europe isn't in that case yet but it's certainly a lot closer that destination sadly than it was a year ago and that's I I don't know if you had the chance to call Miss Andy scheckman he was Miles Franklin he's one of the most accurate gold guy I've ever I mean his macro of the world is precise but he was talking about on uh September no in 2019 when Biden is bad in Afghanistan the next day Saudi Arabia went to talk to China and Russia and he was this is 2019 and just a couple of days ago Saudi Arabia switched from the Petro dollar to go shifting to a gold-back Yuan and nobody even notices that so Saudi Arabia joined forces with Russia China Brazil India South Africa so uh I don't have a chance to talk to Andy he is his forecasts are so precise Adam and I think too some people don't understand um when Kissinger cut the deal with Saudi Arabia and said the Petro dog said we will protect you militarily and in exchange you're going to sell your oil in US Dollars which has propped up the US dollar and now when we pulled out of Afghanistan Saudi Arabia goes hmm maybe I can't trust you to protect us because you didn't protect them well that ends uh when uh Russia invaded Ukraine um basically the U.S weaponized uh the financial system against Russia and a lot of other countries looked at that you know like basically like seizing Russia's assets that were held abroad and whatnot and a lot of countries looked at that and said whoa like I'm in the u.s's good graces right now but I might not always be exactly and they could do that to me so you know what we've done in the response to uh the war in Ukraine um whatever you think about it um uh we have basically provided a pretty strong incentive for many countries to accelerate their plans to de-dollarize and that's exactly what you're just talking about what the the steps that Saudi Arabia took there uh and I have not talked to Andy yet though I appreciate you you putting us in contact Robert um so I can't talk really authoritatively about that that last statement about them switching to you know some sort of potentially gold back you you one thing but I certainly have heard a lot of commentary recently about the brics countries um working on a commodity-backed currency to to rival the dollar and probably going to be priced in Gold grams and whatnot um you know we can we can debate there's two more things that happened yeah the Nordstrom pipeline was bombed yep I mean was that an accident that just happened to blow up and the other thing that happened the reason you're on today is because when uh who's the new prime or the future X Prime Minister of England tried to raise tried to what is she trying to do who's trust yeah who's already out yeah yeah she's gone the shortest term prime minister in history but because she raised interest rate as whatever she did or unless she tried to cut and all this stuff the whole bond market nearly came apart their pensions came apart and then they had to bring a new prime minister in already so all of this is happening and Americans are wondering well who's going to win the midterm you know well that is important yeah great point which is um kind of back to our Stadium like where are we on the big picture of where things are headed we are beginning to see you know as as things as you go along in exponential curve things happen faster and faster right and so we're beginning to see more of these really big things that we just really couldn't have ever expected would happen right um oh the Saudis or maybe you know beginning to to reject the Petro dollar oh uh you know uh England's bond market almost blew up and to your point Robert you know somebody just sabotaged the Nordstrom pipeline I don't think it's it's I I don't think anybody debates that this was an act of sabotage now you can talk you know a lot of people are saying pointing fingers in different directions um but uh you know we're seeing more of these things that nobody could have seen coming or these sort of black swans and and of course the more they are and the faster they happen the more the odds of something really systemic breaking and something really bad happening obviously increases but but a big part here is they want to destroy the hegemony of the US dollar which came in place in 1944 with Britain Woods the dollar became the gold standard of the world or the reserve currency of the world and then 781 Nixon took us off the gold standard and we went from being a capitalist state to a credit state so everything is floating on debt right now correct I think bonds are debt also and so when Harry Dent is yelling about you should buy U.S treasury someone said but I think they're going to torpedo the U.S treasury and that's how he called you Adam is because what the hell is a bond I mean how safe is it uh what how safe that was 2019 the repo Market blew up again the last time that blew up was 2008. and what the reason the repo Market is important is like repossession do you know how valuable is the asset that you think is an asset are they going to come and repo your dollar or would they rather repo your refrigerator I mean what has more value today so 2019 that's what blew up also again how valuable is a bond so so let's let's start with explaining what bonds are and then let then we'll get into um are they a good place to be now or not because the answer is um you know it's a it's a little bit nuanced and it's a sense of like um something that might have a long that might not be something good to be in in the long term might be something good to be in in the near term and I can I can explain why a little bit later in the conversation but let's start with sort of what is a bond right um let me contrast it with with what's an equity or a stock because I think people understand that really easily right a stock is basically just a share of ownership in something right I can go buy a share of Apple it's clear I don't own all of Apple Corporation but I own you know some I don't know how many shares Apple has outstanding but let's assume it's 100 million I have a I have a hundred millionth claim in terms of the the earnings that that uh Apple owns and in the assets that it has right I'm a part-time shareholder or fractional shareholder in this company um a bond is not ownership um a bond is an