Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki


Precious Metals in a World that is Flat, Fungible and Fiat

Ultimately, the global markets remain the battlefield in which investors compete for the last remaining quality collateral. Furthermore, secondary to Fed taper talk’s effect on the United States, is its impact on markets abroad.   As a case in point, the impact of the recently announced Fed QE taper plans on the exchange rate of emerging market currencies has been rather dramatic to say the least. The threat of tapering has sent shock waves across emerging markets seeing sharp crashes in the value of Indonesian and Indian currencies. Even the Mexican Peso has been hit substantially as hot money investors’ interest returns to Dollar assets.  For now the focus is on U.S. Treasuries and currencies, but this is only foreshadowing the upcoming rush into physical commodities —- whose market value remains hostage to false speculation and manipulation — the poster children of which are the precious metals. Asian bond prices are also falling, and the last time they traded below par was after the Lehman bankruptcy. This all coincides with U.S. deficit funding, need reduction and repo collateral scarcity. The Emerging Markets Currency Debacle and Silver The failure of emerging market currencies like the Indian Rupee and the Indonesian Rupiah to gain support against the U.S. Dollar have been especially notable and this is having a marked effect on growth in those economies.   For its part, India is currently considering drastic measures aimed at supporting its currency the Rupee that has been under attack. The rupee fell 25 percent over the last few months as the flight to quality gathers steam after the Fed’s taper talk initially began. Furthermore, even the Mexican Peso and the Brazilian Real have seen strong selling pressure emerge in the past few months, with the Peso’s exchange rate against the U.S. Dollar falling from 11.94 in May to a low of 13.47 seen in recent trading sessions. This negative taper talk effect on emerging markets currencies seems to be another black swan event since it surprised the financial markets, had a substantial impact and has been rationalized in hindsight. Large funds and hot money investors have been scrambling to respond to the Fed’s taper talk as best they can. Official Indian Attempts Backfire The various official attempts by the Indian government to offset troubling Fed taper talk effects on its currency seem to be backfiring, adding fuel to the declines in other emerging market currencies like the Indonesian Rupiah as well. Indian Plan A seemed to follow the status quo by blaming currency outflows on the Fed and speculators. When that failed to halt outflows from the Rupee, the response to something clearly going on...

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Kim Kiyosaki: The steps women should take to financial independence

Entrepreneur, real estate investor and best-selling author of “Rich Woman”, Kim Kiyosaki is on a mission to help women reach their goal of financial independence. Here she talks about the steps women should take to improve their financial knowledge. Share and...

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Robert Kiyosaki on Network Marketing-It’s an Asset, Not a Job

I am sometimes asked, “Why do so few people make it to the top of their network marketing system?” The truth is, the top of the network marketing system is open to everyone-unlike traditional corporate systems, which allow only one person to reach the top of the company. The reason most people do not reach the top is simply because they quit too soon. So why would someone quit short of the top? Most people join only to make money. If they don’t make money in the first few months or years, they become discouraged and quit (and then often bad-mouth the industry!). Others quit and go looking for a company with a better compensation plan. But joining to make a few quick dollars is not the reason to get into the business. The Two Essential Reasons to Join a Network Marketing Business Reason number one is to help yourself. Reason number two is to help others. If you join for only one of these two reasons, then the system will not work for you. Reason number one, means that you come to the business primarily to change quadrants-to change from the E (Employee) or the S (Self-employed) quadrant to the B (Business owner) or I (Investor) quadrant. This change is normally very difficult for most people-because of money. The true E or S quadrant person will not work unless it is for money. This is also what causes people to not reach the top of the network marketing system: they want money more than they want to change quadrants. A B quadrant or I quadrant person will also work for money, but in a different way. The B quadrant person works to build or create an asset-in this case, a business system. The I quadrant person invests in the asset or the system. The beauty of most network marketing systems is that you do not really make much money unless you help others leave the E and S quadrants and succeed in the B and I quadrants. If you focus on helping others make this shift, then you will be successful in the business. As a B or an I, sometimes you don’t get paid for years; this, a true E quadrant or S quadrant person will not do. It’s not part of their core values. Risk and delayed gratification disturb them emotionally. Delayed Gratification and Emotional Intelligence One of the beauties of network marketing is that it focuses on developing your emotional intelligence as well as your business skills. Emotional intelligence is an entirely different matter from academic intelligence. In general, someone with high emotional intelligence will...

