Two-time GOP presidential candidate Ron Paul warns that the stock market is healded for a plunge of 50 percent or more and a meltdown to rival the 1929 crash.
"Once this volatility shows that we're not going to resume the bull market, then people are going to rush for the exits," Paul recently told CNBC.
The former Republican congressman from Texas explained to CNBC that "it could be worse than 1929."
Paul predicts the current market could plunge 50 percent because of the seemingly endless U.S.-China trade-tariff war.
"I'm not optimistic that all of the sudden, you're going to eliminate the tariff problem. I think that's here to stay," he said. "Tariffs are taxes."
The Newsmax Insider belongs to the Libertarian Party, a faction that emphasizes constrained government spending. He sees federal spending and monetary policy as dual forces inflating a market bubble.
Paul also repeated that the Federal Reserve's quantitative easing has caused the "biggest bubble in the history of mankind."
"It's so important to understand the original cause of the problem, and that is the Federal Reserve running up debt and letting politicians spend money," he said.
Not everyone is so pessimistic as Paul.
Larry Kudlow, director of the White House's National Economic Council, doesn’t see an end to the robust economic growth sparked by President Donald Trump’s strategy.
“I just don’t see where this is going to end,” the veteran financial guru and former Ronald Reagan adviser recently told Fox Business Network’s Maria Bartiromo.
“President Trump has opened up the economy. Lowered tax rates, deregulation, he stopped the war against business. He stopped the war against success,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
“Now the American economy is crushing it and it will go on for a while in my judgment,” said Kudlow, who served as the Trump campaign's senior economic adviser.
“If you can keep more of what you earn …. If your paychecks are bigger after-tax, after inflation, that goes on” to spark an overall robust economy that is “building new businesses, plants, equipment, technology, campuses, you name it,” said Kudlow.
“Why can't that go on for a good many years? We have not had that in almost 20 years.”
Kudlow’s praise of the U.S. economy comes just days after Federal Reserve Chairman Jerome Powell welcomed recent increases in Americans’ wages while expressing confidence that low unemployment won’t spur a takeoff in prices that would force him to hike interest rates aggressively.
“The rise in wages is broadly consistent with observed rates of price inflation and labor productivity growth and therefore does not point to an overheating labor market,” Powell said in a speech last week in Boston. “Further, higher wage growth alone need not be inflationary,” Bloomberg reported Powell as saying.
Ron Paul is a physician, author, and former Republican congressman. Paul also is a two-time Republican presidential candidate, and the presidential nominee of the Libertarian Party in the 1988 U.S. presidential election. His latest book is “Swords into Plowshares." For more of Ron Paul's reports, Go Here Now.
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