William Middelkoop: Gold Prices Could Hit $8,000
The man who correctly predicted the recent crash in the U.S. housing market is now making a wild prediction on gold prices. Famous economist and fund manager, Willem Middelkoop is predicting that gold prices could jump to $8,000.
Known for his book The Big Reset: The War on Gold and the Financial Endgame, Middelkoop predicts that we might be approaching another defining juncture in history. He insists that the next stock market crash will be much worse than the crash of 2008. Middelkoop is calling it a “monetary reset.” (Source: “Gold – Willem Middelkoop,” YouTube, February 2, 2016.)
In his latest interview, the economist-turned-investor made a surprising prediction: “I think the U.S. might surprise everybody with a unilateral reset. They could even introduce a gold-backed dollar.”
Middelkoop forecasts that the central bank could revalue gold like it did in the 1930s, under Roosevelt’s presidency.
“It’s my idea that gold will be revaluated at some point by the central bankers to a much higher level. By revaluating gold towards $4,000 or $8,000, you solve quite a lot of problems,” says Middelkoop.
Middelkoop points out that the Chinese are pressurizing the International Monetary Fund (IMF) to adopt a reserve currency other than the U.S. dollar. The push to include the renminbi as part of its basket of SDR (special drawing rights) currencies was the first step. China’s next wish is to add gold as the sixth SDR currency.
“It’s not a coincidence that both Russia and China are accumulating gold, the same amounts—250 tons a year,” reminded Middelkoop. He notes that demand for precious metals has been going up. At the same time, production has been slipping. “We will have shortages in important metals before 2025. Actually, if you study current supply and demand figures, there’s a production deficit now in platinum, palladium, silver, and gold.”
Middelkoop points out that the market often forgets the relativity in gold prices. He says gold prices stated in terms of other currencies are going up. But the market only looks at gold prices in dollar terms. This is misleading because U.S. dollar has strengthened over time relative to gold.
Two countries, India and China, are particularly ramping up their gold reserves.
Willem Middelkoop poses a question to his listeners: “Imagine, there’s the potato market and we have two countries buying up all potatoes in the world. What will happen to the price of French fries?”