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Crash Course by Chris Martenson – 38 minute condensed version

Join Dr. Chris Martenson as he explains the three E’s of the economy, energy, and the environment and how they are interrelated in this condensed version of his three hour Crash Course. As Chris often reminds us in the Crash Course, “The next twenty years are going to be completely unlike the last twenty years.” Share and...

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Get ready, the silver price is heading up, Interview with David Morgan

Get ready, the silver price is heading up, Interview with David Morgan Share and...

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Investing Legend: There Is No “Equity Risk Premium”

The following is an excerpt from a recent issue of Private Wealth Advisory. As noted yesterday, generally speaking stocks today are showing all of the hallmark signs of topping out. The market is overpriced, overbought, the smart money is selling, CEOs are bearish, market breadth is shrinking and earnings growth looks poor. Now, I am not officially calling a top in the market today. But I do want to alert you that a top of some kind, possibly major, is forming. In terms of predicting how far the market will fall, we first need to consider that the stock market is in a bubble. Historically, bear markets feature a drop of 32%. Bursting bubbles on the other hand, usually feature a drop of 50%. Indeed, if you look at the last two market Crashes over the last 13 year, all of them featured drops of roughly 50% or so. Based on this measurement, this would mean the S&P 500 falling to sub-900. Other indications of a market top forming can be drawn from historical price movements. Mark Hulbert from Marketwatch recently noted that of 35 market tops since the 1920s, the preceding bull market has seen stocks rise 21% in the previous 12 months. The S&P 500 just hit a 23% gain in the last 12 months (see Figure 5 below). So we’re on track with a market top in terms of historic price trends. Finally, there are major valuation concerns for the markets today. Since the S&P 500’s founding in 1926, stocks have returned an average of 11% per year. Consider the following: had you invested $ 10,000 in the S&P 500 in 1926 (at that time it was the S&P 90) with dividends reinvested today it would be worth over $ 33 million. Without dividends reinvested, it would be worth $ 1.9 million. Put another way, without dividends, which are paid out of earnings, stocks return only slightly more than Treasuries, though with considerably more risk. Thus, the ideal time to invest in stocks is a time in which future earnings yields from stocks are expected to grow considerably. This would indicate that dividends are likely to grow, thus allowing for a considering stock market “premium” in terms of returns. Today is not such a time. As famed value investor John Hussman notes, the 10-year Treasury bond is currently yielding 2.6%. Hussman believes stocks will average 2.8% per year going forward for the next 10 years. Thus, there is literally no “equity risk premium” at this time. Put another way, the benefits of owning stocks based on future earnings is simply NON-existent. The time to prepare for...

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US Gold rises above $1368 after stimulus concerns ease

MUMBAI (Commodity Online): US gold recorded a recovery from its recent bearish rally and recorded a jump on Thursday after US Federal Reserve said that it would maintain its ‘bullion friendly’ monthly bond purchases at $ 85 bn levels. The yellow metal jumped most in 15 months. Comex gold futures on electronic platform jumped 3.9% to $ 1358.9 per troy ounce for December delivery as of 09.27 IST on Thursday. The Federal Open Market Committee (FOMC) “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” according to a statement from the FOMC on Wednesday after a two day meeting. On Wednesday, gold prices recorded decline and fell below $ 1300 before the release of FOMC statement on concerns that US Central Bank would start curbing its monetary stimulus later this month on improving economic conditions in the US and around the world. The Central Bank has stated yesterday, that it requires further evidence that economic conditions in the US have been improving to reduce its monetary stimulus. Gold recorded a rise of 70% from the end of December 2008 to June 2011 after US Central Bank started its monetary stimulus. Firm gold demand would determine the yellow metal’s price trend in 2013 and 2014 as investment demand would be declined, said HSBC in its recent report. HSBC has raised its 2013 average price estimate for gold to $ 1,446 an ounce, up $ 50 from its previous estimate, based on the rise in physical demand. HSBC left its 2014 and 2015 estimates unchanged at $ 1,435 and $ 1,395, respectively. Weak data releases from the United States released on Wednesday may have supported the yellow metal prices further in the global market to certain extent today. Silver futures for December delivery on Globex platform of Comex was seen trading with a gain of $ 1.51 at $ 23.07 per troy ounce as of 09.53 IST on Thursday. US Gold rises above 68 after stimulus concerns ease Share and...

