(upbeat music)
- Hey guys welcome to Millennial Money.
I'm Alexandra Gonzalez,
and we're in for another
interesting episode.
And of course it's featuring
the one and only: Robert Kiyosaki.
We all know Robert as
the best selling author
of the number one personal
finance book of all time,
Rich Dad Poor Dad.
But I'm happy to announce
that he just released
his new book, FAKE:
Fake Money, Fake Teachers, Fake Assets.
You can get your copy
by following the link
in the description below.
One thing millennials
are craving is the truth,
and Robert's gonna give us just that.
Hopefully, he can clear some
things up in our discussion,
because I'm sure we've all wondered
how money is even created.
- And the way that money
is created, '71 and today,
is first you have the U.S. Treasury.
- Okay.
- Okay, and then you have
the Fed, the central banks,
the Bank of Japan, Bank of Tokyo, and on.
And then you have the big
banks: Wall Street banks.
So this'll be Goldman-Sachs, Wells Fargo,
Morgan Stanley and all this.
So the way money is created
is the U.S. Treasury
creates a bond.
Okay, it's a IOU from guess who?
The tax payers. That's why
they screw the working class.
So this bond goes to the Fed,
or the European Central
Bank or the Bank of Japan.
This is fake money today.
And then this guy send
money to the big banks.
This is called quantitative easing,
it's also called printing money.
Okay, they call it quantitative easing.
And this money then goes to the rich.
God Bless America!
I just love this system, you know?
The only way this money comes out...
- Oh, through debt.
- Is debt.
So, I go in, so when the
markets crashed in 2008,
the whole economy almost came down,
Kim and I borrowed 300 million dollars.
The average guy can't borrow a million,
but if you had the right
financial education,
which all the cash flow game is about,
then I can borrow as much money as I like.
So today Kim and I are at
about 600 million in debt.
The average guy goes, "That's terrible!"
But as you know from Rich Dad Poor Dad.
There is good debt and...
- Bad debt. Yeah.
- Well, this is good debt. Okay?
- Isn't it crazy, how the
rich just keep getting richer?
Let's find out how!
- This is what makes the rich, rich.
And debt is tax free.
If you borrow, if you
work for 300 million,
you would pay 150 million in taxes.
- Okay.
- Okay, if I borrow 300
million, I pay nothing in taxes.
And the reason debt is not taxed
is because this is how money is created.
If I don't borrow the money,
there is no money created.
So then this flows into the economy.
(marker scribbles)
And this is real economics.
They don't teach you this in school.
- No, they don't.
- Okay, and so when it
flows into the economy,
the way that bond gets
paid for is via taxes.
So this is the poor, and middle class.
They pay the taxes,
and that pays for this.
Ta Da! Yes, you have been screwed!
- That's crazy!
(laughing)
- So, in 1971, Nixon took the
dollar off the gold standard
and Robert explains exactly what happened
as a result of that.
- Anyway, this is kind of the big picture
of what happened after 1971.
The moment they took the
dollar off the gold standard,
what happened was, these
guys started to print money.
And what did the school tell you to do?
Get a job and work for
money and pay taxes.
They have to, those fake
teachers have to do that,
because other wise they
can't pay for that bond.
It's completely, our
school system is so fake.
It's more fake than those
fake plastic plants there.
(both laugh)
And these teachers, bless their hearts,
they don't know any of this.
Because they want their pension,
and their pensions are going broke here.
Teachers pensions, firefighters pensions,
and police pensions are going broke.
Social Security is bust.
You know it's, it's a tragedy, you know.
It's fake, fake money.
You know, fake teachers, fake assets.
- Socialism is a buzz word we're hearing
all over the media.
And we'll be diving into that in a minute.
But first, Robert explains what happens
when you just keep printing
and printing money.
- First of all, there is a
time and place for socialism.
Socialism is being kind,
and helping your friends.
Socialism is giving people fish.
Capitalism is teaching people to fish.
So those guys are socialists.
This is capitalism.
I would rather teach you this,
so that you know how to do this.
One last point before I explain AOC
and those socialist communists
who are running for...
