The former Republican Congressman from Texas believes escalating dysfunction in Washington will create even more pain for Wall Street.
According to his calculations, it would cut the S&P 500 Index in half, to 1212, and the blue-chip Dow Jones Industrial Average would collapse to 10,837.
Paul noted that there's a lot of chaos in Washington right now, with an "unpredictable president" and those who are inclined to "tear him apart" but if the market takes that big of a tumble, he doesn't see it as Trump's fault.
"It's all man-made. It's not the fault of Donald Trump in the last week", he said.
What's more, it would come at the expense of businesses who are counting on reforms such as tax cuts and fewer regulations, according to Paul.
He argued Wall Street is overestimating the strength of the economy, and the Federal Reserve kept interest rates too low for too long. He said the situation for stocks could turn ugly as soon as October.
"I see the foundation of our system built on sand, and a big wind comes along to blow it down," Paul said.
Source: Bloomberg Pro Terminal
Jr Trader Ivan Ivanov
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.