IOU essentially um where you you give your money to somebody and they say okay I'm going to pay you back um but for the risk that you're taking by giving me your money I'm going to pay you some interest as well along the way so it's basically just a contract and it's just math um bonds bonds tend to be uh a little bit easier to deal with because when you're when you're dealing with a stock you have to take into account all sorts of things okay what's the potential of this company to earn money over time and and what do I discount those earning streams back at and what's their competition doing and maybe they're gonna take over their category or maybe are they going to be out competed bonds it's really just much more okay what's what's the math of this contract I've entered into you with you um and then you have to factor in a little bit of default risk right which is okay what's the likelihood this person's actually going to be able to deliver on on what they're telling me they're going to do right so uh if you are borrowing from the U.S treasury that is considered and we can debate this in a minute but that's considered to be basically about the safest type of debt that you can take on and and one of the reasons why it's so safe is first the US is the biggest most stable player out there on a relative basis but also we have a printing press you know so if we really get in trouble uh the Federal Reserve can basically print up to money to give to the treasury to make sure that they pay you back so you know you're going to get paid back at least nominally meaning if I give you a hundred dollars it's high likelihood you're going to give me a hundred dollars back now if they had to print those hundred dollars to pay me back back then maybe those hundred dollars are devalued a bit by inflation but again borrowing from the U.S treasury relative basis pretty darn safe borrowing from um a company that's got uh what's called a high yield debt which is sort of the fancy way to say junk debt this is a company that maybe isn't profitable maybe already has a lot of debt on its balance sheet its prospects don't look very good um first off that debt is going to come with a you're going to demand a higher yield to borrow that debt right or if they were divide to buy that debt because you you don't trust their ability to pay you back as much um and so that's you know that's that's a riskier debt so there's sort of a spectrum of bonds that are out there those that are considered to be very safe are those that are considered to be very speculative and basically it's it's the yield on the bonds uh that that differ between the two a more speculative Bond should likely offer you a higher yield because that's making up for the higher risk so so yes so a longer atom so a longer term bond Government Bond usually would have a higher yield than a short-term Bond correct great question it usually should uh it doesn't right now in the U.S treasury market yes so can you talk about that for just a minute sure you you may hear on the news people talk about an inverted yield curve yes and that is exactly what you just discussed there Kim which is shorter term bond yields are higher than longer term bond yields and first you would expect higher term bond yields to be higher um to compensate you for the risk of getting paid back over a longer period of time right if if I give you uh if if you borrowed money from me and we're going to give it back to me tomorrow well my duration risk is pretty low right I'm going to get it back tomorrow I'm not going to charge you all that much to borrow it overnight if you want to borrow it for 30 years I'm going to say yeah Kim you're going to have to pay me more money because I'm I'm basically giving you my money for a much longer period of time when people get or when the bond market gets nervous about where things are headed and it thinks that something bad might happen in the relatively near term that then pushes up those short-term interest rates and so it's basically the bond market telling you you know I think in 30 years things are going to be back to normal I think we're going to be okay in the long run but I think we're going to have some rough times in the very near future and that's why I'm going to demand a higher interest rate in the short term yeah so let me give you a really simple so you have a five-year Bond let's say yeah and you're getting paid five percent whereas a long-term bond is paying one percent that's an inversion because it should be other way the longer term bond should be paying five percent but short term is paying one percent that's that's when the higher math kills me at that point exactly that would be an extreme example but anyway the shorter term bonds should be less interest but today the shorter term bonds are higher interest than the long-term bonds and that's the inversion right and and there are probably many factors for that that inversion but um the two two important things about it one an inverted yield curve is one of the most Dependable signals we have of approaching recession right so um you know if you see an inverted Europe curve like you have to we have today you should say all right look I gotta I gotta get prepared that we may be entering a pretty you know material recession in the not too distant future because whenever we've seen this before it's happened right um and and right now as you guys know well uh we've got a big inflation problem around the world but certainly in this country um most central banks definitely the FED uh are hiking rates right now to get inflation under control now we have an economy that has gotten extremely used to some would say addicted to or dependent on ultra low interest rates that the FED brought them down to you know zero at that period of time it kept them really low lower than they've been in some cases in recorded history um and the system habituated to that so now that rates are rising um they're Rising pretty dramatically right we've gone from near zero now we're around three percent we're going higher the FED is highly likely to hike another 75 basis points at their next meeting and is talking about going even higher still and we've we've raised rates faster than we ever have in the data Series so think about um the way I like