Like Obama and Hillary.
Man they are...
I'm not Republican or Democrat,
I just don't like it
when people lie to us.
You know Trump is my friend,
but he opens his mouth
too much. I understand.
But this is the system he follows, okay,
so if you hate Trump I understand.
What happened in 1971 is a point of fake.
- Okay.
- Was that they could print as
much of this as they wanted.
To solve their problems,
they just printed it.
They just kept printing it.
- Mm-hmm.
- And the economy went like this.
So a guy of my generation,
the baby boomers had it easy.
You know, it was really easy
for a baby boomer to get rich.
- Yeah.
- Your generation, there is a word for it.
You been you know what.
- Very accurate.
- The economy is about to
come this way, you know that.
- Yeah.
- Because they are printing it.
So the mistake that schooled us,
they tell you to work hard for money.
Why would you work hard for
money when they're printing it?
- [Alexandria] Mm-hmm.
- Why would you save money
when they're printing it?
And why would you save it
when interest rates keep coming down?
That means the value of
money keeps coming down.
- Mm-hmm.
- And our schools systems
don't tell you that.
Work hard, save money, get out of debt.
You know, save it. And
you're being screwed.
That's fake money, fake
teachers, and fake assets.
So before I get into
it, this is capitalism.
The problem is most school teachers
are communists and socialists.
They're good people, don't get me wrong.
- [Alexandria] Mm-hmm.
- Most of my family are
communists and socialists.
They want the government
to take care of people.
And that's AOC, and
that's Elizabeth Warren,
and Bernie Sanders.
There's nothing wrong with that.
But, every system where
the people are not educated
collapses. Look at Venezuela right now.
- Oh my god, it's terrible.
Next, Robert explains how the
monetary system would look
if the U.S. was a socialist society.
- This is capitalism.
I love this system.
I make a lot of money,
I use a lot of debt,
I pay enough taxes.
It's a wonderful system.
(laughs)
But this is socialism
here. It's very similar.
So the same thing, is you
have the U.S. Treasury, right?
And then you have the
Fed, or the Central Bank,
and then you have the big banks.
So, what socialism is,
is they want to print
write a bond, they print the money,
but don't give them the money.
Ta da!
And they want to give it to the...
That's socialism. That's also communism.
So it goes to the people,
today they have UBI,
universal basic income.
You know it's this guy Chang
out of California hard-core
commie. Asian guy.
"Give everybody a $1,000 a month."
That's not going to fix
the problem, you know.
And you get free education,
free health care.
And I agree with this stuff,
- Mm-hmm.
- But it's not going to fix the problem.
And you keep doing this here,
and the rich sit out here
and they don't really care,
because they are on a
different system anyway.
The trouble with this here
is they have to keep printing money.
- Listen up, millennials!
Because we are about to
touch a sensitive topic.
We're here to discuss how exactly we got
into the student debt crisis mess.
- So every student loan
person should know this.
Is that in 2009, President
Obama changed the system.
Up until 2009, the banks
paid the student loan.
The banks created it, so
the money went this way.
So what happened is,
what Obama did was he cut these guys out,
because he is a socialist,
communist, and all that.
And then it became student loans
became an asset of the U.S. Treasury.
So the Treasury now creates this money.
The banks don't get any of this money.
So why did Obama do that?
Today this is $1.6 trillion
dollars in America.
It is the biggest asset
of the U.S. Government,
is student loan debt.
The worst type of debt possible.
So what the socialist communists did
was they screwed the students.
- Mm-hmm.
- The capitalists screwed
the old guys, like me,
through pensions and 401k's and IRA's,
and then they screwed you
guys through student loans.
- In this next clip, unfortunately,
we talk about what is happening
right now in Venezuela,
and what's happening in America.
And that's exactly what we're seeing
in Venezuela right now.
I mean, it was the richest country.
- It is still.
- It is. But, and then,
I have all my friends
and their parents, they left Venezuela
with their businesses,
because the government
wanted to tell them how much
to price their products,
and they weren't able to
provide for their family
in that situation.
- [Robert] Right.
- So they left, and now
all that's left is poverty.
