Alan Greenspan, the former Chairman of the Federal Reserve has warned that Brexit was a “terrible outcome in all respects” and that we are in the “early days of a crisis.” U.K. policy makers miscalculated and made a “terrible mistake” in holding a referendum on whether to quit the European Union, Greenspan said.

That decision led to a “terrible outcome in all respects,” Greenspan, said in an interview with Bloomberg Surveillance yesterday in Washington. “It didn’t have to happen,” Greenspan said. He warned that it is now likely that Scotland, whose majority of voters wanted to stay in the EU, will have another referendum on its own independence. He predicted such a vote would be successful, and Northern Ireland would “probably” go the same way.

He also warned about the massive entitlements and unfunded liabilities in the U.S. and western world. The U.S. national debt is heading rapidly towards $19 trillion but the U.S. also has unfunded liabilities estimated to be between $100 trillion and $200 trillion.

“The issue is essentially that entitlements are legal issues. They have nothing to do with economics. You reach a certain age or you are ill or something of that nature and you are entitled to certain expenditures out of the budget without any reference to how it’s going to be funded. Where the productivity levels are now, we are lucky to get something even close to two percent annual growth rate. That annual growth rate of two percent is not adequate to finance the existing needs.”

“I don’t know how it’s going to resolve, but there’s going to be a crisis.”

He warns that the crisis will likely lead to inflation:

“I know if you look at human history, there are times and times again where we thought that there was no inflation and everything was just going fine. And I just basically say, wait. This is not the way this thing ordinarily comes up. I don’t know. I cannot say I see it on the horizon. In fact, commodity prices are soggy. The oil prices has had a terrific impact on global inflation. It’s not about to emerge quickly, but I would not be surprised to see the next unexpected move to be on the inflation side. You don’t have inflation now. And you don’t have it until it happens.”

Gold in GBP – 1 Year

Finally, Greenspan advocates a return to the gold standard as a way to create financial, economic and monetary stability:

“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?”

Gold Prices (LBMA AM)

28 June: USD 1,312.00, EUR 1,185.79 & GBP 985.84 per ounce

27 June: USD 1,324.60, EUR 1,200.49 & GBP 996.36 per ounce

24 June: USD 1,313.85, EUR 1,181.28 & GBP 945.58 per ounce

23 June: USD 1,265.75, EUR 1,112.22 & GBP 850.96 per ounce

22 June: USD 1,265.00, EUR 1,122.31 & GBP 862.98 per ounce

21 June: USD 1,280.80, EUR 1,129.67 & GBP 866.72 per ounce

20 June: USD 1,283.25, EUR 1,132.08 & GBP 877.49 per ounce

Silver Prices (LBMA)

28 June: USD 17.57, EUR 15.84 & GBP 13.17 per ounce

27 June: USD 17.70, EUR 16.06 & GBP 13.40 per ounce

24 June: USD 18.04, EUR 16.32 & GBP 13.18 per ounce

23 June: USD 17.29, EUR 15.16 & GBP 11.61 per ounce

22 June: USD 17.20, EUR 15.23 & GBP 11.72 per ounce

21 June: USD 17.36, EUR 15.34 & GBP 11.78 per ounce

20 June: USD 17.34, EUR 15.30 & GBP 11.85 per ounce