What rally? Ron Paul still thinks there’s a 50% chance of a stock market crash
Not only is a market correction inevitable, but stocks could plunge as much as 50 percent, according to Ron Paul.
The former U.S. congressman and noted libertarian is standing by a correction call he made in August, when he said that all three major indices could lose as much as half their value within a year’s time. On Friday, stocks closed at or near record highs, extending a multi-week win streak.Article Continues Below
According to Paul, the main cause of this correction could very well be the Federal Reserve, which just days ago signaled its readiness to reverse more of its crisis-era loose monetary policies. Markets are near-certain the Fed will tighten rates at its next meeting in December.
“They’re in a quandary, they’re in a total dilemma,” Paul said on CNBC’s “Futures Now” last week. “I think what they’re doing is totally unmanageable, and everything they do contributes to mal-investment and distortion.”
Long a critic of stimulative monetary policies, Paul said that the apparent caution the Fed is bring to bear as it hikes interest rates betrays an unsure Fed.
And he warns that rates continue to be dangerously low.