You know, they're killing each other
over anything that's free,
so they didn't learn to
work for their money.
- Nope.
- But they wanted equality, you know?
And now...
- And you know who sent
teachers into Venezuela?
- [Alexandria] Who?
- Cuba.
They teach communism.
The same thing happens in America.
We're teaching communism today.
- [Alexandria] Mm-hmm.
- And that's why AOC, Beto
O'Rourke, and all this,
is they want to get rid of these guys.
And I don't blame them,
because they are rich are getting rich.
- Yeah.
- But they want to give it
straight to the people though.
So there're two things that happens.
Generally, this goes into hyper inflation.
This is what happened in about 1920.
And that brought Hitler
to power, and all this,
and they just started
printing money. Germany did.
So we're going here, or we're going here.
And the reason I teach,
and I say what I do.
Ya know, there is a place for this.
Most of my family are here.
Most of my family are
highly educated people,
really good people.
(fingers rub)
Nothing. So I am gonna have to pay.
So, I don't blame people, you know,
health care is a huge expense.
When they say that there is
no inflation, that's not true.
Food has gone up, housing's
gone up, education's gone up.
But they lied, the government lies to us.
- All right, guys! Brace yourselves,
because we are about to
see how Robert explains
what's going on in the
economy with a balloon.
- If our economics teachers
were real teachers,
they'd be teaching bubble economics.
Because this is bubble.
So the reason fake starts in 1971,
rather than work for money,
the U.S. Government and the
Central Bank could print money.
So this is what happens, after 1971...
(balloon inflates)
"Oh we have a problem!
We don't have to fix it."
(balloon inflates)
"Oh, we can just keep
printing more money."
(ballon inflates)
"Everything was fine."
In '87 there was a stock market crash.
So, what happens when the
bubble goes like this?
Everything looks good.
Stock market goes up, jobs are plentiful,
housing is plentiful, people are happy.
So '87 the market crashed,
but nothing happened.
There was no depression,
there was no recession.
Because they could...
(balloon inflates quickly)
Until the year 2000
when the .com went boom.
(balloon inflates)
And so it almost,
(balloon deflates)
so they stopped it.
And so we entered a kind
of global recession.
And rather than fix the .com mistake,
because they just printed more of it.
(ballon inflates)
So from 2008 'til today,
ten years later...
(balloon inflates)
rather than teaching us,
and fixing the problem,
they just kept printing more money.
- [Alexandria] Yeah.
(balloon inflates)
So the stock market
gets bigger and bigger,
there's more money in the economy,
the stock market is floating.
You know, you got real estates floating,
businesses are borrowing
money. Everybody's happy.
And the government is going broke,
because our debt to GDP ratio
is now about a 109 to 1.
We can't sustain.
So our debt to GDP, I
mean the amount of debt
we're carrying is going to keep going up.
Because old guys like
me have no retirement.
And young guys is like you have no future,
because you're stuck in debt.
Because in 1971, the dollar became debt.
- Yeah.
- But they don't teach you that. So...
(balloon inflates)
And now if we keep printing
money to fix the economy,
what's going to happen?
- It's going to pop.
(balloon pops)
Oh my god! That scared me!
(both laugh)
That's exactly what's going to happen.
- And that's the future.
- Oh my goodness.
In this last clip, we
wrap up our discussion
about the current economy.
Let's listen.
- So I think to solve the problem,
because there's no financial education,
they're just going to print more money.
- [Alexandria] Mm-hmm.
- And if it deflates a little,
that's called a recession.
If it pops, that's called a depression.
And, if we don't make
changes pretty quickly,
just like the environment,
it's like many problems we're facing.
If we don't make changes
quickly, we collapse.
So that's why I created the CashFlow game.
That's why I wrote
Fake, Rich Dad Poor Dad,
we do this show, and that's
why I love Millennial Money,
because I get to talk to people like you.
- Yeah.
And they learn a lot, too.
I think that is enough for today!
But comment below on what you really think
about socialism vs capitalism.
Subscribe to survive this crazy world.
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I'll see you guys on our
next Millennial Money.
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