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Monday, March 2, 2015

He Said "Savers are Losers" ???

Yes, it was one of the days....I was reading one of my fave authors who also happens to really tick me off on a regular basis....But as I said in a previous blog post, I usually figure out I've found a great author when they peeve me.

So, let me keep it short and sweet. Robert Kiyosaki said in his book "Unfair Advantage"
that "Savers are losers"....and of course that irked me somewhat. So why would he say that?
Why would a habit that has been forged and tried and true for centuries now suddenly NOT make financial sense any more? Well, Robert's explanation of this state of affairs includes his summary of how money is not really money anymore.....it's actually just debt.  The U.S. dollar was taken off the gold standard in the 70's and ever since then, the governments have used a dozen different ways to excuse the practice of simply printing money out of thin air. All this money does not represent real wealth....rather it represents more debt.

Therefore, Robert made the bold statement that it doesn't actually make any financial sense to "save" money like how we used to stuff our mattresses with it.....because money is no longer real money anymore.

Then, lo and behold I came across an article in the Globe and Mail for Feb 21, 2015 written by John Heinzl  entitled "Who would buy a bond with a negative yield?" in which he explains that literally Robert was SOOOOOOOO right ! Right now there are government bonds being sold in the Eurozone countries of
Germany, Denmark, The Netherlands, Austria, Switzerland and Sweden with up to five year terms, that actually have a NEGATIVE YIELD!. Therefore, one who attempts to save their money with one of their government bonds would actually LOSE money and owe money to the institution that issued the bond!
Sounds outrageous doesn't it? Boy, Robert really saw that one coming! Apparently, John Heinzle writes, fears of deflation along with stagnant economic growth has forced the creation of these negative yeild bonds.
What is perhaps entirely more shocking is that people are still buying them!!!

Thank you Robert.....my irked response to your books, is well worth it....you've proved your point.

Carla