The next chapter of the banking crisis will involve the Bank of Japan, according to Robert Kiyosaki. The “Rich Dad Poor Dad” author said the bank’s exposure to derivatives markets is a large risk. Kiyosaki has been bearish for years, predicting the market to crash under the weight of high inflation. Loading Something is loading.
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The banking crisis isn’t over, and its next chapter will involve one of the world’s most important central banks, according to “Rich Dad Poor Dad” author Robert Kiyosaki.
In an interview with Fox Business on Thursday, the personal-finance guru expressed his bearishness on the current rally in markets, and warned Japan’s central bank may be the next big institution to face turmoil.
“The biggest bank that’s going to go down is Bank of Japan,” Kiyosaki said, pointing to the bank’s heavy exposure to derivatives markets. Kiyosaki has previously said he expected the derivatives market to plummet as the result of other central banks around the world raising interest rates.
“The Bank of Japan has been financing derivatives. Derivatives are a quadrillion [dollar market],” he told Fox Business Thursday. “So we haven’t seen the crash coming yet.”
The Federal Reserve has aggressively hiked rates over the past year to tame inflation, with the fed funds rate now in a range between 4.75%-5%. That’s the highest interest rates have been since 2007, and Kiyosaki has slammed the policy moves for weighing heavily on asset prices.
His view on banking turmoil differs from economists, who say the contagion from Silicon Valley Bank’s collapse should be relatively contained. The tech-focused bank failed in early March and sparked fear of a wider banking crisis, but observers say that the issues at the bank were more a case of bad risk management than the result of systemic weakness. Fed officials had reportedly spotted red flags at SVB for years before it finally went down.
Market volatility has also stabilized in recent weeks as troubled banks like First Republic have regained their footing after speedy support from the government and large banks.
Still, experts warn the crisis has raised the risk of a recession, as banks are weathering huge capital losses from SVB’s crash, which could tighten credit conditions and slow economic activity.
Kiyosaki has been bearish on the market for years, predicting in 2021 that investors would soon see the “biggest crash in world history.” He warned then that rising interest rates were bound to bust through inflated asset prices, and urged his Twitter followers to invest in cryptocurrencies and precious metals.