Financial safety

‘There’s no stopping it,’ warns Ron Paul: A ‘calamity’ could cut this market in half

And that “calamity,” according to libertarian and former presidential candidate Ron Paul, could very well lead to a 50% drop in the stock market. For the DowDJIA, +0.04% that would mean about 12,500 or so.

Who does he blame for the looming market catastrophe? The Federal Reserve and the “rigged economy,” of course.

“I think we have a greater distortion and a financial danger sitting out there bigger than ever before,” he told CNBC in an interview this week. “Everything is just very burdened with debt, and there’s no stopping it.”

Paul has been calling for a deep selloff for a while now. In fact, in August he made a similar call, saying stocks could get cut in half within a year. So far, not even close, as the Dow Jones Industrial Average and S&P 500 index SPX, +0.26% despite some big hits in February, have managed to move markedly higher from there.

But Paul isn’t wavering with his latest take.

“The correction is going to be huge, and I don’t think anybody can predict, but I think this correction we had in ‘08 and ‘09 wasn’t allowed to really go its course and restore some sensibility to the market,” he explained to CNBC. “I think that’ll be a mild correction to what could happen.”