"Why the US and Zimbabwe heading for the same hole."

It seems after a terrible year of pandemic and paralysis people around the world are feeling good enough to put more rings on fingers and necklaces around necks.

I always enjoy reading the  market analysis from the World Gold Council. The latest figures for Q3 show demand worldwide dropped by 7% to 831 tonnes. The fall has been caused by a decline in interest in ETFs – that is, exchange traded funds that are a popular and low-cost way to invest. Gold ETFs – where you don’t actually have to physically own the yellow metal – are a good haven for investors when the world is going wrong. Gold ETFs can often rise when the rest of the markets are falling.

A sign that people may be feeling a bit more optimistic about the world is that they are feeling to good enough to adorn their fingers and necks, including  those of others, with gold.

Demand for gold jewellery rebounded by 33 % in  Q3,against the same period last year, to 443 tonnes, according to the WGC. That is some pile of rings and necklaces. To put it in perspective that is nearly three times that produced every year by Africa’s biggest gold miner – Ghana. It is more than four times of the gold dug up by veteran producer South Africa – the second largest miner of the yellow metal on the continent.

There are also signs that more people are stacking gold away. Demand for gold bars and coins also shot up by 18% to 262 tonnes in Q3.

All of which sparked a memory of interviewing Robert Kiyosaki, back in 2019. The  author of Rich Dad, Poor Dad has sold more than 30 million books and travelled extensively in Africa.

As an author, He clearly has an appetite for risk he as he had just co-authored a book with former US President Donald Trump.

“I think he gets a horrible press. It is self inflicted wounds because every time he opens his mouth he says he things he shouldn’t say…In my opinion he is doing a lot of things that other countries should be doing,” says Kiyosaki.

Surprised ? Yes, I was, but the next answer knocked me off my chair.

“The future of the US is exactly the same as Zimbabwe – printing too much money,” said Kiyosaki.

“Zimbabwe couldn’t pay the pensions. American pensions are bankrupt right now, teachers’ pensions are bankrupt, firefighters, police pensions bankrupt. So, America is just going to keep printing money. That is how America and Zimbabwe are the same.”

As an investor Kiyosaki wants to avoid risk. He  believes people shouldn’t look to governments to look after them.

“What do schools teach us about money ? Nothing .We count on the government to take care of us. I am an entrepreneur, I don’t want the government to take care of me. So, I think we should be more resilient and self- reliant in preparing for our future. As my friends in Zimbabwe found out, changing Mugabe didn’t change a damned thing.”

Anyway, Kiyosaki believes that one of the ways to be more self-reliant is to own gold.

Kiyosaki bought his first gold in 1972. It was a South African Krugerrand for $40.

“I still have the coin and now it is it and now it is  worth $1400 – so did the coin get bigger in value or did the currency get smaller ?”

Now, as I countered to Kiyosaki on the day,  not all of you entrepreneurs in Africa can afford gold coins. Maybe, if you make money, you should think about it.