Ask The Expert

Ask the Expert - Jim Willie - December 2016

Headshot Jim Willie

Our Ask the Expert for December is Jim Willie. He is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at


Announcer: You are listening to Ask The Expert on Sprott Money News.

Craig: Well, greetings again from and Sprott Money News. This is your Ask the Expert segment for December of 2016. I'm your host Craig Hemke and joining us this month is Jim Willie. Jim is the editor of the Hat Trick Letter which is a subscription service that can be found at Jim, it's a pleasure to get a chance to visit with you and welcome to Sprott Money news.

Jim: It's a good... It's really nice to be on with you and I see we have a bunch of very interesting questions.

Craig: That we do. In fact, these questions have all been submitted by the customers of Sprott Money. It's their chance to ask questions of the Experts. We had a bunch of them this month and, for the sake of time, we can't quite get to all of them. But we'll do our best to try to get to as many as we can, maybe lump sum together to get answers from you. If you're ready, I'll hit you with the first one.

Jim: Let's go.

Craig: Some analysts are predicting a decline in the gold price due to deflationary pressures worldwide. Do you agree with this idea and what do you expect for gold in 2017?

Jim: Well, to begin with, you have to define the gold price. Whenever I get clients say, "What do you think is going on with the gold price?" I'm kinda sassy and I say, "Well, define it first." Okay, the paper price for gold is not the gold price. That's a contrived, nonsensical contract with deep corruption. I think we're gonna see all paper assets lose their value. I'm talking about stocks, sovereign bonds including U.S. treasuries, housing and the fake gold price. They're all gonna go down. We're gonna see implosion of credit portfolios, the elaborate paper assets. They're all gonna go down. Expect a much wider divergence coming and I think it's already happening now, not soon but now. We're gonna see a growing...a wider divergence between the paper gold price and the physical gold price, okay. And this is already starting to happen.

The voice [SP] has said to me in very recent terms that he has very clear indications that extremely large purchases, like over 100 million dollars’ worth, you cannot get it under $2,500 an ounce for the bars. You cannot get it. And I've got confirmation from another source that says out of various corners of the world, if you want a sizeable... I asked him, "What do you mean by that? Like 10, 20 million?" And he said, "Yeah, you know, anything larger than 10 or 20 million, that's sizable." You cannot get it for under $2,000 an ounce, okay. So you've got a widening divergence between the paper gold price and the physical gold price. The paper price does not respond in any way, shape or form, to demand for physical gold. Expect a wider growing rift between the gold price in London and the Shanghai gold price. I think already now it's about $40.

Very large purchases do not come at the current dictated official price. It's pure corruption. I pay zero attention to it. When the banking system breaks down and the contagion hits and spreads, the paper assets are going to be crushed and you'll see that gold and silver will be the survivors and you're gonna be shocked at the prices. The systemic breakdown will release gold from these paper shackles.

Craig: Let's move on to the second question then because it has to do with the silver price. Given the depleting global mine supply and the already low above ground supplies of silver, what is holding back the price of silver and why is the gold-silver ratio so historically high?

Jim: With the same thing. We have corrupt paper pricing at the Comex. I mean, we seem to get this question every single month and I ask the question back. Where have you been for the last 10 years because this phenomenon has been the case and the standard and the rule and the official way of pricing for over 10 years, right in front of your face. Why do you keep asking the same question? Are you not paying attention? Do you not understand the concept of corruption? When you see that three months of silver supply is sold in one hour by paper without any delivery, does that raise your eyebrows? Does that arouse your attention? Where have you been?

Silver is being kept low I think for a different motive because it's a common street item in precious metals world that's used for purchase at purchase currency. I mean, if we really get a breakdown in a Mad Max scenario, you're gonna be seeing gold used to buy businesses, gold to buy cars, gold to buy houses, buildings, silver to buy groceries, silver to pay your bills, silver to buy gasoline, silver to settle off small debts between friends. There's absolutely no connection between the physical market and the paper gold or silver price. So please, quit asking the same question. It's the same answer. There's no relation between the physical market and the paper market. It's nothing but an amusement and a corrupt sideshow.

