'That Was A Lie': Robert Kiyosaki Slams Fed, Warns About Systemic Inflation. Here's How He's Investing With Rising Prices

Remember when the Federal Reserve claimed that inflation would be transitory back in early 2021?

The subsequent two years have undoubtedly provided a harsh reality check for that statement. Despite the Fed’s implementation of aggressive rate hikes, consumer prices remain significantly higher.

And now, “Rich Dad Poor Dad” author Robert Kiyosaki is warning that the problem might be here to stay.

“My biggest concern is that inflation is now systemic,” he told CNBC. “When Powell said it’s transitory, that was a lie.”

‘This Here Is Paper’

Many attribute rising prices in the U.S. to the easy monetary policy the Fed adopted in response to the COVID-19 pandemic. But Kiyosaki points out that the increasing prices consumers are facing result from more than just money printing. 

“When Biden took the Keystone XL Pipeline offline, oil went from $30 a barrel to $120 a barrel. That was inflation, not the printing of money,” he explains.

No matter the underlying cause — be it a dovish Fed, the issuance of stimulus checks or the energy policy of the Biden administration — inflation is happening. This erodes the purchasing power of money — the U.S. dollar, in this case.

Kiyosaki is not a fan of the greenback.

“This here is paper, I don’t trust it,” he said, holding up a $1 bill.

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4 Gs To The Rescue

The Fed’s hawkish monetary policy has brought headline inflation down from its peak reading of a 9.1% year-over-year increase registered in June 2022.

But if you share Kiyosaki’s view and are worried that inflation might be systemic, you probably don’t want to stash your savings under the mattress.

When the host asks Kiyosaki what he thinks the Fed will do to bring inflation under control, the author replies, “It’s not what the Fed is going to do, what are you going to do?”

Kiyosaki then refers to the four Gs, a group of assets that he said he’s been investing in for most of his life.

Gold: Because precious metals can’t be printed out of thin air like fiat money, people have been using them to hedge against inflation. And Kiyosaki is a fan. But while investors can gain exposure to the segment through exchange-traded funds (ETFs) like the SPDR Gold Shares (NYSE:GLD) and the iShares Silver Trust (NYSE:SLV), the author says he’s “staying away from the SLVs or the GLDs” because he wants “no counterparty risk.” Instead, he prefers physical bullion.

Ground: Real estate is another popular inflation hedge. As the price of raw materials and labor goes up, constructing new properties becomes more expensive. And that, in turn, contributes to the appreciation of existing property values. “I own apartment houses,” Kiyosaki said.

Gasoline: Gasoline prices have come down from last summer’s peak, but Kiyosaki sees an opportunity in the commodity. “The greenies hate the thing, but that’s how we fly our planes,” he said.

Grub: Because of inflation, everyone has felt the pain of higher food prices. Kiyosaki says that he invests in food, specifically highlighting cattle as an example.

Hard Assets

Investors can tap into many inflation-proof sectors through companies and ETFs that trade in the stock market. But Kiyosaki isn’t really a big stock guy.

“I don’t trust anything that can be printed, I like the hard stuff,” he told CNBC. “I’m a commodity guy.”

The good news? These days, it’s easy for retail investors to invest directly in inflation-resistant hard assets with as little as $100 through the private market.

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