Former Republican congressman and two-time GOP presidential candidate Ron Paul warns that the stock market is healded for a plunge of 50 percent or more and there’s no way to stop it.
The former Republican congressman from Texas explained to CNBC that the recent jump in Treasury bond yields suggest the U.S. is barreling toward a potential recession and market meltdown.
"We're getting awfully close. I'd be surprised if you don't have everybody agreeing with what I'm saying next year some time," he recently told CNBC.
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.
“The recession is set in place by the inflation and the distortion of interest rates which have been going on now for too long, historically larger than ever before,” the former Republican Congressman from Texas said.
The seemingly endless bull-run stock market will also come to a sudden halt.
“We have the biggest bubble in the history of mankind,” he said. The bubble is bigger than ever before. There’s no avoidance of a correction. The only thing that makes a difference is how to handle it,” he said.
“Republicans and Democrats are alike, the don’t concern themselves about deficits. The only thing that they can do is print money and spend money and teach everbody to ignore the deficits,” he said.
“You can’t dispute fundamentals. You have to pay for people living beyond our means. People are in debt, the government is in debt. There will be a payback,” he said.
“You can’t disprove fundamentals. If you run up debt and print money and distort interest rates. You get distortions they have to be corrected and you can’t do that forever,” he said.
“We see little signs of that in people not buying as many cars, houses, rising mortgage rates,” he said.
"It can be pretty well validated by looking at monetary history that when you inflate the currency, distort interest rates and live beyond your means and spend too much, there has to be an adjustment," he said. "We have the biggest bubble in the history of mankind," he said.
"I know it's going to happen," Paul said. "It will come, and the bubble is bigger than ever before," 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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