Former Texas Rep. Ron Paul predicts that the U.K. vote to leave the European Union is a sign of a major global meltdown.
"I think [the EU] will become nonfunctional," Paul told
CNBC this week. "It really is coming to an end. It doesn't mean tomorrow or the next day, but people are going to be really unhappy. The end is coming, but it isn't coming because of the breakup," he added.
Paul attributed the fallout to "bad fiscal policies" around the globe. He said that as long as interest rates remain low, the markets will remain in bubble territory, CNBC reported.
"I think what everyone is looking at is there was a vote, an important vote and it went differently than expected and it sent shock waves through the markets, but I think the concentration is on the wrong issue," the former Libertarian and Republican Party presidential candidate said.
"What has been preceding this situation that we have throughout the world and this country as well is artificially low interest rates. It causes people to make mistakes in buying bonds," he said.
"Catastrophe doesn't come unless there's something that precedes it, and what sets the stage is monetary policy, artificially low interest rates, zero interest rates," he said. "There's a lot of instability still out there, and this hasn't been corrected yet. I don't think it's going to correct easily," he said. "We are running out of steam."
Meanwhile, not everyone is as gloomy about how Brexit will change the world.
Newsmax Finance Insider
Mohamed El-Erian sees two silver linings.
"First, the referendum could end up solving a fundamental contradiction within the EU," he told
Yahoo Finance. "Since it first joined 40 years ago, the UK has treated the EU as a super free trade arrangement. That is, an end in itself. Not so for some other influential members, including Germany. For them, the EU was a means to the “ever closer union” that the founding fathers envisaged. And this has economic, financial, political and social aspects that the UK could never accept," he explained.
"A Brexit resolves this basic inconsistency, albeit with a sizeable transition cost, including lower growth and a higher threat of recession, and considerable risks to the overall integrity of the EU," he said.
"Second, the referendum could act as a wake-up call for polarized politicians who have repeatedly failed to implement the package of required policies. A Sputnik economic moment if you like."
(Newsmax wire services contributed to this report).