to help people understand this is let's say I gave you Robert a gallon of water and I told you you had a week to drink it you'd have no problem with that right but let's say I just shoved it up against your face and I just forced it down your throat all at once you might actually choke and drown right same amount of water but it's the rate of change that's that's the different point there right so we have we're shocking the economy right now by bringing rates up to a point uh where uh the economy is not used to rates being this High may actually not be able to function that rates this high and we've done it in such a fast period of time that it's literally like shocking the financial system here before we go to about to go to a break I'll keep it really simple because that's we dump it down even further sure so what has happened is that as interest rates kept coming down because they wanted people to borrow and stimulate the economy our debt went this way yeah so when as interest rates came down we the FED borrowed I mean I really borrowed but printed more money and our national debt owed by the taxpayers kept going this way but the moment they raised interest rate that debt is going to kill us because it's too expensive exactly the The Debt Service payments all of a sudden become a lot more burdensome and who pays that our taxes to do I mean who pays who pays the debt of the U.S taxpayer so Mom and Pop get screwed again because they use that cash the low interest rates to bail out the banks and that were in trouble in 2008 you know the same says all this is going up and down and that's how I'm going this is a little too tough for me because I have a simple little brain here and and you know what and the question is because interest rates are going up prices of gold and silver come down because everybody wants a higher interest rates than gold and silver will pay you know so this whole thing just gyrates the entire world so that's why you're here so now that we're totally confused everybody with a dollar milkshake Theory an eye dropper and interest rates coming down and inversion yield curves going up we'll come right back and hopefully we'll untangle this can of worms so we come back and thank you thank you this is a very uh confusing show for me thank you we'll be right back [Music] the money printing is out of control the FED already crashed the stock market and now they're coming for everything else take real 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is if you listen to it two or three times it might make sense to you but more importantly have family members friends or business associates please listen to this program one or two times and then discuss it because that's how you get smarter because a subject we're studying today is in theory a very simple subject you know to me a bond is capital I get I make I make a I make a thousand dollars I spend 800 I got 200 left I take that 200 and now what where can I put it so if I if I buy a bond I can do that I can buy some chewing gum with it what I want but I never had any money to buy a bond anyway when I was in elementary school to have to buy U.S savings bonds I think they're 18.75 and after 10 years I got 25 bucks it just didn't stimulate me you know what I'm saying 1875 to 25 bucks and my poor dad kept saying it's a good deal and my rich dad says you're being screwed you know because of inflation so I was totally messed up by the time I was 10 years old and so they were going to mess your mind up even more because we have Adam taggard on and it's a very simple subject calls a bond if you had a thousand dollars where would you put that money would you put it in bonds would you trust it to the government does corporate bonds there's private bonds there's so many different types of bonds Muni bonds and this whole program started because my best friend who just sold this business for two billion dollars and walked away with a lot of cash in this pocket he's a hundred percent in bonds I'm going but what happens if the dollar goes bad no it'll be here forever you'll be here he buys Muni buns so I called Adam tag her it up and I said what the hell is a munipot now you know I'm going I am so totally messed up and it's a very simple thing you got two hundred dollars or two thousand dollars where do you put your money and a lot of people put their money into bonds and then uh I was my friend uh uh Harry Dent Harry Dent swears by U.S bonds and I like gold and silver and Bitcoin so this this is where do you put your money but what is the bond market signaling so that so that's why we have Adam Taggart founder of wealthyon.com fantastic program because he demystifies a lot of things that most people go right over their head you know and I was just saying at our break that um Adam you described the inverted yield curve of bonds more simply than anybody else and so can you just touch on that again because it's a it's a huge signal when that yield curve gets inverted meaning meaning the rates are higher in the short term for bonds than the interest rates in the long-term bonds what it could just quick summary absolutely yeah so the conventional standard pricing of of the bond market basically kind of gets stood on its head which is you would normally expect uh higher yields to be charged for longer duration debt but instead it's the shorter term debt that is charging the higher yield uh and and the reason for that is as we mentioned is it's basically the bond market telling you that it's nervous about the short term and as we were finishing the last segment before the break I was talking about how fast the FED has been hiking interest rates and essentially what the inverted yield curve is telling us is that it agrees with the people who say that you know what the fed's going to keep hiking rates until quote unquote something breaks and the inverted yield curve is the the bond market saying yeah I agree I think something's going to break in the near future and that's why I'm charging higher rates on the demanding higher yields for the shorter term debt um so uh what that tells us is okay hey we should all be you know a little bit more cautious a little bit more defensive right now that uh you know a we may be going into a recession because an inverted yield curve is one of the