Tag Archives: the big reset

Interview Willem Middelkoop About The Big Reset

The very reason I became interested in gold after the financial crisis in 2008 was because of Dutch gold guru, author, journalist, entrepreneur, and fund manager Willem Middelkoop. When I started reading his books I was immediately obsessed with economics and the gold market – along with thousands of others across the world.  Who would have thought that I would become a precious metals analyst a few years later?

It was an honor to have contributed to Willem’s latest book The Big Reset with translations from Chinese policy makers that stimulate their citizenry to accumulate physical gold and my initial research into the Shanghai Gold Exchange that revealed Chinese gold demand was approximately twice a large as what was previously thought in the English-speaking world.

When The Big Reset was first released in January 2014 I’ve conducted an interview with its author about the inevitable reset of the international monetary system (the interview was published in two parts on this blog – onetwo). Since then a lot has happened in the global realm of economics and at the same time The Big Reset became an international best seller. As we speak The Big Reset has been translated in Dutch, German and Chinese and is expected to appear in Portuguese, Arabic, Polish and Vietnamese.

To keep up with the most recent developments Willem has added 70 pages in the revised edition of The Big Reset. For me a reason to have another chat with him about what he saw has happened in the past two years:

The Big Reset

J: Is it a coincidence that after the financial crisis more tensions between the West and East emerged and is there a financial war played by the US?

WM: Economic warfare aims to capture or otherwise control the supply of critical economic resources or destroying a country’s currency.  The US understands better than anybody else that a country can sometimes be hurt more by doing this than by bombing its infrastructure. A recent example of financial economic warfare was the sudden crash of the price of oil and value of the ruble soon after the annexation of the Crimea by Russia, in the second part of 2014. In less than six months the price of oil halved. This large drop could not be explained by fundamentals like supply and demand. Some market commentators said it reminded them of the Cold War era when the US and the former USSR competed not only in a military way, but also tried ‘to play the economy’. Because the USSR was increasingly more dependent on food imports, especially grain, the export of oil had to bring in enough dollars. The US decided to use its influence on Saudi Arabia (OPEC) and persuaded them to expand the supply of oil, making the oil price plunge in the 1980s. It would soon prove to be a fatal attack for Russia and the Soviet Union collapsed in 1991. The fact that Saudi Arabia in 2014 again increased its oil production fuelled rumours of a new economic war against Russia. The collapse of the oil price led to collapse of the Russian ruble. The Russian Sberbank, confirmed that it had come under a financial economic attack in December 2014. Herman Gref, CEO of Sberbank, disclosed a foreign-based attempt to provoke a bank run during the December ruble crisis. In an interview he said that about $6 billion had been withdrawn from the Sberbank in a single day after a massive information attack, with people receiving text messages saying Sberbank was facing problems paying out deposits. Thousands of SMS-messages were sent, including a large number of mailings done from foreign websites.

Willem Middelkoop the big reset
Willem Middelkoop

J: What more do you see around the world in terms of financial warfare?

WM: In May 2015, the US had a number of high-ranking FIFA officials arrested in Switzerland in connection to a bribery case. Most observers did not understand that the US action was designed to pressure FIFA, ‘urging it to consider removing Russia as host of the 2018 FIFA World Cup because of its role in the Ukraine crisis and occupation of Crimea.’ China and Russia were also shocked to learn how the SWIFT international payment system was used as a means to attack Russia. In 2014, the United Kingdom pressed the EU to block Russia from the SWIFT network as a sanction for the Russian aggression in Ukraine. China responded quickly and launched its own alternative, the China International Payment System (CIPS). In addition, by 2012 SWIFT disconnected all Iranian banks from its international network. Alastair Crooke, a former MI6 official is one of the few individuals who has been very open about the purpose of this kind of financial and economic warfare.

J: Is this all meant to defend the US dollar hegemony?

