man fingers crossed behind back

Crooks and Thieves

When I published Rich Dad Poor Dad in 2001, I said your house is not an asset, it’s a liability. The so-called experts mocked me. Now that the housing market has been all but obliterated, I’m sad to say, I’m the one with the last laugh.

When I published Rich Dad’s Prophecy in 2004, I said that the stock market was going to crash. Once again the so-called experts ridiculed me. Now that the stock market has recently lost more than 50 percent of its value and is still down over 20 percent from its all-time high, I’m sad to say again, I’m the one with the last laugh.

And finally, when I published Conspiracy of the Rich: The 8 New Rules of Money last year, I said that the Great Recession wasn’t an accident but exactly what the big banks and ultra rich had planned. And you know what happened? The so-called financial experts derided me. One more time, I’m sad to say, I’m the one with the last laugh.

Financial Fraud

Here’s the recent headline from The Guardian, “Now we know the truth. The financial meltdown wasn’t a mistake—it was a con“. If you’re part of the Rich Dad community, this isn’t news to you. But sadly it’s news to most people. In the article writer Will Hutton states, “The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due to the new financial complexity offering up the opportunity for widespread, systemic fraud.”

In other words, a bunch of crooks and thieves running some of the biggest banks in the world used smoke and mirrors financial tools to rob the middle-class and defraud the world. At the center of this ring of thieves is Goldman Sachs, which the SEC recently brought a lawsuit against for alleged fraud—for telling their investors everything was rainbows and sunshine while secretly preparing to cash in big as the economy crashed.

People have been hanged, quartered, and drawn for less.

Tip of the Iceberg

But the problem isn’t just with Goldman Sachs, they’re just the tip of the iceberg. As Hutton goes on to say, “Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex chair of Anglo Irish Bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks—huge lenders in Britain—was handed to its public prosecution services. A court-appointed examiner found that collapsed bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was—accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters. In Switzerland UBS has been defending itself from the US’s Internal Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come…beneath the complexity, the charges are all rooted in the same phenomenon—deception.”

Pulling the Wool

Deception. The tool of the conspiracy of the rich. How do they achieve this? How do they pull the wool over our eyes?

It’s simple. They’re banking on our financial ignorance.

The Goldman Sachs case is the worst of all because it so blatantly preyed on the financial ignorance of its investors by creating a fake investing tool packed to the gills with toxic collateralized debt obligations (CDO) so that other smarter, in-the-know investors could enjoy the windfall when the house of cards fell. In the process, they helped to bring down most of their competitors—who were equally deceitful but not as smart—and collapse the world economy.

More of the Same

These new revelations are setting the stage for an epic battle between big banks and impotent governments dealing with angry citizens. It will be interesting to see how this plays out. My hunch is not much change will happen. One or two people will take the fall, becoming the scapegoats of a morally bankrupt system that will find new, more exotic ways to rob the financially ignorant.

But the US government will toot its horn to try and keep you and me quiet, and to practice their own form of deception by convincing those who are financially ignorant that everything is OK now that big brother has stepped in.

Here’s why I don’t think there will be much change even with the SEC lawsuit. President Obama and the SEC aren’t nearly as powerful as the world’s banks, the Fed, and the ultra rich. Not only that but the two are inseparably intertwined. As you may know from Conspiracy of the Rich, Goldman Sachs has more people controlling the Fed, US Treasury, and Wall Street than any other bank. In that book I go into deep detail about the incestuous relationship between the Fed, US government, and Goldman Sachs.

The US government, however, may be underestimating the anger that will rise as this Goldman Sachs case moves forward. Already, I’ve seen many profanity-laced, extremely angry messages from good hard-working Americans who rightfully feel defrauded. It will be interesting to see how the American people’s anger plays out as more revelations of fraud become public.

Get Angry, Get Smart

Here’s my advice. Get angry, but also get smart. While others are only complaining and playing the victim, you can begin to increase your financial education and move ahead of the curve. As I’ve said before, this is the greatest wealth transfer in history. This is your time to become rich—if you know what you’re doing.

And you don’t even have to be a crook and thief to do it. You just have to be smart.

Original publish date: April 20, 2010