most Dependable signals we have of recession and then we should just be saying hey If the Fed if if if the FED breaks something well what's likely to happen right um and this Robert is where we get into our bonds a good place to be or not and and it gets a little complicated but I'm going to try to keep it really simple um and this is probably why your friend Harry Dent really likes U.S treasury bonds right now so there are a lot of people like municipal bonds I I personally find it hard to make a great case for for beauty bonds right now and and of course I'm making a blanket statement just like with stocks you know not all stocks are created equal I'm sure there are some great Beauty bonds out there right now uh but there are a lot of risks going on um that I think uh you know that you take on as a municipal Bond investor um that given the current macro environment I'm not too excited about and I can get into that a little bit more detail and Adam just real quick a municipal bond is just quick yeah I'm so great great question so um uh let me just contrast it to a U.S treasury bond in a corporate bond so U.S treasury bond is basically you're just borrowing from the government right and that's how the government finances how things work right so they agree to pay you back under certain schedule with a certain interest rate great and your risk there is really the The Sovereign risk will this country be in business long enough to pay me back a government government borrows money from you that's a bond that's a bond yep exactly that's the U.S treasury or whatever they call them then there are corporate bonds which is basically where a company is doing the same thing right so to borrow your money yeah borrowing your money agreeing to pay you back on a certain schedule and in most cases you're going to demand a higher uh interest rate or rate of return on a corporate bond than you will a government because it's much more likely the US government is going to be around than random company X now a municipal bond is a is a local government that's borrowing from you this is oftentimes how you know Bridges get built and you know policemen get paid and you know things like that is uh the local municipality borrows from you and agrees to pay you back on a certain schedule but you have all sorts of additional risks that go on there you've got um you know the risks of of what happens in that locality um if we have a national recession is this a area that's going to get hit worse or less by you know what's going on are people moving in or out of this place are they going to raise taxes or lower taxes there's all sorts of other risk factors that can go on there right and met me through and a curveball I think he likes muting bonds because he says they're tax-free or something uh so you can get tax uh benefits from them yes but you know all bonds are just Muni bonds uh depends it depends um not from corporate bonds uh a lot of U.S government bonds are exempt from state and local taxes but not from federal taxes a lot of immunity bonds are kind of the other way around um so uh you know it so your mileage varies here um and I think just to put a cap on the muni space if you're going to invest in a municipal Bond I would definitely do so under the guidance of somebody who really tracks them and can pick out the wheat from the Chafe for you because there are so many different variables that that go on there and and one of the things we're going to talk about in a minute is this recession risk that the inverted U.S treasury yield curve is warning us about um uh I talked to you for a living on Wealthy on I talked to economists and investors and Market analysts I do it five to six days a week and uh the vast preponderance of them are all pretty concerned about both the depth and the duration of this recession that it looks like we're heading into so you know a lot of people sort of think that okay well you know if we get into a a spot of trouble the Federal Reserves gonna the Federal Reserve is going to Pivot and uh they're gonna do what they did back in 2020 right in 2020 we had a recession but boy it was a very very short-lived one and then we get a ton of stimulus right um as another term pivot means right now they're raising rates the pivot will they'll go back to dropping interest rates again and then print more money exactly that it means that they would reverse their current policies their current policy has been hiking rates and beginning to tighten their balance sheet which basically means they're withdrawing liquidity from the system and this is after a decade plus of keeping interest rates super low and pushing liquidity into the system okay so let me show them one more diagram they dropped interest rates down but debt went up and so when they hike interest rates the price of that debt gets more expensive is that correct that is exactly correct um that's what happened in England well that is what happened so we could have an entire show on kind of the the bad policies that have been pursued that have gotten into us into this huge trouble where we have way too much debt in the system um and it's killing our economic growth prospects um and the problem is is if we keep using the old medicine to try to limp things along we're just making the problems even worse so if we try to you know tighten our belts and and try to you know use austerity to try to you know uh reverse the worst of what we've created we actually start sending the system into shock and it starts threatening to collapse so we don't really have a a a good road to to a good path to go down whichever path we pick here so so there's an increasing instability that comes along with us yeah so I'm going to go back to you and Chris's metaphor analogy of the eyedropper we're at Yankee Stadium and you're noticing that the pitcher's mound is kind of getting covered with water and you're on the top bleach you're saying well how much time do I have right and we know what we're talking about again I don't have much at all yeah exactly because it'll go right so let me let me get to the cut to the chase of what I believe your question is which is how much time do we have right and it really depends on where you are in the story right so so some players have a lot less time than others and