Craig: Yup, and that explains why the gold-silver ratio is so high. Jim, let's move on. The next couple of questions are more on the global macro level. The first one, and this is question number three, kinda goes with this theory that you've had that eventually there will be two U.S. dollars, one, domestically in the U.S. and one used for international trade and balance of payments. How will the two compare in value and their exchange rate?

Jim: Okay, this is an area of murky water because we don't really have any view yet on the new dollar. All we do is have a lot of motives and pressures coming to bear very soon. Okay, I mentioned a while ago that Bobcat Corporation, which makes the little forklift, some little trench diggers, the small time caterpillar type equipment, they're refusing dollar payment at the West Coast ports of the United States. And I've been making a story out of this and trying to promote it. I've had some... I had two or three very strange messages. I think they might be from Wall Street people posing as, you know, something else. And they say, "Jim, where do you get off saying that? I have maritime industry experience and it's all treasury bills. I don't know where you get your information." "Well, I'll tell you where I get my information. I get it from the companies that turned down the dollar. That's where. So where are you getting your information, you idiot?" I'm just so sick of lying and deceit and corruption. It's infiltrated every aspect of the U.S. life, business, society, obesity, everything, vaccines, everything. Okay.

So now I'm getting word that there are dozens of companies turning down the dollar. And, you know, I got one guy in France said, "Jim, I see absolutely no evidence yet of the gold trade note coming into view." And I said, "Well, you won't see it coming into view until it's in view. You won't see it arriving until it's here. You won't see it approaching until it's in front of your face and major news." Okay, the domestic dollar, I call it the new shy staler [SP], it will assure that the trade flows come, that the port facilities actually unload the cargo from Asia and other places, emerging markets, and this new shy staler will assure a corresponding payment. The problem is that the producers don't want to be paid in something that we're just printing that has questionable, illicit value. We're using it to pump up the stock market, to pay our entire trillion dollar U.S. government deficit. And we're using it to pay our bills for cargo on ships. And the producers of the cargo don't want it any more. It's gonna be a very wild situation coming.

Okay, so when the new dollar, the domestic dollar comes, it will end the global currency reserve, what I call "free pass" with forced foreign investments that John Connelly called "our debt but your problem." Okay. Now when it arrives, here's the ugly part. It's gonna force immediately some reflected value from the third world fundamentals that the United States has. We have a $550 billion annual trade deficit. I'm thinking that means an annual 30% devaluation until it begins to get resolved. And when it begins to get resolved, you're gonna see not a $550 billion but maybe a $460 billion trade deficit. That means maybe not a 30% devaluation the following year but a 25% devaluation. We're gonna need years, Craig, years like three, four years of a national emergency reindustrialization project. And Trump is perfect for the job in order to stop the devaluations of the domestic only dollar. I've had several conversation in the last few weeks with Americans and I conclude one thing: crystal clear, they have absolutely no concept of currency, absolutely no concept of the advantage of having the global currency reserve, absolutely no concept of the need for a domestic dollar, absolutely no concept of its devaluation pressures that come.

Okay, we also have a $1.4 trillion federal deficit. How do we finance that? We can no longer, with the new dollar, print money to cover our deficit. We're gonna have to devalue our currency in order to attract foreign currency, foreign investment, to cover our deficit. This is gonna be ugly to the third order. Okay, it must reflect...and this is the live wire. I'm trying to be quick. The live wire is that there's gonna be a desire internationally to identify and isolate the rogue nation. That is us, the United States. I always find it interesting that us is spelled U.S. The rogue nation is gonna be identified as the narcotics monopolist, the terror merchant via ISIS, the new world order agent and the headquarters for Agenda 21 and the global genocide. Therefore, they're gonna want to maybe do less trade with the United States, if it's possible to find a replacement.