WM: In a book, ‘Treasury’s War,’ the tool of exclusion from the dollar-denominated global financial system is described as a ‘neutron bomb.’ When a country must be isolated, a ‘scarlet letter’ is issued by the US Treasury that asserts that such-and-such bank is somehow suspected of being linked to a terrorist movement – or of being involved in money laundering. The author of ‘Treasury’s War’ Juan Zarate, chief architect of modern financial warfare and a former senior Treasury and White House official, writes this scarlet letter constitutes a more potent bomb than any military weapon. With Ukraine we have a substantial, geostrategic conflict taking place, being part of a geo-financial war between the US and Russia.

J: What’s China’s roll in this?

WM: It has brought about a close alliance between Russia and China. China understands that Russia constitutes the first domino; if Russia is to fall, China will be next. These two states are together moving to create a parallel financial system, disentangled from the Western financial system. That’s why both are accumulating so much physical gold. It includes replicating SWIFT and creating entities such as the Asian Infrastructure Investment Bank. One of the principal tools in the hands of Washington to control the global system was always the International Monetary Fund (IMF). Nations have to go to the IMF to ask for financial help, when in difficulties, but recently it was China – and not the IMF – which bailed out Venezuela, Argentina and Russia as their currencies crashed. China became concerned when the ruble crashed late 2014, and intervened to halt a run on the currency. The IMF and the World Bank are no longer at the center of the global financial order.

J: Why is this dollar hegemony so important for the US?

WM: ‘Great nations have great currencies and great currencies can give countries great power so they can even grow into empires’, political scientist Jonathan Kirshner once said. In order to maintain its monetary hegemony, the United States must weaken any potential competitors who will possibly challenge the US monetary hegemony. Wars in the Middle East are fought to strengthen the dollar’s position and fight regimes that have been supporting Russia. General Wesley Clark, the Supreme Allied Commander of NATO during the 1999 War on Yugoslavia, confirmed in an interview that the US had decided to work toward regime changes in seven countries, in order to secure US interest in the region before any new world power might arise.

J: Through the dollar the US has unlimited powers?

WM: Any country, like the US, that issues the dominant world reserve currency has almost limitless power to finance other countries. It gives the monetary hegemony ‘exorbitant privilege,’ as the French remarked in the 1960s. Because it can print the world currency the US can buy anything it wishes without having to worry about its liabilities. While the Soviet Union collapsed because they had to import food with hard-earned dollars from their oil exports, in the 70s and 80s, the US could start the Korean War and the Vietnam War with freshly printed greenbacks. By ‘obliging’ foreign central banks to keep their monetary reserves in Treasury bonds, the US in fact forced them to finance US military spending abroad, as Michael Hudson explains in his book ‘Super Imperialism’. In this new form of imperialism, the US is able to rule not through its position as world creditor, but as world debtor. America’s weakness as a debtor country has indeed become the foundation of the world’s monetary and financial system. A Chinese market commentator once remarked: ‘World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy … a dollar hegemony that forces the world to export not only goods but also dollar earnings from trade to the US … Everyone accepts dollars because dollars can buy oil.’ Only when dollar-holding nations decide to buy natural resources instead of US treasuries, is the dollar’s reserve currency status in danger. This is exactly the exit strategy China and Russia seems to be playing right now. In recent years, the Russians have sold most of their dollar holdings, while they tripled their gold position. The Chinese have stopped buying extra US Treasuries since 2010 while they have imported and invested in huge amounts of gold. These developments signal the first stages of the US dollar’s decay.

Guest Post: Spelling Out The Big Reset

Written by LK in Hong Kong

As economies age, debt builds up. Advanced economies – those with the highest borrowing ratings by the reputable agencies they developed – have it clogging up inside all their arteries. The Big Reset will finally become inevitable, as has been acknowledged by the IMF head Largarde, mentioning the year 2020. But what must an Armageddon debt reset necessarily involve? Few have spelled it out, not even in the famous book with the same title “The Big Reset” by Willem Middelkoop.