I would pause it in age pardon me age or no more just sort of like other countries are going to fail first before we do other countries other currencies are going to fail for us we do yeah so you know if you're looking at at let's look at currencies uh so you know right now the other world major currencies are having a much worse time than the US dollar is right the Japanese yen is basically in free fall right now I think it's lost almost definitely more than 40 of its value over the past year maybe even more right now um the Euro has gotten down to parity below parity even with a dollar the pound has almost gotten the parity it hasn't been there for decades so um we're already seeing other players stumble harder and faster before us and you had talked about the dollar milkshake theory that Brent Johnson mentioned um and I'll try to keep it really simple for folks what it basically says is um uh that as the rest of the world stumbles and they are more likely to stumble first before we do and probably worse than we do that creates uh a global demand for dollars right and that props up the value of the US dollar and that's exactly what we've been seeing this year I just told you how much it's appreciated versus all the other major Fiat currencies one second so that's why gold and silver come down because a dollar keeps getting strong in dollars I mean in U.S dollars yes and what's so interesting about that is but in Yen gold and silver are going up compared to Yen I was going to say yeah if you own any other currency besides dollars your gold has appreciated dramatically in your local currency right it's only in the U.S that it hasn't and that's because the dollar has been so strong this year and that's because of the dollar milkshake Theory so I I I emphasize that because there's a lot of people who ask a lot of the same questions you were asking Robert which is well all right so is you know I heard this thing about Saudi Arabia and we've got all this debt and so is the US dollar just going to become toilet paper overnight basically the dollar milkshakes Theory says look like it or not and Brent Johnson is not a fan of the US dollar like he he thinks there's a lot of problems with it but he just says it is the cleanest shirt in the dirty shirt laundry hamper and we have a lot of advantages still you know some of them fare some of them unfair um that are likely going to prop the dollar up for an awful lot longer than most people imagine he says at some point in time yes there will be a Reckoning with the US dollar like there will be a Reckoning with all Fiat currencies but it is highly likely to be the last Domino to fall and in another part of the dollar milkshake series says in addition to propping up the value of the dollar because there's this Global demand for dollars a lot of foreign capital is going to just find its way into the U.S market anyways because it's going to be seeking stability Safe Haven and return and so that's something that as bad as what might be coming is the U.S capital markets may actually fare pretty well on a relative basis because you just have this flood of outside Capital coming in again not necessarily very fair and for those who have legitimate concerns about the U.S market and the U.S the US dollar and the U.S capital markets uh it doesn't negate them but it basically says in the relatively near to midterm we we may actually be the source of strength I have a question I have a question um you say as long as the US dollar is in high demand what would cause that demand to slow uh that's a great question so um obviously a really big one would be um uh you know if there was a competing currency on the global scale something that that could either remove the US's Reserve currency status or at least give a credible alternative that diminished demand for it one more thing yeah you have dollar milkshake there the eye drop thing but if your eyedropper is filled with Yen or pesos or Euro it's going to come faster than the dollar US dollar I'm saying well absolutely and that's why you have to worry if you live in those countries right right so like if you if you live in Japan you have to be preparing for now now like how much time do you have left you've got an awful lot less time than the folks sitting in a stadium inside the U.S right and that's why I said kind of your where you are really matters in the story in terms of how much time you have left and so and so a competing currency going back to what would slow the demand for the US dollar isn't that what brexit is discussing right now uh it is and I'll tell you um I'm gonna be like Brent Johnson which is you know he he talks about the strength of the dollar even though he doesn't like the dollar right um I I I welcome competing currencies right um I think it just makes the world a you know a more efficient a better place um there's a lot of uh you know a lot of worries that folks have that are Justified around the US dollar and also other different types of Fiat currencies I would love to see competing currencies that are uh backed by some hard asset right and that seems to be you know what's rumored that the the brics nations are working on I remember people brick stands for Brazil Russia India China South Africa and just last week or last week is Saudi Arabia joined the bricks so we put an extra s on there too and people also kind of lump a lot of the you know resource-backed resource exporting developing nations around that so you know kind of roughly a lot of the South American nations and whatnot too that's Nigeria Nigeria is going to join the bricks yeah yeah uh that that I think is the that's the logic here now I I want to caution all this by saying uh you know people have long said oh the the yuan's going to replace the dollar and even earlier this year people were saying well Russia's going to back the ruble with gold and and that's going to start to displace the dollar it's very very hard thing to displace a global work Reserve currency especially one that's as integrated and and deep as the U.S dollar market right now there's just a sizing issue that even if say that Juan wanted to do it tomorrow it would be a long road for an already established major world currency so for something brand new to come out into the the scene uh it's