Now, the other side, the international dollar, the U.S. is gonna lose control of this international dollar because, again, abuses like sanctions, like interference and swift transaction control and forced compliance like with FATCA rules, those are the rules that dominate foreign expatriates like living in Costa Rica or Panama or Hong Kong or Singapore or London or Switzerland who must comply with U.S. government rules and regulations for their dollar account. I expect China is gonna take control of the international dollar, make the new rules, get rid of the FATCA rules that no country likes. They don't like the extra cost. They don't like the extra bother, the paperwork. I've got people here who complain about it to me.

Expect these new international dollars to be forced into other new currencies in the following 12 to 18 months after the reset. Now here's the beauty: the international dollars will hold their value because they escaped the clutches of the U.S., exited the borders and will not be subject to the fundamentals of the U.S. economy with its half a trillion dollar annual trade deficit and over one trillion dollar annual federal deficit. They've escaped. And there's gonna be some pretty wild activity I'm hearing. Trump is gonna start a repatriation program with a graduated scale of taxes on repatriated money and I'm hearing there's $20 trillion out there floating in the world, in bank accounts, in cash, basements, shoe boxes you name it. And the U.S. wants it to come home. It's gonna get very wild I don't wanna get into that whole topic yet.

Craig: Okay, Jim. Let's move on to question number four and it kind of is along those lines where you're just discussing. What are the ramifications for the West of this new Silk Road infrastructure in the East?

Jim: This is an exciting project and structural program, infrastructure program, because infrastructure development precedes economic development. It permits, then brick and mortar, you know, actual fabrication plants. Once you have the infrastructure like the highways, the railways, the electronic ways, the Internet, the supply chain on the Internet, once you have them in place, then comes the enormous investment for actual businesses. Okay. The U.S. has got a message. They're being given a message: participate in this new silk world order as opposed to the new fascist world order, participate in the new silk road system, or be left out in the cold for multi-trillion dollar programs, contracts and construction projects, participate or be eliminated and isolated. Huge contracts are at stake within the bidding process.

Notice that Trump mentioned he wants to get into the Asian investment infrastructure bank? And the membership that Obama has not had any support for? Okay, Obama wanted, you know, the TPP in Asia and the TPIP in Europe. Okay, both are gonna be abandoned which means U.S. is gonna loose more prestige and be considered rogue nation as far as infrastructure global project. If we're not in the AIIB, you're not gonna be involved in the significant multi-trillion dollar contracts being awarded. The U.S. is therefore at risk because of their fascist, trade union programs promoted by Obama. Remember, the infrastructure and other investment outlays, they form the foundation for economic development.

Remember, what is the mindless Western economic thought pattern from the planners? Put cash in consumers' pockets and the economy will respond. That is moronic drivel proved to be incorrect in the last 20 years. Every economic stimulus plan with, you know, a minor tax rebate to people, putting money in their pockets for consumption doesn't do diddly as far as building the economy, creating new businesses and allowing capitalism to work and trickle down. War, by the way, is not part of the capitalist trickle down.

Craig: All right Jim. Two questions to go. How high are the risks that governments will eventually confiscate gold from citizens or perhaps initiate confiscatory tax schemes?

Jim: Near zero. I've been saying this for the longest time. If we haven't had gold confiscation by now, why do you think we're gonna get it soon? We've been in this vote for a long time, Craig. We haven't had any confiscation or hint of it. Why do you think we're gonna have it?

Craig: How about the tax scheme component of it, Jim?

Jim: They might put on some kind of a tax scheme but only after you see the price skyrocket. And there is precedent of that with the oil windfall profits that we saw in the 70's. And there was some rather prohibitive taxation for energy companies that, you know, they had oil coming in a flow, like a three to six month process under contract, huge gains. So the U.S. government, being the regular confiscation pack of flies looking for the feces to feed on, never producing anything on their own, always a parasite, they will look to tax it. But, you know, here's where it gets weird. If there's a bunch of gold or silver that's being held and it's not inside the United States, then the sale proceeds might not enter the United States. So they could tax something that they cannot grab. I don't believe there's gonna be any confiscation of gold or guns. If they do, I think there'll be a march on Washington.

