Tags: Ron Paul | bubble | stocks | correction

Ron Paul: 'There's a Bubble' in Stocks, 'Major Correction' Coming

By    |   Tuesday, 29 July 2014 04:44 PM

Former Rep. Ron Paul, R-Texas, has joined the growing chorus that sings of a bubble in the stock market.

The Federal Reserve's massive easing program has inflated the bubble, he told CNBC. The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.

"There's a lot of inflation in the stock market. I think there's a bubble there," Paul said. The S&P 500 has jumped 195 percent from its March 2009 low.

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"When you get false information from artificially low interest rates, mistakes are made. They're inevitable," Paul said.

"That's why you have the bubbles, and that's why you go through the catastrophe we had in 2008 and 20009. I think the conditions are every bit as bad as they were in '08 and '09."

So stocks are headed for a stumble, Paul says. "The market has to correct, and who's going to call it a crash until it happens? We're in for a major correction. . . . When it's artificial, it's vulnerable."

Meanwhile, Brad Lamensdorf, manager of the AdvisorShares Ranger Equity Bear ETF, told Yahoo that a 10 to 20 percent correction already has begun. At Tuesday's close of 1,969.95, the S&P 500 stands 1.1 percent beneath its July 24 record high.

"A lot of correcting is starting. It’s just a matter of what it’s going to take to get everybody scared enough to form a bottom," Lamensdorf said.

Editor's Note:
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Former Rep. Ron Paul, R-Texas, has joined the growing chorus that sings of a bubble in the stock market.
Ron Paul, bubble, stocks, correction
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2014-44-29
Tuesday, 29 July 2014 04:44 PM
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