going to take I'm going to say I'm going to guess here but I'm going to say at least a decade if not maybe several to really start stealing substantial demand from from the dollar okay so that's so Adam that's why I recommend you you invite Andy scheckman on board because his insights I think I found them profound like he he was saying that Saudi Arabia joined the brics or Russia China the day after they abandoned um Afghanistan Biden did and also what happened in 2019 the bis the bank of international settlements out of Switzerland the essentials Bank Central Bank daily listed gold as a tier one asset replacing dollars and bonds U.S treasuries so all of this is so macro macro macro we can't see it and so what I'm going to ask you to do is we're going to take a break we're going to ask you let's take off for another 15 minutes to do our best to unscrew our minds but the big Point here the reason I started with your eyedropper and the you know the dollar milkshake theory was basically saying that the U.S doesn't care that the money is in Brazil we're going to suck the money out anyway the U.S there was a book called confessions of an economic Hitman and it said that what we would do is we would lend countries money but they have to pay it back in dollars so right you basically turned them into our debt slaves and that was the purpose of the U.S dollar so all of this stuff I've been reading and the more I read about the more confused I get so that's why you're on this program Andy I'm a very simple U.S marine I buy gold silver and Bitcoin you know I mean I just asked about all I can handle because I don't have to worry about anybody else owning what I own right right and I know we're taking a break here but I do want to score I own all those assets as well so we can talk about that too yeah and we're not recommending them we're just kind of explaining what the hell is going on like I was on uh what's his name oh it's a show and he's he says what do you recommend I recommend tuna fish cans of tuna fish he goes why I said because it takes diesel to catch tuna and he goes what does that mean well the price of deals that goes up the can of tuna is going to go up but the US dollar is going to come down that was Bill O'Reilly he lost it I mean he lost you say invest in tuna fish I said at least you can eat it and you know if Safeway goes on a safe way or Appleton's one of the big supermarkets go broke they can't come after my tuna fish I own it now so I just keep it as simple as possible when I buy a gold coin or a Bitcoin or a U.S uh silver the eagle I own it the mint can't come in well they theoretically can't come and get it from me it's the same as a can of tuna fish Safeway goes bus they can't reclaim my tuna fish anyway we'll come back we're gonna give it 15 more minutes into this subject because it's a macro macro macro subject and remember right what was what Adam was saying if you're living in Japan the eyedropper theory is about to take off record says he calls it the snowflake it's that last snowflake that sets off the Avalanche yeah and so that's uh we're very close to the last Snowflake and the last eyedropper and the question is what's safe we'll be right back with Adam tiger [Music] Welcome Back Robin kiss knock at the that radio show today with a very special guest Adam Taggart he has been a friend for years and years and years and he is programmers called wealthion our company listens to it please subscribe to wealthion because wealthian.com because he takes an ultra complex and dumbs it down and our job is to talk to all of you guys who are dumber than me we're gonna dumb it down even further you know like I said what's safe right now is a can of tuna I got one for 20 cents the other day and there's no counterparty arrest to my can of tuna because if Safeway or Albertsons or whatever goes broke I still own that tuna but if I buy a share of a Safeway stock and Safeway goes down or Albertson goes down my stock has gone too so I think two and a fish are the safest of all Investments today and leading with that Adam we're coming what's safe today Adam yeah what is safe today um I actually love that example and and I think um oh don't encourage him for the big risks that we've been talking about right the the risks of say fiat currency risks right fiatives fake fake fake Fiat is fake government decree money this is money I see because I say it is that's what Fiat means right and back back by nothing right I think um and we know that um when when faced with uh Hey we've created an issue here and we either have to tell the populace that everybody's going to sacrifice and tighten their belts or we could print up more money they're always going to choose more money right um so uh in printing more money that results in inflation we're living basically with you know a a very current in-your-face reminder of how excess uh money Printing and and uh you know large yes from from politicians creates a very painful cost of living problem for people right so so I don't need to convince anybody of that because we're all living through that right now so in both cases to protect against yourself against uh the abuse of currency um and the rising cost of living uh hard assets are I think one of the safest long-term assets that you can invest in right now particularly uh hard assets that create an income stream because most hard asset income streams will adjust along with inflation right so this can be real estate which you guys talk an awful lot about this can be commodity producers um but to a certain extent Robert I mean maybe you're saying it tongue-in-cheek I don't know but like stocking up on extra cans of tuna right now is Not a Bad Thing given where food prices have been heading and can continue to head right I remember a bunch of cans of 20 cents right now and in two months you'll be super glad when they're selling at 40 cents yeah and tuna is a derivative of diesel because it takes diesel to fill the you know the ship the shipping fleet's up and so and most people don't understand the absolute uh essential role that energy plays in the economy um because nothing happens no economic activity happens without the energy to power it and if you care about the pricing of things which is what you're talking about here Robert you have