A finance expert best known for Rich Dad Poor Dad is urging Australians to avoid investing in property, fearing a trade spat with China could spark a depression.
Bestselling author Robert Kiyosaki, who is close friends with Donald Trump, said Australia was 'dependent on China for their exports'.
Australia's exports to China are worth $135 billion a year but without that, the nation faced a prolonged economic downturn - with a 1930s-style depression more likely than a short recession.
'It's not good for Australia overall,' Kiyosaki told Daily Mail Australia from his home in Phoenix, Arizona.
An economic slowdown in Australia would be particularly detrimental to those with mortgages, particularly in Sydney and Melbourne, where median house prices stand at $1.026million and $818,806 respectively, going by CoreLogic data for April.
In his 1997 bestseller Rich Dad Poor Dad, Kiyosaki warned against investing heavily in real estate.
'A liability is something you have to pay for. If you bought it for say a million, and you got to pay for it and it drops to let's say $700,000, you're in trouble,' he said.
The Commonwealth Bank, Australia's biggest home lender, is forecasting a 32 per cent drop in Sydney and Melbourne house prices by 2023 in a worst-case scenario.
Kiyosaki agreed a double-digit drop was 'possible' but didn't nominate a figure on how far house prices could fall.
'It's going to be bad for someone who is over leveraged - your house is not an asset, a house is really a liability,' he said.
Australia's household-debt-to-income ratio of 186.5 per cent is the highest in the world after Switzerland.
During the 1990s, Kiyosaki owned two investment properties in Sydney's east at Rushcutters Bay and Bondi.
He's now advising against investing in real estate and instead advocates buying gold during a global crisis.
'I'm buying a lot of gold from your Perth Mint, I just bought 40 ounces of Aussie gold,' he said. 'Gold is money throughout the world, that's what I'm buying.'
Despite Australia being in danger economically, Kiyosaki said he preferred the Australian way of life and was considering moving across the Pacific Ocean. 'If America gets worse, I'm, emigrating,' he said.
Asked what he hated about the US, he replied: 'Violence, social unrest.' By contrast, he preferred the Australian attitude during a crisis.
'The Aussie spirit, I think is healthy - you have a kind of "don't give a s*** attitude, she'll be right", you'll fire back,' he said.
'It is really the lucky country and I say that with all sincerity.'
Kiyosaki said his disappointment at American gun culture had nothing to do with President Trump, a Republican who is running for re-election in November. 'First of all, he's a friend of mine and I'm not Republican or Democrat and I would vote for him if he was a Democrat,' he said.
Kiyosaki acknowledged President Trump wasn't the favourite against presumptive Democrat challenger Joe Biden. 'It's a dirty job, it's a dirty game, politics. I don't know what's going to happen - a lot of people are counting on him to check Trump out,' he said.
Kiyosaki co-wrote two books with President Trump, Why We Want You to Be Rich: Two Men, One Message (2006) and Midas Touch: Why Some Entrepreneurs Get Rich-And Why Most Don't (2011).
Unlike the US, Australia, still has low levels of government debt to gross domestic product - even with $320billion of COVID-19 fiscal and monetary stimulus measures comprising 16.4 per cent of GDP. Australia had a gross government-debt-to-GDP ratio of 27.7 per cent before the onset of COVID-19, compared with 107 per cent in the US as of December 2019.
Learn more about your rewards with Solomon Mines
Become a Member of Solomon Mines in 3 easy steps:
STEP 1: Fill out the Profile.
STEP 2: Purchase 2 grams (0,064 troy ounce) of gold bars. You can buy gold by using your bank account or credit cards (Visa, MasterCard, American Express, Discover).
STEP 3: Start receiving an extra income with Our Referral Rewards Program.