Robert Kiyosaki Warns of 1929-Like Market Crash as Moody’s Downgrades U.S. Credit

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Is America Headed for a Financial Faceplant? 🤔💸

Ah, Wall Street! That grand stage where fortunes are made and lost faster than you can say “economic downturn.” On a rather gloomy Monday, May 19, the financial wizards at Moody’s decided to play the role of the party pooper by downgrading the U.S. government’s credit rating by a notch. Why, you ask? Well, it seems our dear nation is sitting on a mountain of debt that’s ballooning to a staggering $36 trillion. Yes, trillion with a “T,” which is a number so large it makes even a dragon hoarding gold look like a penny pincher.

This downgrade sent investors into a frenzy, triggering a sell-off that could make a toddler’s tantrum look like a calm day at the park. The alarms were ringing, and not just because someone forgot to pay the electric bill. Financial author Robert Kiyosaki, ever the harbinger of doom, saw this as the opening act of a much darker play.

Markets Rattle as Moody’s Slashes U.S. Credit Rating

Moody’s, the last of the major rating agencies to join the downgrade party, decided to cut the U.S. credit rating from Aaa to Aa1. Apparently, they were concerned about ballooning deficits and rising interest costs that threaten America’s ability to manage its debt. Investors, in a fit of panic, watched as Nasdaq-100 futures plunged 1.6%, S&P 500 dropped 1.2%, and Dow futures fell 0.8%. It was like watching a game of Jenga where the tower was made of financial institutions.

Meanwhile, bond yields surged, with the 30-year Treasury finally piercing the 5% mark for the first time in years. This was a clear sign that investors were feeling about as secure as a cat in a room full of rocking chairs when it came to lending to the U.S.

Just a week prior, Wall Street had been basking in the glow of one of its strongest weeks in months, thanks to easing U.S.-China tensions that sent tech stocks soaring. But alas, those gains now seemed as fragile as a soap bubble in a cactus patch.

Robert Kiyosaki’s Stark Warning: ‘Deadbeat Dad’ America

Enter Robert Kiyosaki, the financial educator who has a knack for comparing the U.S. to a “deadbeat dad” borrowing recklessly with no intention of paying it back. He warned that this downgrade could lead to higher interest rates, a recession, rising unemployment, potential bank failures, and possibly a crash that would make the Great Depression of 1929 look like a minor inconvenience.

Kiyosaki, who foresaw this scenario in his 2013 book Rich Dad’s Prophecy, has long urged people to escape the trap of job security. Instead, he advocates for embracing entrepreneurship, investing in cash-flowing real estate during downturns, and hoarding real assets like gold, silver, and Bitcoin. “A depression can be the best time to become rich,” he proclaimed, encouraging folks to think like entrepreneurs rather than employees clinging to a paycheck and a shrinking 401k. Because who needs stability when you can have adventure?

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It’s all Politics….

I think the main reason the markets did not react more sharply to the Moody’s downgrade is that it’s obvious the U.S. government will never honestly repay its debts. Default or inflation is inevitable. Credit ratings are basically irrelevant. They reflect politics, not economics.

— Peter Schiff (@PeterSchiff) May 19, 2025

On the flip side, Peter Schiff dismissed Moody’s downgrade as largely irrelevant, claiming that the markets didn’t react strongly because it’s already clear the U.S. can’t repay its debts. He warned that default or inflation is as inevitable as taxes on a paycheck and argued that credit ratings are more political theater than economic reality.

Crisis = Opportunity

With Federal Reserve officials set to speak this week, investors will be watching like hawks for signals on how policymakers interpret the downgrade and its potential influence on interest rate decisions. For Kiyosaki, however, the message is clear: those who prepare wisely, with real assets and an entrepreneurial mindset, may just turn this crisis into a golden opportunity. Or at least a shiny brass one.

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FAQs

What does Moody’s downgrade mean?

It signals increased risk in U.S. debt repayment, raising borrowing costs and shaking investor confidence. Think of it as a warning sign that says, “Caution: Financial Cliff Ahead!”

Was the U.S. credit rating downgraded?

Yes, Moody’s downgraded the U.S. credit rating from Aaa to Aa1 in May 2025 due to rising debt concerns. It’s like getting a report card with a big red “C” on it.

When was the last time Moody’s downgraded the U.S.?

The last downgrade was in May 2025, marking Moody’s first cut in over a decade amid mounting debt worries. It’s like a bad sequel nobody asked for.

Will the U.S. credit downgrade lead to a recession?

Experts like Kiyosaki believe it could, as higher interest rates may trigger job losses, bank issues, and slower growth. So, buckle up, folks; it’s going to be a bumpy ride!

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2025-05-20 09:11