The Future Of Our Economy

Dear Reader, 

“Money is an idea, backed by confidence, representing work truly done, and is exchangeable.”

Are we heading for a recession, or heading for depression, or are we heading for the biggest boom in world history? 

James Rickards, a good friend and someone I consider a real teacher, gives a great insight into what is happening in our economy in his book, The Road to Ruin. He uses the metaphor of an avalanche to describe the coming crash and the possible collapse of the dollar. Imagine snow accumulating for years on the mountain peaks above a village. Rather than detonate small charges, causing small avalanches that would ruin the ski season, the powers-that-be keep building barricades to attract more skiers as more and more snow accumulates, and the threat of the “big one,” a catastrophic avalanche grows every year. Then one day, a tiny snowflake lands on a mountain peak and the village is buried under tons of snow.

This avalanche metaphor has been going on since 1971, the year President Richard Nixon took the U.S. dollar off the gold standard. After each market crash, rather than fix the problem, our leaders print more fake money—and the mountain of debt grows taller and deeper, and the problem grows more ominous every year.

Rather than snow, the world village is about to be buried under an avalanche of debt, fake investments, and fake money. 

All we need is that last snowflake.

The End of the Dollar

In 1944, 44 nations gathered at Bretton Woods Conference to agree upon the new rules of the post-WWII international monetary system. Prior to WWII, the British pound sterling was the top dog in the world of money. 

Fighting WWII caused England to ship its gold to the United States to pay for the war. As WWII was coming to an end, the United States held much of the world’s gold. Since the United States had the gold, it promised to back its dollar with gold, and the U.S. dollar became the “reserve currency” of the world. In 1944, the U.S. dollar was as good as gold. 

Literally. 

The dollar was trusted and respected. That soon ended.

Between 1950 and 1960, Germany, Japan, England, and the rest of Europe recovered and began exporting products to the United States. Gold-backed dollars left the United States and Nixon and his buddies panicked. In 1971, Nixon broke the promise made at Bretton Woods, and the United States began exporting fake money in exchange for real products such as Volkswagens and Toyotas.

The world gladly accepted these fake dollars as long as the world had confidence in the leaders of the United States. That confidence was severely tested after 2008.

Is that confidence nearly gone? 

Is the end near? 

Is the mountain of debt too high? 

Will more fake money keep the avalanche from coming down the mountain? Is the last snowflake on its way?

The Next Money

Jim Rickards states that government money may soon morph into SDRs, or special drawing rights, another form of fake money—this time issued by the International Monetary Fund (IMF). 

The SDRs will not last. SDRs are more fake money. Will SDRs mark the end, the global collapse of government money? I expect that there are many people pondering that question.

The real issue of government money is the word: confidence. As long as people have confidence in our governments and central banks, fake government money such as the dollar, yen, yuan, pesos, and Euro are safe. The last snowflake is confidence. The moment confidence is gone, government money is toast, the dollar collapses, and the avalanche comes tumbling down the mountain, decimating everything in its path.

Rich dad’s favorite definition of money was: 

“Money is an idea, backed by confidence, representing work truly done, and is exchangeable.”

Take each line and you will understand why government money is toast.

  1. Money is only an idea. Money does not exist.
  2. For money to exist, confidence in the leaders of our government and our banks must exist.
  3. Real money represents work truly done. Printing fake money requires no real work.
  4. Real money produces real value. Fake money is the thief of value. That is why fake money is not a store of value.
  5. Printing fake money rips off real people and devalues the real work of real people.
  6. Printing fake money makes money manipulators richer.
  7. When real people wake up and confidence is gone, fake government money will no longer be exchangeable, and the avalanche of debt will come crashing down the mountain.
  8. Financial education is self-defense against the greedy poor and the greedy rich.

How to Get Out of Fake Money

Today, billions of people are living beneath the avalanche. They are trapped in a central banking system owned by the mega-rich. The central banks are not elected by the people and do not have to answer to the people. 

This begs the question: How do I get out of fake money?

Many believe that the answer is to get back on the gold standard. That is what I did in 1972.

To review… in 1972, I was already on my own silver standard. In 1964, after noticing a copper tinge on the edge of fake U.S. silver coins, I began turning in paper money for rolls of silver coins, sorting out real silver coins, and returning fake silver coins to the bank. Just so you know, a real, pre-1965 U.S. silver dime is worth about $2. I still have bags of real silver dimes, quarters, and half-dollars.

In 1972, after flying behind enemy lines in search of gold, I smelled a rat. I suspected we were being lied to about the Vietnam War and about money. That’s the year I purchased my first gold coin, a South African Krugerrand, in Hong Kong for approximately $50. I was now a criminal because inn 1972, Americans were not allowed to own gold. I still have that coin, stored safely and legally, not in a bank but in a country outside the United States. Today, that $50 Krugerrand is worth about $1,200. 

In 1973, I took my first real estate course. I learned about infinite returns. I no longer needed fake money. I had found a real teacher. That year, I dropped out of my MBA program.

Since 1973, I have been on my own gold and silver standard. Additionally:

  1. I am out of traditional education.
  2. I take seminars and read books in search of real teachers.
  3. I invest in real assets where the government wants me to be a partner. By investing in real assets the government wants me to invest in, I pay little to zero taxes, legally.
  4. The Fed prints money. I print my own money.
  5. I stay out of the grip of the booms, busts, and crashes of “too big to fail” banks, and Wall Street investment banks.
  6. I use debt to achieve infinite returns and pay zero taxes.

Getting on your own gold and silver standard—before the last snowflake, before the avalanche—gives you a way off the mountain. If the avalanche knocks out the electrical system, government money and people’s money are toast. ATMs will shut down, Wall Street will close, and people’s money will disappear when the World Wide Web disappears. 

Regards,

Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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