Craig: All right, Jim. I wanna use that to segue to the last question. You mentioned earlier the Comex pricing, the paper derivative pricing structure that has been in place now for almost 40 years or a little over 40 years. What do you see for the future of pricing? And will the LBMA and Comex ever lose their power?

Jim: I think when the global currency reset occurs, and it's been delayed and delayed and delayed, we are gonna see, after the delays are done and put aside, we're gonna see a rather significant, catastrophic event regarding paper financial markets. I think stocks will lose ground. I think Bonds will lose ground. You're already starting to see that with the Treasury bond market that has actually surprised me because they've got machinery in place to fabricate artificial demand for the bonds. And it doesn't seem to stop the interest rate that the bond yield from going up toward 2.3. I've got a chart out there that says that what we should be seeing 3.0, 2.9% in the next couple of months.

And then there's some other reason behind that like satisfying the Japanese. We don't want the Japanese to sell their one trillion because now they're the biggest holders of Treasury bonds. But after the reset occurs, and believe me, there's murder, corruption, theft and a lot of intrigue like with, say, Indonesia's Grasberg mine, when this intrigue ends and the reset actually happens and the U.S. loses their ability to delay it further, you're gonna see a rather catastrophic event. It's gonna start slowly but then a lot of people are gonna say, "Well, wait a minute. If that's the case then what are my stocks really worth? Well, if that's the case and all this government debt with the United States is so horrific and not resolvable, what on earth are these bonds worth?" The answer is, next to nothing. We've had a rally in stocks for five years that has one signature on it. It's called QE. It's not based on fundamentals. You do have this wacky fed rate model that applies to stocks. Well, if the interest rates are really low then the price earnings ratio should be really high. Well, yeah, during normal times when you have real markets. But we don't have real markets.

I look to the Ron Paul quote. He said this a few months ago. "You can't really blame capitalism for the disaster that we're seeing because we haven't had any." Okay, the reset I think is gonna deliver the death blow to the Comex and the LBMA which is in London. It's a little bit bigger than the Comex. It's more like a, you know, a huge inventory structure with a market attached. And after the death blow comes to Comex and LBMA, then comes the entertainment from lawsuits: contract fraud, forced settlement in cash without metal delivery that's in the contract. That's in the fine print. Well, we're gonna see fraud. We're gonna see force majeure. And then we might possibly see some strange event but I just don't see confiscation.

They're actually doing a bit of a confiscation test ride right now in India. They're raiding certain small temples and taking their gold and giving them cash equivalence. They need the gold. It could be a test for the Western world to see what would happen if India does it. Will there be pitchforks and attacks on the palace? I don't know. I kinda doubt it. I think they're going to a meditation stage. I don't really know. In United State, I think they'll go to a pitch fork stage and a Molotov stage. So, you know, I'm really looking forward to this reset. And some of my biggest questions out there, because it's a lynch pin, they relate to what is the status of the reset? And the status seems to be stuck on delay. The U.S. will not let it happen because when they let it happen, they lose their free dollar. They lose their free payment structure for all the import. We don't make much of anything. We don't have legitimate money anymore and the world is sick of our using it to pay for tangible goods at ports.

Craig: Jim, I tell you, it's great stuff. And, unfortunately we've run out of time. But it has been...always fun to talk to you and it's always fun to hear from you. You've got such fascinating points of view. For someone that wants to learn more and get deeper into these issues, how do they access your website and how do they get your service?

Jim: I'll be very brief. It's, over twelve-and-a-half years now in business with the newsletter. The website has a free side with interviews and with public articles and their links. On the other side is a subscription service for the Hat Trick newsletter with the Global Money World Report to preserve the dollar and its corrupt power. And the other one is the Golden Currency Report which is, you know, street level stories on gold and silver and demand and supply and I include Russia, China and the petro dollar in that golden currency report. So go to, Browse around and sign up for newsletter.

Craig: Sounds good, Jim. Thank you so much for your time today.

Jim: It's been a pleasure as always, Craig.

Craig: And from all of us here at Sprott Money News, thank you very much for listening and we'll talk to you again next month.

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About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.