to be aware of what the energy input costs are for that individual product and you know most products require a lot of energy to happen right to your point if you want to get a tuna well yeah it's a fish in the ocean you would think it's hey no energy is involved at all but you gotta basically manufacture the boats to go out there and and uh and fish you've got to put the diesel in for those boats then in most cases most fish that's actually sold in America and caught off American Shores is actually sent to China yeah first to be processed before it comes back here and is put in the can so you know there's just a ton of energy embedded energy that goes into everything so you're exactly right Robert you've got to really look at your vulnerability to energy costs and again I don't have to explain to anybody they've gone Bonkers over this past year given what's been going on with Global Supply chains the war in Ukraine et cetera yeah and so I was I wasn't saying for a couple of days ago they have five cans for a buck with tuna so I just scooped them that man I said I'm loading up on this that's how simple I like to keep things at them well and so I think you know from a practical standpoint we're getting real practical here this is not a bad time that when you see things on sale you know when you're in the store buy extra store you know store it up you'll reduce likely your future grocery bills there's also I don't I don't I don't think in the US we need to worry too much about this right right now but you know if you're in other countries for sure you know there is some of the political instability that we talked about earlier the Sri Lanka type of of instability you know having just sort of the personal resilience of having maybe a deep Pantry that lets you you know get by for a month or two if there's chaotic stuff happening outside or God forbid we have another you know freaking pandemic lockdown can I give another example Andy schackman Who I Really encourage you to interview on the bricks and the oh I definitely will but he talks about is the role of toilet paper Theory we're getting to the basic level here it says you don't worry until you see the role coming up until you see the cardboard until you start to see the cardboard and that's just total human nature right so if you can if you can buck that Trend if you can be the guy that is really paying attention to where the Puck's headed and accumulating your stuff beforehand so that when everybody panics you are already fine and you're not contributing to kind of the the hoarding buying you know frenzy uh there's just all sorts of reasons to to do what you're talking about there Robert but but also I want to get back to the topic of bonds because you know what's safe safe is a relative term um I think for the long term there's lots of great reasons to own hard assets but I actually think that one of the best investments right now for capital in the relatively short term are several bonds that are out there I think U.S treasuries are actually they're providing a return that they haven't provided in years at today's rates is this what you call I bonds I saw a video of yours I'm really glad you brought them up actually because this week There's a really important deadline if you're interested in buying I bonds and folks I bonds probably are the best deal out there right now from a risk return standpoint what does I stand for uh inflation oh okay they are it's serious eye actually okay is what the treasury calls them but they're basically an inflation protection Bond okay um and let me just finish treasuries real fast and I'll go to uh I bonds which you also buy from the US Treasury but U.S treasury bonds are providing a good yield so you could just park your money there right now and let's say we do have a big recession next year let's say the bear Market in stocks and bonds continues you can write all that out get your principal back in a year plus a nice interest uh return and then have dry capital in a year dry powder in a year to deploy into other assets at better valuations that's not too bad now if the FED actually breaks something and we get that fed pivot where the FED shifts from hiking and it's forced to go back to the lowering rates that'll actually increase the value of U.S treasury and you can sell it into the market if you want and make a nice game right so from a risk return standpoint U.S treasuries look better right now than they have in forever and short term in in the short term okay um to your question there about I bonds um so I bonds uh are designed to protect your capital from inflation um and and as measured by the CPI and we could have a whole separate discussion as to whether the CPI actually tracks real inflation or something is it really legitimate is this computer price index is what m is talking about CPI and some people question the measurements they use to keep the CPI up or down they manipulate that also some of the suspicions out there exactly and and we could talk for a long time about that but it it's the only game that's being offered so let's let's talk about how that game works so um based on the increase in the CPI over a six-month period um that's what determines what rate the I bond is going to pay you and they basically change their rate twice a year and the reason why this is important is right now I bonds are yielding 9.62 for the next six months which is a very high rate of return just like a U.S treasury with an eye bond you get all of your principal guaranteed return to you right so you're not going to lose government by the US government yep you're not going to lose any money nominally and you're going to receive the interest payments that they pay you in the interim now the good news is is we actually know what it's going to re-rate to after that it's going to rewrite at about 6.4 wow 80 percent three percent it's a three percent drop and that's just because the increases in CPI have been getting lower and lower and honestly I think the CPI is going to go down going forward from here because the Federal Reserve is trying to make that happen by raising rates high and slowing the economy so the reason why I'm kind of harping on this is I don't think we're going to see a rate this good maybe ever in our lifetimes so in the I