Revision on money creation mechanics: unwrapping the meaning of ‘Reserves’

At the center of it all, wrapped by layers of secrecy and protected on the outside by purposefully confusing jargons is this concept of Reserves. Let’s understand it to mean ‘net worth’, ‘collateral’, or whatever a banking entity’s ‘really worth’, because what banking entities do, is to use this asset as backing to create instruments and derivatives, like loans, or even money, and expand the money supply. In long tradition, the ultimate reserve asset is of course gold. When the bank’s (or central bank’s) worthiness comes into doubt (like to many gold-deposit receipts flying around), people come for the ‘reserves’. If the reserves satisfy the claims, then it’s good.

In our fiat currency world since 1971, countries hold each other’s currencies as legitimate reserves. The country’s central bank can then go create the country’s own currency. The justification is simple: there is this unsaid assumption that when the worthiness of a country’s money becomes in doubt, one would not question the worthiness of the other currencies held as reserves, and, hence, as long as the country’s central bank can supply the ‘safe’ reserve currency to meet with the country’s currency being sold, all is well. As we approach it from this angle, we know to ask the question, “what then gives the other reserve currencies their value?” Note, this process enables country A to expand the money aggregate in foreign country B also, if only country B is happy to have currency A in its reserve to create some more currency B at will.

Money creation is a happy process. Everyone likes it, from businesses to banks to governments to the everyday wage earner who is happier even if his salary only rises by the same amount as inflation. And this is so even for our debt-money system, in which money is very much ‘loaned into existence’ as a debt is created. The temptation is strong, and this is fundamental.

As the Devil has it, there are two issues with this that are necessary consequences:

(1) With debt comes interest, and if one keeps expanding the borrowing, one day the interest requirement will exceed earning power, and this is where the ‘advanced economies’ are today.

(2) If the money supply grows faster than the amount of goods and services it can be traded for, this leads to inflation. It is important to have people believe that their money is good so they do not have the tendency to convert their money into real assets. Hyperinflation is the currency event in which faith is lost in money and when people rush to buy real assets, they find that there is not anywhere near enough physical assets to satisfy money claims.

Looping back to the concept of reserves, the central idea to a stable banking system is to have people believe that the reserve of the system is good – in sufficient quantity as an ‘end product’.

The Sure-fire way to Reset

Now, our ‘advanced economies’ have already passed the point where interest service is manageable. In an effort to perpetuate the illusion for as long as possible before stage (2) when the quality of the debt papers is called into question, our money masters have launched outright money printing to maintain service of debt interests. They cranked up the power of their mind-influencing machines, and will do “whatever it takes” to avoid their game being called. Clearly this can only exacerbate the onset of Stage (2).

“The Fed’s balance sheet is a pile of tinder, but it hasn’t been lit … inflation will eventually have to rise.”

– Alan Greenspan 25 October 2014, New Orleans Investment Conference.

The problem of a debt reset is not the wiping-out of creditors, but the destruction of currencies together with it. Without currencies, the economy cannot function with any efficiency.

Hence the sure-fire way to reset is to use an indestructible material that exists in fixed, limited quantity to act as reserve asset for money. Gold naturally fulfills this role in any and all precedent failure instances of money and it will work again. Once enacted however, liquidity condition will once again face hard constraint by the physical substance available. Any money printing will translate into a loss of value of each currency unit. Against a strict liquidity condition, life will be much tougher! But it will work.

One step short but keeping the benefits: the SDR?

International monetary expert Jim Rickards has a helpful way to visualize the evolution of financial crises in the West. He explains that every time a crisis breaks out, it is bailed out by the next bigger entity assuming the obligations, “kicked one level upstairs”, in order to avoid a default situation blowing a monetary hole threatening stability. For example, LTCM was bailed out by the banks. When banks get into systemic trouble, they’re bailed out by central banks and sovereigns. What now is the next level up above sovereigns? There isn’t any clear one.

