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Consumer crunched

Kiyosaki isn’t exactly pleased with the current state of the U.S. economy.

“America has stopped producing products, we produce bubbles,” he says, adding that we now have bubbles in the real estate market, the stock market, and the bond market.

The author also criticizes President Joe Biden’s decision to halt the Keystone XL oil pipeline, which he believes is a major reason energy prices are so high.

And that does not bode well for the average Joe.

“The average American doesn’t have 1,000 bucks,” Kiyosaki says. A recent Bankrate survey showed that most Americans do not have enough money set aside to cover an unexpected $1,000 expense.

It also spells trouble for those who want to enjoy their golden years. When the bubbles burst, Kiyosaki says, the stock market will crash. So those relying on their 401(k) plans “are toast.”

“We don’t have a retirement, our pensions are bust.”

Time to protect yourself

Given his grim outlook, it’s no big surprise that Kiyosaki is a fan of safe haven assets like gold and silver. Precious metals can’t be printed out of thin air like fiat money, and they’ve been helping investors preserve their purchasing power for centuries.

The price of gold is up about 8% year to date. Russia’s invasion of Ukraine has given investors a new reason to check out the yellow metal.

While Kiyosaki owns gold — he first purchased the yellow metal in 1972 — he prefers silver in today’s economic environment.

In a tweet in March, Kiyosaki revealed that he had purchased 2,500 American Silver Eagle bullion coins and offered his bullish reasons for doing so.

“Gold already moved up. Bitcoin still too high,” the tweet says. “Silver 50% below all-time high. Silver an industrial metal as well as $.”

More: 3 shockproof sectors to help protect your portfolio

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Bubble tactics

Bubbles tend to pop — eventually. When they do, many people see their wealth take a significant hit. But large declines also create opportunities for those who are willing to buy the dip.

“The good thing about a bubble is when they burst, everything goes on sale,” Kiyosaki says.

During the financial crisis of 2008, the author started “buying real estate at bargain prices.” Based on how much real estate has gone up since then, it’s fair to say that was a sharp move.

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Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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