Ron Paul: ‘Biggest Bubble in the History of Mankind’ Is About to Burst

July 18, 2018 in News by Slad

 

Source: Western Journal | By Jack Davis

Vast economic misery is coming to America, former congressman and libertarian icon Ron Paul is predicting.

“I see trouble ahead, and it originates with too much debt, too much spending,” Paul said last week on the CNBC program “Futures Now.”

Although the stock market has roared to new heights since the election of President Donald Trump, Paul called the soaring market “biggest bubble in the history of mankind.”

He predicted that when the bubble bursts, the market’s worth could be cut in half.

“The Congress spending and the Federal Reserve manipulation of monetary policy and interest rates — debt is too big, the current account is in bad shape, foreign debt is bad and it’s not going to change,” he said.

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Paul said Trump was partly to blame for the rising debt.

“We have a president who likes to spend. He is not concerned about the deficit,” said Paul.

The Fed also is to blame, Paul said.

“The government will keep spending, and the Fed will keep inflating, and that distorts things,” he said. “When you get into a situation like this, the debt has to be eliminated. You have to liquidate the debt and the malinvestment.”

Paul, who ran for the Republican presidential nomination in 2008 and 2012, and retired from Congress in 2013, has been predicting a market collapse since December 2017, when he said inflation would bring down Wall Street.

Not everyone agrees with him, including Joseph LaVorgna, chief economist at Natixis, a French corporate investment bank.

“Is there inflation of financial assets? Yes. Pick your choices: Equities, bitcoin and the art world. We see that. Everybody sees that. It’s obvious,” LaVorgna said, according to CNBC.

“Is there inflation of goods and service prices? Not much. The inflation rate has constantly been below 2 percent for the vast majority of this business cycle. … But what is the Fed going to do? Raise rates because a da Vinci painting sold for a lot of money? That’s crazy,” he said.

Mark Zandi, chief economist at Moody’s Analytics, said Paul was half right.

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“Inflation and rapidly rising asset prices are two different things. But I do sympathize with (Paul’s) concern about overvalued stock prices and the frothy conditions developing in other asset markets, albeit not to nearly the same degree,” Zandi said. “So he is wrong about inflation, but he is right to worry about overvalued asset markets.”

Economist Robert Wiedemer, who in 2006 foresaw the 2008 economic collapse, has also been sounding warnings.

“The data is clear, 50 percent unemployment, a 90 percent stock market drop, and 100 percent annual inflation . . . starting as soon as next year,” he said while promoting his new book, “Aftershock,” according to Newsmax.