Ron Paul is not comforted by what he sees. Excerpt:
"The US government just won't allow the correction the economy needs." He cites the mini-depression of 1921, which lasted just a year largely because insolvent companies were allowed to fail. "No one remembers that one. They'll remember this one, because it will last 15 years."At some stage - Mr Paul estimates it will be between one and four years - the dollar will implode. "The dollar as a reserve standard is done," he says. He sees little hope for other currencies where central banks have also created too much liquidity dating right back to the early 1970s.
"Europe and the US will both have to fundamentally change their money systems," he adds.
And don't even mention shares to Mr Paul: "The last place you want to be is in the stock market," he says. "It may not bottom out for 10 years - just look at Japan."
Of course, everyone has a view on the credit crisis, its causes and putative solutions. What differentiates Mr Paul is that he has been warning of the dangers to the world economy for nearly 40 years. "The breakdown of Bretton Woods was my motivation for running for Congress. I have been talking about the dangers ever since and warning that the control by central banks over the money supply would create an enormous bubble."
A deep recession had only been avoided up until now because of the efforts of successive governments to reflate the economy. But there are no more policy levers left, says Mr Paul. "This is the big one."
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Re: Ron Paul is a medical doctor
which makes him worth listening to on matters of health and disease. It does not grant him oracular powers. The economy is inherently random over the long term and no one can predict what it will be like in 15 years, or even in one year.
Jon,
I agree that it's hard to know where the economy will be even one year from now.
So why are you so sure it will be "morning in America" again four years from now?
Might it be that I smell kool-aid on your breath?
A lot of people here, most definitely including our host, are going to be sorely disappointed if the economy recovers in a year or two.
If that happens you're going to see backing and filling like you've never seen it before. Plus even more dire warnings about some other kind of Doom, whatever they can think up, the more dire the better.
Didja see the orders for durable goods were up today?
Ron Paul and Peter Schiff PREDICTED everything that has gone down. Their financial sense is brilliant. Schiff has a current youtube video, a speech at the Austrian Economists(or something like that) he talks about the meltdown and the reasons for it, and how the government is doing all the wrong things and ruining the currency.
Schiff usually makes mincemeat out of any and all of the financial gurus with whom he faces off. He has a great grasp of the fundamentals and can explain things in terms that we can understand.
I sure hope that Paul and Schiff are wrong...but I have a sinking feeling that they're right.
John M., I am a huge supporter of Ron Paul, but I respect the refusal of distributist like you to not fall into the liberal (original meaning) trap of economic reductionism and homo economus thinking. But the Constitution allows very little Federal meddling in the economy. Tax policy and trade policy yes. But certainly not subsidies. Certainly not central banking. Certainly not bank regulation and subsidization. Certainly not Keynesian stimulus bills. What intervention would you propose that is authorized by the Constitution?
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