Willem Middlekoop is convinced that in a restructured financial system, gold must and will have a place again. Central bankers are also aware of the imbalances in the current system and are already looking for a new "anchor" that will one day replace the US dollar. The market veteran thinks that gold could become an important pillar of the new system alongside the IMF's Special Drawing Rights and large-scale debt restructuring, as people will flee into real assets if they lose confidence in the financial system.
According to Middlekoop, we are already seeing the beginning of the reset he announced. However, this reset will be a gradual process rather than a sudden event, he explains. The current system cannot last forever, as all fiat money systems in history have failed, but the central banks could manage to change it slowly without causing a complete collapse.
When talking to sceptics who do not believe that there will ever be another gold-backed or partially gold-backed currency system, the author points to the gold purchases made by numerous central banks in recent years. "They may know a thing or two about the future", he adds. The Basel III framework, which recalibrates the valuation of physical gold and paper gold on bank balance sheets, also underlines the increasing importance of the yellow metal.
Middlekoop says that personally, he holds 25% of his portfolio in physical gold and silver in order to hedge against all eventualities. “You are never sure what's going to happen. Banks might close, stock exchanges might close. You can have a deflationary collapse, you can have hyperinflation”, said Middlekoop. “You should adjust your portfolio so that […] you can survive each and every of these scenarios,” he advises.