One attempt at this short of going directly to gold might be the Special Drawing Rights of the IMF, claiming to be the super-national authority in charge. The SDR is by design and by hope a reserve asset. It only came to have this funny name by concession to the French in 1969 who did not want it called a reserve asset. As we now understand the nature of reserves, we know it has been the purpose and hope of its creators that when the whistle on fiat currencies blows, people can be convinced to accept this as having value, just because it appears to be issued and controlled by a cross-national group of men in suits. SDR would then be endowed upon obeying nations to be used for ‘good’ money creation. But what is the SDR? It is still a basket of the same fiat currencies.

So, we already see that this might only be the dream of hopeful men in suits and probably won’t work when it is most needed. Enter China and the RMB. The two questions are now:

a) Why does it have a better chance of working, and

b) What does China want?

The answer to a) is, as to what is different now, is that unlike the ‘advanced economies’, China is a creditor nation, and the World’s largest one. If it says okay, it probably is okay a long way already. Plus, China has imported a lot of gold, so it could make references to the gold anchor in ways that are helpful to its aims. By this chart, the gold content within China’s borders is more like 16,000 tonnes, twice as large as the largest official stockpile claimed by any single country (USA).

Total Estimated Chinese Gold Reserves 1995 - 2014

What can China want? By inclusion as a crucial component in the SDR, China gets a control on this international reserve asset, and by deduction, world money supply. The use of reserves is to legitimize money creation. Here is that immortal quote again from the very MA Rothschild himself:

“Give me control of a nation’s money supply, and I care not who make its laws”

It certainly is a very powerful position, although whether China has the ambition to rule the world this way is a different issue. But it is a more flexible possibility than the strict, full gold-fixed gold-backed and effectively gold only currency regime. Mentioned above, money creation is a happy process to all (except when it is collapsing), and often a useful one too.

If things will get so shockingly bad that this will not be enough to instill trust and confidence, the SDR basket may require a fraction of physical gold content. This may then have the appearance of a gold-backed money to most people like the strict, sure-fire solution, with a more subtle twist. The gold content requirement, will indeed hard-limit the reserve and money creation and bestow confidence. But with mutual agreement, the gold proportion can be more easily or very slowly relaxed, slowly and subtly diluting the SDR. Or, if China wants the money aggregate to expand, it can go ahead and post some of its gold. Its acquisition cost is cheap, below $1250 as we speak, well less than 1/10 of its future price when this will be needed. And China has been allowed to have plenty and plenty of this by the willing international community at the average pace of some 40 tonnes a week, every single week and for years on end.

Wiping out creditors by inflation is the easy part. Re-establishing money to restart the world economy is the harder one.


“Whoever has the gold makes the rules.” – Wizard of Id, May 3, 1965 (a comic strip)

“Possession is 9/10 of the law”- adage / lawyer joke.

This guest post is written by LK in Hong Kong

Willem Middelkoop On The Big Reset

As you can read in my bio, Willem Middelkoop was the reason I started to read about economics in 2009. He’s the most well known gold investor in the Netherlands and one of the few who openly debates mainstream economists and speaks out his critical thoughts about the current status of the international monetary system. In this post I would like to share his thoughts on what he calls The Big Reset, which is also the titel of his latest book: The Big Reset – The War On Gold And The Financial Endgame. In short, Middelkoop states the current international monetary system has entered its last term and is up for a reset.

Middelkoop, like me, didn’t study economics in university, which I think gave us both an advantage in analyzing economics. Middelkoop saw the collapse of the real estate market coming in 2006, Ben Bernanke didn’t.

Makes sure English captions are on.

[youtube https://www.youtube.com/watch?v=Dxep_xmOPJ8&w=420&h=315]


[youtube https://www.youtube.com/watch?v=u5A4Gw20dcw&w=420&h=315]


Can the global credit expansion ‘experiment’ from 2002 – 2008, which Bernanke completely underestimated, be compared to the global QE ‘experiment’ from 2008 – present?