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Simon Black – After $1+ trillion, the Fed can’t even create jobs in the banking industry

September 20, 2013 Santiago, Chile One of those generally accepted truths that most people believe is that banks are safe. We seem to be told this for our entire lives… that banks, in their grandiose buildings and marble floors, are veritable rivers of money. We’re also told that bankers are conservative fiduciary stewards, unflappably restrained in managing other people’s money. And even in the infinitesimally unlikely event of an anomaly, the government is standing behind the banks to ensure that depositors don’t lose. With such a strong propaganda machine behind the banks, you can’t really blame people for not giving a second thought to where they park their cash. But this is actually a huge decision. A bank is like a silent financial partner. And when the going gets tough, choosing the wrong financial partner can be as destructive as a bad marriage. Just ask anyone in Cyprus. In the Land of the Free, the Godfather of the banking industry is the Federal Depository Insurance Corporation (FDIC), the primary entity that is charged with regulating and insuring the banking industry. Given such a prodigious task, particularly in these tumultuous times, you’d think the FDIC would have a vast treasure trove of reserve funds to guarantee the entirety of the US banking system. Again, though, this is another case of reality being far, far from the sentiment and propaganda. Based on the FDIC’s recently published numbers, their reserve fund holds a mere $ 37.9 billion. This sounds like a lot. Except when you compare it to the $ 5.25 trillion of ‘insurable deposits’ held in the US banking system. In other words, the FDIC’s reserve fund constitutes just 0.7% of the bank deposits they’re obliged to guarantee. This is hardly a resilient figure. Especially when the FDIC’s own report names 553 ‘problem’ banks which control nearly $ 200 billion in assets, about 5 times the size of their reserve fund. These decisions matter. It matters where we hold our savings. And how. We cannot simply assume away that our home country’s banking system is in good financial condition. Or that our funds are safe. It’s important to take a look at the hard numbers, and then make a rational, informed decision about the best place to hold your hard-earned savings. The world is a big place, and there are plenty of attractive alternatives. Norway, for example, presents some of the best capitalized banks in the world. They’re backed up by a government that has zero debt and is awash with cash. And the Norwegian krone is mathematically the safest currency in the West. There are many other great options to...

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Gold & Silver – The Greatest Wealth Transfer in History – Mike Maloney

This clip is from the recent Casey Research event “When Money Dies”. Mike Maloney clearly explains the following: * Wealth is never destroyed, it is merely transfered. * What could potentially happen if all currencies have a crisis, at the same time? * Why this could be the greatest wealth transfer in the history of mankind. * Mining stocks with speculative capital. * Fool’s Gold – ETFs, leverage accounts, and numismatic coins. * Why is this particular time in history unlike any other? All this and more on this interesting video! If you are ready to be on the winning side of the greatest wealth transfer in history – join our team to build your own gold and silver home based business and the opportunity to build extra cash flow income and purchase pure gold and silver products from Swiss Gold Global. Share and...

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Robert Kiyosaki – How the Successful Invest

Avoiding losing money by asking the right questions

In late 1974, while most of my friends were going to school or trying to find a good job, I was getting a different kind of education—a financial education.

I purchased a small condominium on the fringes of Waikiki. It was one of my first investment properties. It was a nice two-bedroom, one-bath unit in an average building. The price was $56,000. It was a perfect rental unit, and I knew I could fill it quickly.

I was excited about the investment and went to show the deal to my rich dad. He looked over the document, and in less than a minute, he looked up and asked, “How much money are you losing each month?”

“About $100,” I said.

“Don’t be foolish,” rich dad said. “I haven’t gone over the numbers in detail, but I can tell just from these documents that you’re losing more than that. Why would you invest in something that knowingly loses money each month?”

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