What Schools Will Never Teach You About Money By Robert T. Kiyosaki

October 20, 2005:
“House prices have risen by nearly 25 percent 
over the past two years. Although speculative activity has increased 
in some areas, at a national level these price increases largely reflect 
strong economic fundamentals.”
to Japan, causing a boom and then a bust in 1989. The money then 
flowed to Mexico, causing the Mexican peso crisis in 1994, the Asian 
crisis in 1997, and the Russian ruble crisis in 1998.
Arrogantly, American bankers and Wall Street laughed at the rest 
of the world, since they believed the rolling boom-and-bust bubble 
would not affect the United States. 
During President Clinton’s era (1993-2001), the U.S. government 
balanced its budget, so the United States did not need to borrow any 
money. This was bad news for the bankers of the world who then 
needed to find more borrowers, borrowers who could borrow trillions 
of dollars. They found big borrowers in Fannie Mae and Freddie 
Mac, which are GSEs, Government-Sponsored Enterprises, U.S. 
quasi-government agencies that were anxious to borrow money. They 
borrowed $3 to $5 trillion of this hot money and loaned the money 
out to almost anyone to buy a new home or refinance their home. The 
real estate bubble in the United States had begun.
When Fannie Mae and Freddie Mac and their executives came under 
investigation, they stopped borrowing this hot money. Again, this 
ocean of counterfeit dollars had to find a home. In the late 1990s, 
government officials such as Clinton and Fed Chairman Alan 
Greenspan changed the rules for the biggest banks, such as Goldman 
Sachs, Bank of America, and Citigroup, which began taking in this 
money. Immediately these banks needed to find someone to take this 
money off their hands. As you know, cash must keep flowing.
To help the banks and Wall Street move this hot money, mortgage 
brokers working for companies such as Countrywide Mortgage started 
looking for anyone who wanted to borrow money. They went into 
the poorest neighborhoods in the United States. Millions who did 
not have jobs or credit were offered “NINJA” (No Income, No Job 
or Asset) loans, and soon they too were living the American dream. 
Unfortunately for many, it was a dream they could not afford. The 
subprime mortgage bubble grew into a massive balloon.
Once these subprime mortgages were processed, the big banks and 
Wall Street packaged this toxic debt and sold the debt as assets. These 

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Chapter Three
Unfair Advantage
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rolling booms and busts that started after 1971 with Arab petrodollars 
continue. Hot money looks for people and institutions that can 
borrow more and more money. Ever since 1971, the world economy 
cannot grow unless people borrow money. 
Today there are trillions of dollars (and other fiat currencies) 
looking for a home, which is why interest rates for borrowers are low 
and interest rates for savers are also low. Simply put, the financial 
world loves debtors and punishes savers.