Finance guru who’s beaten Wall Street for 25 years makes doomsday prediction about future of California

The financial guru who correctly predicted the disastrous collapse of Lehman Brothers in 2008 painted a bleak outlook for California’s future.

Robert Kiyosaki, the author of Rich Dad Poor Dad, is known for his hyperbolic predictions about the American economy. This time, he makes a bleak forecast for the country’s most populous state.

The problem is that California is going bankrupt,’ He wrote on X. “California is going to raise taxes and cut subsidies for the poor, prisons, environmental problems, and teacher unions. That means crime is going to spread because the police are going to be cut.”

He believes that even Americans who don’t live in the Golden State should be concerned about the outlook, since the rest of the country is in fine shape.

“Since California is a Bell Weather state and is going bankrupt, which states will follow suit?” he asked.

Is California Really Going Bankrupt?

Despite being the fifth largest economy in the world, according to Governor Gavin Newsom – a fact that has been disputed in the past – California is indeed facing a large budget deficit.

In December 2023, the state’s Legislative Analyst’s Office reported a massive $68 billion deficit due to a “severe revenue decline” in the 2022-2023 budget year.

In May 2024, a month before state lawmakers were due to approve a budget, Newsom announced the state was still $26.7 billion in the red, though the actual figure was closer to $45 billion. Associated Press reported.

The official budget was approved at the end of June, which included $16 billion in cuts.

Most of the cuts happened exactly as Kiyosaki warned, but it’s important to note that he made his predictions more than a month after the state budget was released.

California Governor Gavin Newsom signed a budget in late June that cut spending by $16 billion, even as the state’s deficit topped $45 billion

Spending on affordable housing programs was cut by $1.1 billion, while spending on the California Department of Corrections and Rehabilitation will decrease by $358 million.

Kiyosaki’s premonition about tax hikes was also reflected in the budget, as Newsom agreed to raise the tax on Managed Care Organizations (MCOs), which pay for Medi-Cal, the state’s Medicaid program.

As for Kiyosaki’s second claim, namely that crime will increase as a result of these policy changes, it is unclear at this point whether these matters will have a direct effect on that.

According to the California Department of Justice, the number of violent crimes will increase by 3 percent in 2023 compared to 2022.

But if you zoom out and compare the 2023 numbers to those from 2019, before the pandemic-related crime wave gripped the country, you see that violent crime is up 15 percent.

Pictured: A robbery at a Nordstrom store in Topanga, California, in August 2023, with the suspects casually walking out with their arms full of merchandise

A robbery was witnessed at this gas station convenience store in Oakland, California. About 100 people entered and emptied the shelves, but the police never showed up

Elderly woman brutally attacked in unprovoked attack in Oakland

This is the insane moment a brazen thief casually snatches a batch of iPhones from the shelves of an Apple store in Oakland, amid Newsom’s latest efforts to crack down on crime in the area.

Property crime is also on the rise: in Los Angeles alone, shoplifting has increased by 61 percent in the past four years.

Of all the major cities in California, Oakland is perhaps the worst off, with blatant criminal activity occurring all too often.

Among the most shocking events were the mass shooting at a Juneteenth party in Lake Merritt and an elderly woman who was attacked and robbed in the middle of the day.

Just a month ago, 100 robbers ransacked a gas station and emptied the shelves. Their actions did not result in the police arriving on the scene in time.

Days after the incident, Oakland police admitted that there are only 35 officers on patrol at any given time, for a city of more than 400,000 people.

Based on all this and more, Kiyosaki said he moved from California. He now lives in Scottsdale, Arizona.

Many Californians have followed his lead in recent years, with hundreds of thousands of them moving to Texas in search of lower housing prices and lower taxes.