The above video is one of the reasons I like to listen to Middelkoop every now and then. In the next presentation he shares his thoughts on the future of our monetary system and how gold, the US and China are paramount for its outcome. The presentation was held on a Dutch congress called Geld Voor De Toekomst (money for the future) on September 30, 2014, in Rotterdam, the Netherlands. Note, Willem doesn’t pretend to be an economist, he’s an investor and an Author.

Makes sure English captions are on.

[youtube https://www.youtube.com/watch?v=UK9NB800kkM&w=560&h=315]


The Big Reset, Part 3

KJ made it into a Dutch newspaper again! When I interviewed Willem Middelkoop last week about his new book The Big Reset, this article was picked up by Zero Hedge. Within hours the Zero Hedge guest post was viewed 40,000 times and the book jumped to second best sold on Amazon in the category finance and banking. A great succes that came up in an interview Middelkoop did later on for NRC Handelsblad, a leading Dutch newspaper.

nrc handelsblad weekend

Interview Willem Middelkoop published in NRC Handelsblad 1-2-2014

Willem Middelkoop is one of the winners of the current crisis. In 2007, the former photojournalist , entrepreneur, investor and stock market commentator wrote his first book with a sour view on the economy, If The Dollar Falls. It was followed by a book with tips on how to cope with the crisis, Survive The Credit Crisis. He sold more than 100,000 books. He became a celebrity with his gloomy comments about the financial system, but there was always a bright spot: gold. This precious metal would always continue to hold its value, as opposed to paper money.

With his latest book on a new financial system, The Big Reset, he is now making successful steps abroad. The book is already second on Amazon.com’s best-selling books about finance and banking. Again, gold plays an important role in this book. The global financial system will be radically overhauled before 2020, according to Middelkoop. The dollar will lose its place as the world reserve currency, and a portion of the sovereign debt of countries will have to be cancelled. Gold will return as a monetary anchor, and that will benefit its price, which will see new highs, according to Middelkoop.

But while he celebrates his success as a writer, at the moment he seems a lousy investor, as his predictions haven’t came out yet. The gold price has fallen steadily since its high in 2011. “I’ve been terribly wrong for one and a half years,” admits Middelkoop. Is he getting nervous ? “No, I’m more convinced than ever of the rosy outlook for gold.”

The fact that the gold price is declining fits his theory, which is that the gold market is highly manipulated, by the U.S. in particular. Excuse me? “If the price of gold gets too high, people lose faith in the U.S. dollar. That would not suit the U.S. now that it is printing $1 trillion a year and the U.S. dollar hegemony is under severe pressure.”

Middelkoop picks up a couple of charts from Australian bank Maquirie. “Look”, he says, “here is the demand for gold in China. It has exploded since the outbreak of the crisis. Oddly enough, the price has dropped. That is because of price suppression.”

It is the central message of his work: there is no such thing as a free market. The market is rigged and controlled by the U.S., with the help of its allies, with the specific intention to save the system and especially the U.S. dollar hegemony. In The Big Reset, he shows that this system is no longer sustainable.

While the economy is improving, you are warning of a collapse.

“It’s not improving. Western countries are struggling with huge debts . Government debt is quickly increasing because of the crisis. If you look at the ratio of debt relative to GDP of an advanced country, you will discover this cannot be solved. According to a recently released IMF report, it is impossible for developed countries to grow out of such debts. That rate of growth is just not attainable. It can only be performed by a very young economy such as the emerging economies. ”


“Debt restructuring is the only solution, but it will also affect the dollar. Due to the huge U.S. debt, the dollar is no longer credible as a global reserve currency. The Chinese know this. The Chinese state news agency has recently called for a new global currency to replace the dollar. In anticipation of this, they are already accumulating large amounts of gold. China even stimulates its citizens to buy gold.”

