8.7 C
New York
Thursday, March 28, 2024

Ron Paul: “I Would Not Be Shocked” If Stocks Crash 25% In 3 Months

Courtesy of ZeroHedge. View original post here.

Precariously overstretched equity valuations and the purportedly “data dependent” Federal Reserve’s insistence on raising interest rates could bring about the next market correction as soon as October, former Congressman Ron Paul said during a recent appearance on CNBC's "Futures Now."

The stock market's fragility – exposed by a series of volatility events in recent months – suggests that the Fed should tread carefully. However, policy makers, it seems, are focused on bracing for the next crash, and have telegraphed to the market that they will continue to hike rates, even as they struggle for justification.

All of this suggests that stocks could be in for a hard landing as soon as this fall, Paul said.

"I think that it will have a negative effect but I’m not going to say where it’s going exactly. I would not be shocked if in October if its 25% lower than it is now.”

When the next crash does arrive, Paul believes the Fed will be powerless to arrest it.

“I think the markets are very nervous for good reason: They don’t know what to expect and while it's unpredictable what the Fed will do, it’s also unpredictable how the markets will react.”

“Since they’re incapable of knowing what to do I don’t expect much good to come out of anything they do they cannot anticipate.  They haven’t been right on most of their projections and their planning. I don’t think the bubble atmosphere and the wonderful things happening on Wall Street will last forever. I think it’s coming to an end.”

The unemployment rate at 4.3% belies the fact that many of the jobs being created are low paying or part time, and often don’t offer benefits like health care.

“But I think the signs are that the economy is weakening even more so, and I don’t accept this idea that employment is magnificent and perfect and will last forever.”

“Some of these markets are already looking a little shaky. The Nasdaq looks a little shaky, the dollar looks a little shaky right now and on to bonds – those prices are going down too as interest rates are going up.”

Paul closes the interview by pointing out that the laws of economics haven’t changed since the last crisis.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,450FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x