Robert Kiyosaki, the author of the famous book “Rich Dad, Poor Dad” in support of digital currencies, has released an enthusiastic statement on his Twitter. This author has given his fans 7 reasons why they should invest in Bitcoin and precious metals in the current situation.
To Report Crepito Potito, Kiyosaki’s first reason for investing in Bitcoin is that the US government is borrowing too much money. According to the US National Debt Clock, the country now has nearly $31 trillion in debt. However, the US GDP is only $24.8 trillion, so the country’s debt-to-GDP ratio will be 136.76%.
In his second reason, Kiyosaki mentions the intention of the United States to keep interest rates low. Interest rates hitting historic lows in 2020 and 2021 created a historic uptrend in Bitcoin and the stock market.
In explaining his third reason, he said that keeping the interest rate low requires the central bank to buy treasury bonds and expand its balance sheet. This will eventually lead to the next reason to buy Bitcoin, inflation.
The annual rate of inflation or the Consumer Price Index (CPI) in the United States has been increasing since 2021 and reached 9.1% in June. However, this rate has been somewhat controlled over the past two months due to the pressure of the Federal Reserve’s contractionary policies through interest rate hikes. Of course, this trend caused the cryptocurrency and stock markets to crash during this time.
Continued inflation and recession
Kiyosaki points out that higher interest rates will lead to an increase in government debt. Nicholas Merten, a market analyst at DataDash, also noted on Monday that the Fed’s current policy will increase housing costs (rent, income tax and utility costs). According to Merten, this policy could lead to levels of recession-induced economic crisis.
Read more: What is the difference between economic recession and inflationary stagnation?
Economic crisis (Depression) means severe and long-term stagnation in economic activities. In economics, an economic crisis is usually defined as a severe recession that lasts three years or more or a recession that results in a decline of at least 10% of the gross domestic product (GDP).
The United States experienced recessionary conditions in July after recording two consecutive quarters of negative GDP growth.
Some optimists in the digital currency market expect the Federal Reserve to loosen its monetary policy a little more in the face of this turmoil in the market. This event, if it happens, will lead to the weakening of the dollar and, as a result, the increase in the price of digital currencies. Kiyosaki concludes from all these arguments that the US dollar is dying.
He concluded at the end:
Buy gold, silver and bitcoins.
Gold, silver and bitcoin are often included in the same basket as sound money. Reliable and rare money whose value cannot be destroyed. These features have made bitcoin, gold and silver resistant to inflation in the long run, unlike the dollar; A fiat currency whose supply has increased exponentially in the last 3 years.
Kiyosaki has previously advised his followers to invest in a similar portfolio while paying attention to Ethereum.