Ron Paul: Upcoming Market Collapse ‘Could Be Worse Than 1929’
Former Libertarian and Republican Congressman Ron Paul said the next market collapse will rival the great stock market crash of 1929 in a recent interview with CNBC.
Paul said we are currently standing on the edge of the abyss after the all-time highs of September gave way to volatility from October on.
“In the last eight or 10 months the market has taken a turn down … 10 percent or so and I think it’s a very vulnerable position,” Paul said. “When markets are destined to make big corrections as I believe, they don’t do it from the top, they do it from 10 to 15 percent down. So we’re at that position. Once this volatility shows that we’re not going to resume the bull market, then people are going to rush to the exits.
“So I suspect that we’re at a very, very precarious point where people are going to say, ‘Hey, there’s something wrong going on.’ And I’m not optimistic that all of a sudden you’re going to eliminate the tariff problem. I think that’s here to stay and I don’t think the ‘Tariff Man’ is going to give up.”
Paul said politicians’ reliance on free money handed out by the Federal Reserve is the main culprit.
“There’s no sign that (the next market crash) going to be mild and it depends on what the government does,” Paul said. “If you allow the liquidation it doesn’t last long. I would advocate allowing it to liquidate itself like in 1921. I think it could be worse than 1929. We can’t keep our hands off — we prop it up and it’s like taking drugs and I think all this QE (quantitative easing) bailout was just loading up on the drugs. It was so dependent on free money but unfortunately, what happens is the money doesn’t get distributed fairly and that’s why you have social chaos — and that’s why you have socialists making headway in elections because of the mal-distribution. We don’t have a market economy and I get very annoyed when they say, ‘See Ron, that free market stuff, it doesn’t work. Look at the terrible situation we have here.’
“And that is the reason why I think it’s so important to understand the original cause of the problem, and that is the Federal Reserve rang up debt and let politicians spend money. And having conservatives, when they get in office and control the government, they’re worse than the Democrats because they’re totally dependent on it.”