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Ron Paul doubles down on his call of a 50% chance for a crash

Not only is a market correction inevitable, but stocks could plunge as much as 50 percent, according to Ron Paul.

The former U.S. congressman and noted libertarian is standing by a correction call he made in August, when he said that all three major indices could lose as much as half their value within a year's time. On Friday, stocks closed at or near record highs, extending a multi-week win streak.

According to Paul, the main cause of this correction could very well be the Federal Reserve, which just days ago signaled its readiness to reverse more of its crisis-era loose monetary policies. Markets are near-certain the Fed will tighten rates at its next meeting in December.

"They're in a quandary, they're in a total dilemma," Paul said on CNBC's "Futures Now" last week. "I think what they're doing is totally unmanageable, and everything they do contributes to mal-investment and distortion."

Long a critic of stimulative monetary policies, Paul said that the apparent caution the Fed is bring to bear as it hikes interest rates betrays an unsure Fed.

And he warns that rates continue to be dangerously low.

"If you control interest rates to be this artificially low, everything is going to be distorted to some degree," he explained. "But you don't know which [parts of the market will turn out] the worst and what day [trouble is] going to happen."

Beyond stocks, Paul is also worried about the U.S. dollar. The former congressman believes that the dollar is "under threat," and could someday be replaced.

"There will be a day people lose confidence in the dollar, and if you look at foreign policy advances and some [of the other geopolitical events going on], I think we're very vulnerable," he said.

Paul's 50 percent correction call is even bolder than a previous prediction he made back in July. At the time, he stated he thought the stock market could fall 25 percent.

Still, he has long been known for his bearish calls. In July 2014, Paul warned on "Futures Now" that the market was in a "bubble" and poised to crash. Since then, the S&P 500 Index has risen nearly 30 percent.

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