Willem Middelkoop: The Next Financial Crisis, ‘Perfect Storm’ For Commodities & Mining Discoveries

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Willem Middelkoop: The Next Financial Crisis, ‘Perfect Storm’ For Commodities & Mining Discoveries

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Summary

Middelkoop argues that his 2014 book “The Big Reset” is now unfolding in real time, with the US losing its unipolar superpower status, the petrodollar deal with Saudi Arabia collapsing, and the world moving from an era of cooperation to confrontation, though a full transition like Britain’s 70-year handoff to the US could take 30 to 50 years. He points to foreign ownership of US Treasuries falling below 30% of the over $40 trillion debt, the Fed buying over $330 billion in Treasuries in 12 months, and the Dutch pension fund ABP selling 84% of its Treasuries in two years as a “Weimar light” scenario, while central banks buy around 1,000 tons of gold per year for the fifth straight year and China alone absorbs 60% of world mine production outside China. He expects a new financial crisis within quarters to years that could send stocks down 50-70%, at which point central bankers will play the gold card and revalue gold, and he sees the start of a generational commodities bull market lasting to at least 2050.

Top 5 Key Topics

• The Big Reset is happening now but will take decades: The US economy surpassed Britain’s in 1870 yet the dollar did not become the core of the system until Bretton Woods in 1944, so the US decline to a possible Chinese takeover could unfold over 30 to 50 years. The Iran war shows the US rapidly losing Middle East support and the petrodollar advantage that began in the early 1970s after the 1971 gold disconnect.
• Weimar light, not hyperinflation: Foreigners now own under 30% of US Treasuries while the Fed and its proxies hold 70%, and the Fed bought $330 billion in the last 12 months, which Middelkoop calls QE by another name. He rejects a binary hyperinflation view, preferring “superinflation,” because the US holds the reserve currency and can still revalue its 8,000 tons of gold from $42 to $4,000 or even $40,000 an ounce.
• Central bank and Chinese gold accumulation: Central banks may add around 1,000 tons for the fifth year in a row, equal to one-third of world production, and China alone buys 60% of mine production outside China. Through OMFIF’s new gold hub, he has heard directly from several central banks that they only recently started buying, meaning the buying spree is still early, and gold holdings now exceed Treasury holdings in central bank reserves.
• Gold revaluation requires a crisis first: Gold’s move from $2,000 to over $5,000 shows investors understand gold must be reintroduced into the system, but official revaluation will only come when a crisis hits, which he sees possibly starting any day given cooling real estate in the US, Canada, and Australia and early tech/AI cracks. He recalls being the lone dissenter among six experts at a February 2008 Dutch Parliament hearing before Lehman collapsed six months later.
• Miners and discovery investing: Gold miners’ free cash flow now exceeds the Magnificent Seven while Newmont and Barrick trade at P/Es around 10-11 versus a historical 25, so 30-40% of his fund is in producers with option hedges. The remaining portfolio holds 40 discovery positions, including over 4% each of Hercules Metals and Sitka Gold and over 1% of Talon Metals, following the Aurelian Resources model where a $20 million company became the $20 billion Lundin Gold.