Ron Paul Warns That When The “Biggest Bubble In The History Of Mankind” Bursts It Could “Cut The Stock Market In Half”
by Michael Snyder
TheEconomicCollpaseBlog.com
July 16, 2018
When this bubble finally bursts, will we witness the biggest stock market crash in U.S. history? “The bigger they come, the harder they fall” is a well used phrase, but I think that it is very appropriate in this case. From a low of 6,443.27 on March 6th, 2009, we have seen the Dow nearly quadruple in value since the last financial crisis. It has been a remarkable run, and it has lasted far longer than virtually any of the experts anticipated. But what goes up must come down eventually. This stock market bubble was almost entirely fueled by easy money from the Federal Reserve, and now that easy money has been cut off. The insiders can see the handwriting on the wall and they are getting out of the market at a pace that we haven’t seen since 2008. Could it be possible that the day of reckoning is finally at our door?
Of course we have been hearing warnings like this for a very long time. In fact, I have been warning about a market crash for a very long time. Just the other day, one of my readers insisted that if something was going to take place that “it would have happened by now”. In the Internet age, we have been trained to have very short attention spans, but financial bubbles don’t care about the length of our attention spans. They all inevitably come to a bitter end, but they don’t reach that end until they are good and ready.
And without a doubt we are on borrowed time, but meanwhile so many of us that are continually warning about what we are facing are getting a lot of heat for it.
For instance, when Ron Paul told CNBC that the stock market is “the biggest bubble in the history of mankind”, he was strongly criticized for it, but he was 100 percent correct…
This market is in the “biggest bubble in the history of mankind,” and when it bursts, it could cut the stock market in half, he told CNBC’s “Futures Now” Thursday.
If the Dow only plummets to about 12,000 or so during the coming downturn we will be exceedingly fortunate, because the truth is that stock prices need to fall by at least that much just to get us into the neighborhood where stock prices will start to make sense once again.
Today, sales to stock price ratios are hovering near all-time highs.
The same thing is true for earnings to stock price ratios and GDP to stock price ratios.
The only other times these ratios have been so elevated were just before major stock market crashes.
In the end, these ratios always, always, always return to their long-term averages eventually.
It may take many years, but it always happens.
So what factors led Ron Paul to make such an ominous prognostication? The following comes from CNBC…
“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.
Paul isn’t alone in his critique. A number of politicians have voiced concern over ballooning deficits, including current House Speaker Paul Ryan, who raised a warning on the nation’s debt in 2012.
The Rest…HERE
