According to Ron Paul, the stock market will soon lose 50% of its value and there is nothing that we can do to prevent it. This market is in the “biggest bubble in the history of mankind,” and when it bursts, it could cut the stock market in half, Paul told CNBC’s “Futures Now” Thursday.
How soon is this supposed to happen?
“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 said Thursday on CNBC’s “Futures Now. ”
His remarks came as the benchmark 10-Year Treasury yield, which moves inversely to its price, rallied to seven year highs, intensifying fears over rising inflation. It may be beneficial for personal savings accounts, but it could deliver irrevocable damage to those in adjustable mortgages, or for auto buyers looking to finance a new vehicle.
“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. ”
Paul is a vocal libertarian known for an ardent grassroots fan base that propelled him to multiple presidential runs, as well as his grim warnings about the economy. Yet he has been warning investors for years that an epic drop of 50 percent or more will eventually hit the stock market. He predicted the February correction, but not in size and scope.
By spring, the correction was over, and the S&P 500 and Dow were hitting all-time highs again by August and September, respectively. The Dow registered its latest all-time high of 26,951.81 last Wednesday.
Paul acknowledges his prior calls for a downturn haven’t come to fruition. Yet, he points out it’s just a matter of time, based on the looseness of U.S. monetary policy since the 2008 financial crisis.
“I know it’s going to happen,” Paul said. “It will come, and the bubble is bigger than ever before.”