Ron Paul: Believer in Small Government Predicts 15-Year Depression
by Phil Davis
and insurance company portfolio managers look away now. Your increased
commitment to government bond holdings in recent times is about
to blow up spectacularly.
At least, that
is the view of Ron Paul, the US congressman who ran against John
McCain in last years Republican Party presidential nomination.
His is a minority
view. Yields on government bonds worldwide have been falling fast
over the past few months and in the UK, the commencement of quantitative
easing this month sent bond prices soaring.
But the credibility of both western governments and their currencies
is waning, and has been ever since the gold standard was abandoned
in 1971, says Mr Paul. And that means even safe investments
are far from safe, he claims.
will start to abandon the dollar as current and past economic policies
create a steep rise in interest rates, Mr Paul says.
are in Treasuries, you will need to be watchful and nimble to time
cashing out will not protect the value of investments, he insists,
because fiat currencies will all decline over the coming
years as measures to try to haul the world economy out of recession
fail. The current stimulus measures are making things a lot
worse, says Mr Paul.
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© 2009 Financial Times