In the aftermath of the Silicon Valley Bank collapse, finance expert Robert Kiyosaki cautioned the central bank of a global powerhouse may be the next to belly up.
“The biggest bank that’s going to go down is Bank of Japan,” Kiyosaki explained. “Because the Bank of Japan carried the interest rates at, what, zero or whatever they did, [and] financed the derivatives markets. And the derivatives market, as Warren Buffett said about derivatives, they’re weapons of mass financial destruction and the derivatives market in the world today, financed by the Bank of Japan, is a quadrillion [dollars].”
The “Rich Dad, Poor Dad” author’s comments come amid what some have optimistically labeled a market rally after stocks recorded another strong day and markets looked positive in March.
Kiyosaki, however, challenged the idea of a comeback, noting issues with the derivative markets. He also warned the Bank of Japan’s heavy connection to derivative markets put it in a more vulnerable position and threaten greater effects on the global economy.
“The Bank of Japan has been financing derivatives. Derivatives are a quadrillion [dollars]. That’s 1000 trillion,” he explained on “Cavuto: Coast to Coast” Thursday. “So we haven’t seen the crash coming yet.”
In addition to the issue with derivative markets, the financial legend criticized money-printing habits along with the Federal Reserve’s aggressive rate hike strategy.
“Since 2008, interest rates have been dropping, dropping, dropping, dropping. All of a sudden, the interest rates are going up. [Federal Reserve Chair] Powell has raised interest rates faster than any time in history. So somebody says, ‘well, he’s playing Volcker.’ Well, [Former Fed Chair Paul] Volcker raised interest rates over years. Powell is doing it over months,” Kiyosaki said.
Kiyosaki argued against age-old advice on the Fed given the rapid pace of rate hikes.
“This idea of don’t fight the Fed and all that, I think that’s old advice. I would stay with gold and silver… I’ve been Chicken Little or Paul Revere for all these years, but I’d still rather have gold than this stuff,” Kiyosaki said in the Thursday segment, pointing to a piece of paper currency.
The industry expert did not stop with his warning about a coming bank collapse, adding the implications could give China another avenue for asserting global dominance.
“China is coming after us,” he added.
While the U.S. dollar was made the global reserve currency in the 1940s, China has taken aggressive steps to compete economically and replace the dollar with the yuan. Their growing influence through efforts like the Belt and Road Initiative has only garnered more support for the communist country.
“The problem with Americans, we live in a fishbowl. We can’t see how everybody can see. And right now, the BRICS, Brazil, Russia, India, China, South Africa, and Saudi Arabia, they’re going to shift to the Chinese gold yuan, and that’s going to send trillions of [U.S. dollars] back to us,” Kiyosaki said.
Likening the global economy to a fault line, Kiyosaki warned these factors are already causing tremors and that investors should be on guard.
“The San Andreas Fault still sits there, which will make California fall into the ocean if that happens,” he said. “But I’d rather not live on the San Andreas fault right now. That’s all I’m saying.”