Martin Dasko
5 min read
Personal finance author Robert Kiyosaki recently made a bold prediction on X about the state of the American economy.
The summary of the prediction is that hyperinflation will be financially devastating to millions of Americans. Another GOBankingRates article discusses hyperinflation, stating that the situation occurs when there’s a monthly inflation rate of 50% or more. However, due to the role of the Fed, the American economy has never faced such a situation, even when inflation reached as high as 23% in 1920.
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Below, we examine Kiyosaki’s serious claims and determine their accuracy based on expert insights.
“Hyperinflation is a state of extremely high inflation, typically reaching high double digits or triple digits,” said Marko Bjegovic, macroeconomist and founder of Arkomina Research.
Kiyosaki believes everything in the economy will become more expensive, from interest rates for borrowing money to basic necessities. Kiyosaki’s reasoning is likely that, with the Fed printing money, in his opinion, this could devalue the American currency and lead to higher inflation. It’s safe to say that Kiyosaki believes that inflation will become so exorbitant that the average American consumer will be unable to carry their debt moving forward and will have to declare bankruptcy.
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According to MoneyWise, Kiyosaki isn’t a stranger to making bold claims about a possible economic collapse. We reviewed some of these claims in the statement to try to verify their accuracy.
Bjegovic said there’s nothing to suggest that the U.S. is currently on a path to hyperinflation. “In that sense, the U.S. has never had hyperinflation since the Fed’s inception in 1913,” he added. “Hyperinflation has been commonly associated with countries experiencing extreme political or economic collapse, such as Weimar Germany (1920s), Zimbabwe (2000s), Venezuela (2010s), and Argentina (2020s).” Since the situation has never occurred in history, it’s challenging to expect it to happen this time around.
On a similar note, it’s worth noting that the current Consumer Price Index (CPI) stood at 2.3% in April, the lowest level since February 2021. While inflation peaked — as reported by CNBC — at 9.1% in June 2022, it never approached the 50% figure required for a hyperinflationary state. With inflation cooling down, it doesn’t appear that it will reach double digits anytime soon.