bonds right so you're going to get that 9.62 for the first six months and then the 6.848 for the next six months you blend those together it's a little bit over eight percent so you're going to get over eight percent for holding an eye bond for the next year and you get all the same assurances as a one-year treasury so you could own a one-year treasury at four and a half percent or you could own an i Bond at eight percent wouldn't want to own the I Bond I throw another curveball what is a tip then a tip is a treasury inflation protected security and it operates a little bit different than a tip it is probably harder for the time we have here for me to make it really simple for folks all I'll say is there's a video on wealthyon if you go to youtube.com wealthyon that I created I've got a couple videos explaining I bonds themselves but I've got one video that explains the difference between I bonds and tips I will say that right now if you had to buy one of the two the I bond is offering the best opportunity here in the short term yeah and there wasn't but two you can get in and out of them a year yes the tips you can get in and out of really quickly real quick with the eye bond you have to hold it for a year you can sell it anytime after that if you want to but you're locked in for that first year and if and if you want to know more about eye bonds I watched a video of yours Adam with you and uh George Gammon on YouTube when you were talking about it so it was it was fascinating so if you want to learn more go to YouTube and find George Gammon and Adam tiger Adam I think we're out of time we've got overtime in fact I really want to thank you so much we can talk about oh my God this is just the tip of the iceberg talk about tips Rich Dad I'd like to keep it even simpler so buy tuna cans of tuna we're gonna go in the tuna business but if you if you're in if you're working in Japan you have Yen buy tuna fish as soon as possible you know yeah and boy if you can get any eye tuna bonds there you go so Adam thank you for your wealth of knowledge and I encourage everybody to go to Wealthy on and uh any comments no I just appreciate your time Adam and your expertise and your podcasts and please uh please watch wealthian.com because you have some of the most amazing guests and most amazing information so ladies and gentlemen right back for our final word but I want to thank Adam Taggart and uh the question is what's safe today we'll be right back for the final word [Music] welcome back Robert kios I got the Rich Dad Radio Show good news and bad news about Monday Wednesday I listened to Rich Dad anytime anywhere on iTunes Android and YouTube and all of our programs are archived which means we hold in storage at richdad.com we do that for one primary reason you can listen to this again but more importantly friends family and business associates I would get together listen to it that's what he'd do it here originally everybody listens to the same once one podcast and we discuss it because everybody has different points of view people hear different things but we're also one more things we're purely informational and educational we need to make any recommendations although I bonds look pretty good they look pretty good right now all right go check those out I got enough tuna fish in my closet I got enough gold and silver hidden our safes in the mountain but um anyway I we're always going to learn more so please discuss this with friends family and business associates and you'll find out how much your in your brain goes boom it explodes any comments here oh this is a fabulous show and and Adam does keep it keep it very simple and as I said earlier that was one of the best explanations of an inverted yield curve meaning that your short-term bonds are paying a higher interest rate than the long-term bonds which is upside down but what it means is that something is coming and it number one thing it means is a recession most likely but then then worse yeah it could be worse because the bond market the reason they're short-term bonds are more have a higher yield is because they're worried that's the main thing I got they're worried if the bond market is worried maybe people better wake up and they maybe you better get worried too and make sure that you're prepared for whatever is going to break yeah America is what's called a dual line d-e-w it's distant early warning so in the financial markets it's called the bond markets are signaling something's about to happen what are your comments there uh Sarah well I finally have my definition of a bond when Robert and I you know get Adam on let's talk about Bonsai is like good maybe I'll finally figure out what one is but it's so simple it's an IOU that's paid interest that's so simple Yes um so I'm glad we did this show but this I I just this is kind of funny I was writing down some notes and we talked about milkshakes Dirty Laundry tuna I mean very educational also with the with the bonds I also like that he explained what the different kinds of bonds are and the different risks that the different bonds have so that was that was very valuable today and I I really had I knew nothing about eye bonds because you know like well I've never had any money I almost borrowed money to invest but now they have extra money coming in I've got to open my brain up and look at what kind of bonds are available so again I want to thank Adam Taggart wealthyon I thank all of you listening to the Rich Dad radio show this is a longer program but it's an important yoga please share with friends family members business associates and discuss it several times because it'll open your minds to what's going on in the real world thank you all for this thank you [Music]

Channel: The Rich Dad Channel

Views: 421,328

Keywords: TheRichDadChannel, robert, kiyosaki, rich dad poor dad, motivational speakers, business ideas, make money, how to get rich, network marketing, how to make money, how to invest, passive income, cashflow game, treasury bonds, treasury bonds explained, treasury bonds and interest rates, wealthion, adam taggart, robert kiyosaki financial education, safe investments, how to secure your wealth, robert kiyosaki, financial education

Id: 80M0f-snOhs

Length: 64min 51sec (3891 seconds)

Published: Wed Nov 02 2022