Finance Expert Who Predicted Lehman Collapse Warns California is ‘going bust’

He recently sat down with Fox News to discuss the grim fate of the financial sector in California. He specifically notes the amount of people leaving the state as a reason why state might soon fall apart.

He appeared on the popular talk show, “The Big Money Show,” on Monday to discuss the issues with the Golden State.

In 2008, the Rich Dad founder predicted the Lehman Brothers collapse, which was fuelled by an overinflated housing market. Big bans were lending mortgages that couldn’t be repaid at record numbers. An economy needs a healthy level of customer spending to survive.

He shared with his followers that “California is a BELL-Weather state. That means what happens in California happens to the rest of the US.” He predicts that an eminent collapse in the west will reverberate throughout the rest of the country, causing financial troubles for everyone.

Because of the outrageous housing costs, rent, and high levels of crime and homelessness, people are leaving the state in droves. Since the beginning of the COVID-19 pandemic, the state has been steadily losing residents, causing a massive economic shift in the country.

Oracle, Microsoft, Tesla, X, SpaceX, and others have jumped on the train to move to a state with cheaper housing costs and lower corporate tax rates.

“California will begin raising taxes and cutting subsidies to the poor, to prisons, environmental problems, and teachers unions. That means crime will spread as police will be cut. Since California is a Bell Weather state and is going broke, which states will follow?” he wrote in the post.

In a survey this year, more than 86% of business owners in California said that crime has increased in their area, while 67% said that they considered moving their company’s headquarters out of the state.

“You know, I think it’s interesting that one of the greatest entrepreneurs of our time, Elon Musk, is leaving. What does that tell you?” he asked.

Even more, low minimum wages mean that many must work multiple jobs and cut back on essentials to keep a roof over their head. When people have less cash to spend, businesses and banks often have a hard time keeping up, which has created a minor recession in the market.

Excerpts like Kiyosaki point to the issues currently occurring with Chinese and Japanese banks. Both countries have massively raised the interest rates, causing an inability for most residents to buy homes.

Although they mentioned Japanese banks as a reason that a full crash is coming, they also noted that turbulent markets across the globe are losing points. The US job market isn’t doing terribly, but it is giving off warning signs. Many big tech companies are laying off thousands in hopes of using cheap AI to fuel their business.