Robert Kiyosaki – How the Financial Crisis Was Built Into the System
How did we get into the current financial mess? Great question.
Here’s what Robert Kiyosaki had to say:
Turmoil in the Making
In 1910, seven men held a secret meeting on Jekyll Island off the coast of Georgia. It’s estimated that those seven men represented one-sixth of the world’s wealth. Six were Americans representing J.P. Morgan, John D. Rockefeller, and the U.S. government. One was a European representing the Rothschilds and Warburgs.
In 1913, the U.S. Federal Reserve Bank was created as a direct result of that secret meeting. Interestingly, the U.S. Federal Reserve Bank isn’t federal, there are no reserves, and it’s not a bank. Those seven men, some
American and some European, created this new entity, commonly referred to as the Fed, to take control of the
banking system and the money supply of the United States.
In 1944, a meeting in Bretton Woods, N.H., led to the creation of the International Monetary Fund and the
World Bank. While the stated purposes for the two new organizations initially sounded admirable, the IMF and
the World Bank were created to do to the world what the Federal Reserve Bank does to the United States.
In 1971, President Richard Nixon signed an executive order declaring that the United States no longer had to
redeem its paper dollars for gold. With that, the first phase of the takeover of the world banking system and
money supply was complete.
In 2008, the world is in economic turmoil. The rich are getting richer, but most people are becoming poorer.
Much of this turmoil is directly related to those meetings that took place decades ago. In other words, much of this turmoil is by design.
Power and Domination
Some people say these events are part of a grand conspiracy, and that might well be. Some people say
they represent the struggle between capitalists, communists and socialists, and that might be, too.
I personally don’t participate in the debate over a possible global conspiracy; it’s a waste of time.
To me, the wider struggle is for power and domination.
And while this struggle has done a lot of good — and a lot of bad — I just want to know how to avoid becoming its victim. I see no reason to be a mouse trying to stop a herd of elephants from fighting.
Currently, many people are suffering due to high oil price, the slowdown in the economy, loss of jobs, declines in home values, increased bankruptcies and businesses closings, savings being wiped out, the plummeting stock market, and rising inflation. These realities are all direct results of this financial power struggle, and millions of people are its victims today.
An Extreme Example
Kiyosaki was in South Africa in July. During his television and radio interviews there, he was often asked his opinion on the world economy.
Speaking bluntly, he said that South Africans had a better opportunity of comprehending the global turmoil
because they’re neighbors to Zimbabwe, a country run by Robert Mugabe.
In his interviews, he said, “What Mugabe has done to Zimbabwe, the Federal Reserve Bank and the IMF are
doing to the world.” Obviously, his statements disturbed many of the journalists. He did his best to comfort them and assure them he was not an anarchist. He explained, as best as he could, that Zimbabwe was an extreme example of an out of control power struggle.
After they were assured he was only using Zimbabwe to illustrate my point, he said, “If you want to understand
the world economy, take a refugee from Zimbabwe to lunch.”
He advised them to ask the refugee these questions:
1. How fast did the economy turn?
2. When did you know that you were in financial trouble?
3. When did you finally decide to leave Zimbabwe?
4. If you could do things differently, what would you have done?
Three Approaches to a Crumbling Economy
Kiyosaki continues …
I spoke to three young couples from Zimbabwe while I was in South Africa. Two couples were recent refugees now
living in South Africa, and one couple still lives in Zimbabwe. All three couples had interesting stories to tell.
One couple said that they would have quit their jobs earlier. Instead, they hung on, hoping the economy
would change. Then, virtually overnight, the value of the Zimbabwean dollar dropped and inflation went through
the roof. Even though they received pay raises, the couple couldn’t survive and soon depleted their savings.
They left Zimbabwe by car with almost nothing. If they could’ve done something differently, they told me, they
would have started a business in Zimbabwe and began exporting products to South Africa, so that they would
have had South African currency and a bank account there before they fled.
The second couple that fled the country said they saved money and paid off their house and other debts even as
the Zimbabwean dollar fell in value. Looking back, they say they would’ve saved nothing and gotten deeply in
debt in Zimbabwe, allowing them to pay off their debt with the cheaper dollars. Instead, they fled after they
lost their jobs, leaving behind their house and owning $200,000 in nearly worthless Zimbabwean dollars.
The third couple still lives in Zimbabwe. When they saw the writing on the wall, they set up a business in South Africa and, with the profits, began acquiring tangible assets in Zimbabwe. Often, they’ll buy an asset in Zimbabwe and pay the seller in South African currency.
They believe that once Mugabe is gone and order is restored, they’ll be in a strong financial position.
Many Problems, Few Solutions
There are three major problems with the events of 1913, 1944, and 1971. The first is that the Fed, the
World Bank, and the IMF are allowed to create money out of nothing. This is the primary cause of global
inflation. Global inflation devalues our work and our savings by raising the prices of necessities.
For example, when gas prices soared, many people said that the price of oil was going up. In reality, the
main cause of the high price of oil is the decreasing value of the dollar. The Fed, the World Bank, and the
IMF, like Zimbabwe, are mass-producing funny money, thereby increasing prices and devaluing our quality of life.
The second problem is that our economic crises are getting bigger. In the 1970s, the Fed faced and solved
million-dollar crises. In the 1980s, it was billion-dollar crises. Today, we have trillion-dollar crises.
Unfortunately, these bigger crises mean more funny money entering the system.
The third problem is that in 1913, the Fed only protected the large commercial banks such as Bank of
America. After 1944, the Fed, the World Bank, and the IMF began bailing out Third World nations such as
Tanzania and Mexico. Then, in 2008, the Fed began bailing out investment banks such as Bear Sterns,
and its role in the Fannie Mae and Freddie Mac debacle is well known. By 2020, the biggest of bailout of all
will probably occur: Social Security and Medicare, which will cost at least a $100 trillion.
Even if we find more oil and produce more food, prices will continue to rise because the value of the dollar
will continue to decline. The dollar has lost over 90 percent of its value since the Fed was created. The U.S.
dollar will continue to decline because of those seven men on Jekyll Island in 1910.
Granted, the funny-money system has done a lot of good — it has improved the world and made a lot of
people rich. But it’s also done a lot of bad. I believe somewhere between today and 2020, the system will break.
We’re on the eve of financial destruction, and that’s why it’s in gold I trust. I’d rather be a victor than
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