Ron Paul: Stocks Are In a Bubble and Will Crash

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Ron Paul, the former U.S. representative from Texas and perhaps America's most popular libertarian voice, has long said that the nation's monetary and fiscal policies would result in massive inflation. According to the common measures of inflation, this has not yet occurred. But Paul maintains that the inflation he has warned of has indeed come to fruition in asset prices, and that once it unravels, a market crash will ensue.


"I think there's plenty of inflation, but my definition of inflation is a little different than the rest, because I think prices going up in the different areas is a consequence of inflation," Paul said on CNBC. "There's a lot of inflation in the stock market. I think there's a bubble there."


He says that what's occurring asset prices simply don't comport with what's happening in the economy.


"The growth isn't there. The only thing that grows is the debt, and just think about how much money they have to create value in the stock market," he said. "The unemployment is very, very bad, despite some of the optimism that is expressed with Wall Street, but that's all deception. I think you still have to see a healthy economy and people aren't complaining about structural employment, which is really insidious."


But he says that thanks to the low interest rates fostered by the Federal Reserve's stimulative policies, people are buying stocks regardless.


 

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