Wisdom of Rich Dad

Except for a handful of hedge funds and perhaps some gold coin dealers, few investors are able or willing to stand up during a recession and proclaim that they’re on a hot streak.

Borrowing the open from Charles Dickens’ A Tale of Two Cities, Kiyosaki uses the phrase, “it was the best of times, it was the worst of times,” to illustrate his belief that opportunity always exists, even when the typical barometers of growth and economic vitality suggest otherwise. (For the record, the line that follows is also telling: “It was the age of wisdom, it was the age of foolishness.”)

“I hate to say it but it has been the best three years of my life,” says best-selling author and financial literacy advocate Robert Kiyosaki. “I have never made so much money – America is on sale.”

This self-proclaimed “cash-flow guy” prefers investments that “throw money in my pocket every month.” He’s focused on real estate, oil, gold, silver, and natural gas. Given his belief that “commercial real estate is done and individual real estate is a mess,” Kiyosaki says 300-800 unit apartment complexes are “the hottest part of the market.”

When asked if dividend paying blue chip stocks meet his criteria for value and cash flow, the native Hawaiian says no, and refers to a cyclical prediction from a previous book that has called for a bottom in 2016. In the meantime, he has no interest in owning shares of Exxon Mobil (XOM) or BP (BP). Instead he prefers “buy private oil drilling projects, where the entrepreneur and I are good friends.”

Clearly, a man of his means, who has access to and writes books with Donald Trump, will have a different array of investment choices and opportunities available to him than the average Joe. For us mortals, his advice is 3-fold: Educate yourself, be smarter, and seek cash flow.

Kiyosaki has been a gold bug since his time in Vietnam 40 years ago. “If I have cash and I can’t figure a way to put it into real estate or my business, I hold it in gold and silver,” he says.

For those holding out hope that Ben Bernanke and the Fed will inject more dollars into the monetary system and markets, Kiyosaki says you’ve got it all wrong. “The Fed just printed like $4trillion dolllars in three years,” he says. “That wipes out the purchasing power of your money and your labor. So I think the Fed and the Treasury have basically ripped off the American worker.”

If he’s right, perhaps it’s time for a policy re-branding and would suggest, “Quantitative Teasing.”

Bank of America is considering softening its controversial policy of charging some customers for making purchases with their debit cards, according to a person familiar with the bank’s plans.

In September, the bank announced that it would begin charging most customers $5 a month if they used their debit cards to make purchases.

The fee, which would begin in January, set off a barrage of public outrage at the bank.

Now, under proposals being considered by the bank, Bank of America would offer customers new ways to avoid having to pay the fee.

Currently, only customers with certain premium accounts would be exempt from the fee.

Under the new plan, customers would be able to exempt themselves by having their paychecks deposited directly with Bank of America, maintaining minimum balances or by using Bank of America credit cards.

Bank of America’s retrenchment comes the same day that JPMorgan Chase decided not to impose similar fees. Chase’s decision follows a test of the fee it began in two states in February.

Wells Fargo also announced late Friday that it is canceling the debit card fee tests it was planning to introduce in five states. Customers in Georgia, Nevada, New Mexico, Washington and Oregon will no longer see a $3 debit card fee that was scheduled for statements beginning on Nov. 15.

Bank of America is not alone in announcing a charge for debit card purchases. Sun Trust and Regions Banks have all imposed similar monthly charges.

The banks’ decision to impose debit card fees is widely viewed as a response to the Durbin Amendment to the 2010 Dodd-Frank financial reform bill. Enacted in July, the provision reduces the fees banks can charge merchants for debit card purchases to 21 cents from 44 cents.

The debt ceiling fight didn’t end in default (thank god) and in all truth it didn’t even result in severe austerity in the near term.

The cuts next year aren’t actually all that dramatic, although they’re certainly very unhelpful at a time when the private sector is weak and deleveraging.

But the fight did reveal some bad news.

See, people talk about the Bernanke Put (will the Fed chair step in to ease conditions if things get bad enough?) but throughout history you’ve always had a Washington Put.

When things get bad, governments do stuff. That’s not just limited to America. There isn’t a government in the world that doesn’t try to ameliorate hard times, whether they be economic, natural disaster-related or something else.

The recent action in Washington really does call into question whether the Washington Put exists at all. One party was completely unyielding in its demands, and seemingly willing to seriously damage the economy to pursue its agenda. And it’s not just the debt ceiling where you see this. This FAA nonsense shows again a total inability to do basic, obvious stuff.

The Republicans have even shown an unwillingness to deal with actual natural disasters. Remember when Eric Cantor said there would be no relief for Joplin Missouri unless there were budget offsets found?

Even if you agree with the GOP’s hardcore stance, you must admit that when disaster relief comes with conditions, the usual buffers for the economy are eroding.

After Congress gets back from recess, there are a number of things which, theoretically, should be possible and palatable, including a continuation of the payroll tax holiday, and other jobs-type bills that would normally be agreeable. But the situation in Washington does not look as though it will be conducive to any of that until at least January 2013.

And if things get really bad — you know, if the banking system starts creaking again — you can forget about getting any more help there.

The Washington Put is no more. The market is realizing that, and has been since that Friday when talks first collapsed between Obama and Boehner.