Bitcoin Can Protect Consumers From Existing Fed Hike Paranoia, Says R. Kiyosaki
Bitcoin, the leading cryptocurrency with a total market capitalization of nearly $393 billion, is once again included in conversations involving assets that could help protect wealth when financial apocalypse occurs.
This is after Robert Kiyosaki, the American businessman who authored the finance-focused book “Rich Dad, Poor Dad”, shared his feelings on the US central bank’s aim to deal with high levels of inflation – the implementation of interest rate increases.
Kiyosaki did not mince words, suggesting that the agency’s plan is a recipe for disaster as it will serve as the “catalyst” for an economic crash of gigantic proportions.
The famous entrepreneur claimed stocks, property and bonds will take the full brunt of the looming turmoil that even economic superpowers like the US, China and Russia will not be able to parry.
Meanwhile, the famed author said precious metals and Bitcoin, which is trading at $20,447 at press time according to Coingeckowill soften the blow for investors, helping them preserve their wealth in the event the Fed’s plans go awry.
Image: Coincu
Bitcoin as a means of protecting wealth
There’s a story that happened in Venezuela about three years ago about a man who said that keeping his money in bolivars (the country’s fiat currency) would have been “financial suicide.”
Carlos Hernandez recalled during that time that his nation was staring at a 3.5% daily inflation rate, while annual statistics showed a staggering 1.7 million percent inflation rate as of 2018.
To protect his financial assets, Hernandez kept his money in Bitcoin and withdraws small amounts when the need arises.
By doing so, he was protected from the meltdown of the country’s economy when the fiat currency became highly volatile.
Bitcoin and other cryptocurrencies have this kind of effect that negates scary things like high inflation rates.
That’s probably one of the reasons Kiyosaki believes the asset, along with the precious metal gold, are viable hedges and stores of value.
“Raising interest rates will kill the economy. Stocks, bonds and real estate will crash. The Fed will pivot. Buy Gold, Silver and Bitcoin Ahead of Fed Pivot Take care, the businessman said through his Twitter account, referring to an upcoming 75 bps interest rate hike that will be implemented on November 2.
The Fed remains relentless
To combat high inflation values this year, the central bank has increased basis points by 25 in March.
That wasn’t enough, and so the agency carried out another round of hikes in May, to the tune of 50 basis points.
Inflation continued to hurt the US economy despite these measures, so on September 21 Fed Chair Jerome Powell announced another 75 bps interest rate hike.
When the move failed to reduce inflation to acceptable and tolerable levels, the office had no choice but to enforce another go next November 2.
As it stands, the Fed, seemingly oblivious to the implications, continues its aggressive fight against the economic threat even as businesses and households end up suffering the consequences.
If this continues, Kiyosaki’s suggestion to turn to precious metals and Bitcoin may start to make a lot more sense now.
BTC market cap at $397 on the daily chart | Featured image from Forbes, Chart: TradingView.com