In what way is the gold market manipulated?

“Through futures contracts, which settle gold transactions at a later date. These are often used by speculators who are not interested in buying physical gold, but despite this, the price of gold is set by the trades in these contracts. By dumping large amounts of futures contracts on the market, you can bring the price down. The size of these paper markets is a hundred times larger than the physical market, which adds to the effect.”

Middelkoop is an autodidact – “I started studying the financial system in the nineties when I borrowed three million euros from a bank in order to buy real estate in Amsterdam. I wanted to know where that money was coming from” – and knows that he is sometimes depicted as a conspiracy theorist. He brings the subject up himself. “These are not conspiracy theories, these are conspiracy practices. In my book you will find a lot of evidence. Many people are starting to think in the same way. Fifteen years ago, you were an outcast when you proclaimed that the markets were not free. Not anymore. Everybody knows interest rates aren’t set by the markets. Central banks all have support operations to keep yields low.”

Middelkoop says his ideas are no longer ‘economic underground’. On the contrary, they have become mainstream. He noted that he was accosted by an eighteen year old boy at the car wash three years ago. The boy recognized him and said “Gosh, that was interesting” And then he began to tell me about the secrets of the Fed and the deceit of Monsanto.

That boy was the embodiment of a whole new generation that distrusts the economic elite and that has embraced the underground coverage, according Middelkoop . “The youth of today knows that central bankers cannot be trusted, and that you should distrust large corporations. Websites they visit are reporting a lot on these underground stories. The generation of my parents has a boundless respect for authorities. But these young people know that they are being cheated.” That boy at the car wash is now a student in political science, and even helped Willem with the research for his latest book.

The international success of his new book can be explained by the fact that people are beginning to see that his ideas and those of others are not conspiracy theories. It was an interview that appeared on the well-respected website of zerohedge.com that propelled him up the Amazon list. Zero Hedge is an alternative financial website where generous but well researched suggestions and speculations are made. The site is also read in detail by anyone who plays a role in the financial world. Within 24 hours, the interview had been viewed 40,000 times.

Who did that interview on Zero Hedge?

“There is a Dutch blogger who does research on the Chinese gold market. He publishes on ingoldwetrust.ch, under the name Koos Jansen. He did some remarkable findings and is taken very seriously abroad. I sent him my manuscript at an early stage, and he interviewed me later about my book. That interview, in English, ended up on Zero Hedge as a guest post.”

What really drives you? Why do you have an urge to show people the murky aspects of society?

“I wish I wouldn’t have to, but the deception runs too deep. One day you realize that what you learned in high school is completely false. I find it inexplicable that one would not be bewildered once they find out. That boy of eighteen was stunned and wanted to know exactly what the truth was. The same goes for me. The journalist in me wants to tell this story. I have to show this to the world, because soon no one will believe that you could have foreseen this ten years ago.”

Of course you also have an interest in turmoil in the financial markets, and in a collapse of the system. This would cause the gold price to rise, as you describe yourself, and this would suit you as a gold investor.

“I don’t like monetary turmoil but want to protect myself as an investor and as a speculator. I put my money where my mouth is. More than 75% of my assets are invested in the precious metals sector. Gold will retake its rightful place in the monetary system. Once the reset comes, the new world reserve currency will become partially backed by gold. When the Americans abandoned the gold standard in 1971, the current crisis was actually triggered. As money was no longer backed by gold, the unbridled creation of money – creating money out of nothing by central bankers – began. This created the current debt predicament. Previously central bankers were chained by gold.”

The system will return to the old ways, Middelkoop believes. “History has shown that no single currency can survive without gold.” When the rise happens, the price of gold will explode. Will he take profits? “I will only sell my gold if the price hits $ 5,000.”

Translated by KJ

[youtube https://www.youtube.com/watch?v=Cbq0Lh0SV1A]