Monetary Crisis & Civilizational Shift
We live in a time of crisis. This is like the downfall of Rome, but just with Wi-Fi. This phrase was used by Willem Middelkoop, Dutch author and Commodity Discovery Fund founder, during an interview with Stansberry Research. Among other crises, we are facing hyperinflation & monetary crisis. If we are truly living through the majestic civilizational shift, like the fall of the Roman empire, then the important task is to find a way to preserve our wealth. According to Willem Middelkoop the best hedge against the crisis is Bitcoin, gold, real estate and commodities.
We have a number of crises going on at this point in history: energy crisis, climate crisis, Covid crisis, refugee crisis, monetary crisis, China crisis, bond crisis, labour crisis, transport supply chain crisis, inflation crisis. On top of that there is a fertilizer crisis and fertilizers are used in growing food. Therefore, the food crisis might be coming too. China warned its own billion people to stock up on food supplies.
Hyperinflation & Super Inflation
One of the greatest threats to stability (and civilization in general?) is hyperinflation. For example, in 1949 hyperinflation resulted in total chaos within China and that allowed the Chinese communist party to take over mainland China. Countries which experienced hyperinflation in the past, including Germany in 1923, are more likely to be more cautious about the risks. But the USA hasn’t experienced it and therefore it can be more reckless with its monetary policy.
Middelkoop argues that the risk of hyperinflation might force central banks to bring back the gold standard. Banks still hold gold in their vaults and connecting gold with fiat might bring so needed trust in a financial system. However, even the worst case scenario can be avoided, we can experience super inflation which is an inflation above 10%. According to alternative inflation calculations we are already experiencing super inflation and it is hard to tell how long it might last since the global monetary situation can get worse.
If the monetary system is going to face a major crisis, then taking the money out of the system might be a good idea. Bitcoin, real estate, gold, silver, copper, nickel, commodities and commodity market companies might be good alternatives to traditional stocks and fiat.
Bitcoin & Crypto - New Generation Gold
Bitcoin is the gold of the new generation. Gold and Bitcoin are not competitors, but friends & nephews since both serve the same purpose – store of value. The world became highly digitalized in the last decades and Bitcoin is a gold alternative in a digitized economy. Younger generation understands that and it better feels today’s zeitgeist.
Bitcoin is not the only disruptive crypto asset. Middelkoop noted that he invested 250.000 USD into a fund which is dedicated to DeFi (decentralized finance). That is an investment into platforms which are likely to be very disruptive to existing financial systems. Airbnb and Uber changed and disrupted traditional industries. Same with DeFi which is going to disrupt the traditional financial industry which was not updated for a long time. For example, if a person wants to transfer money internationally it takes 3 days. It can be done faster and smarter by using new technologies including blockchain. Today’s financial system operates similar to the way it was operating 100 years ago.
Middelkoop didn’t disclose to which exact DeFi projects he invested in. But these, among many others, could possiblity be:
- Terra (LUNA)
- Chainlink (LINK)
- Uniswap (UNI)
- The Graph (GRT)
- Aave (AAVE)
- SwissBorg (CHSB)
- Quickswap (QUICK)
Below you can find a full Stansberry Research interview with Willem Middelkoop.