Announcer: You're listening to Ask The Expert on Sprott Money News.
Craig: Well, greetings once again from Sprott Money News in sprottmoney.com. This is your Ask The Expert segment for December 2017. I'm your host, Craig Hemke.
And, joining us this month is a return visit from Jim Willie. Many of you know Jim Willie. You can find his work at GoldenJackass.com, but he is the editor of the Hat Trick Letter. He's been doing that now for almost 14 years full of great forecasts, out-of-the-box thinking, and it's always a treat to have him on here for Ask The Expert. Jim, thank you so much for taking some time with us today.
Jim: Oh, it's a pleasure. And I needed a break. I actually started at 6:00 in the morning and I need a break after four hours of solid work very early.
Craig: Well, let's get right at it my friend. And before we get started, just a reminder, great time to be buying physical metal. If you're trying to figure out where to store it, you can sign up for Precious Metal Storage with Sprott Money and get one month of free storage. You gotta visit sprottmoney.com for more info though. All right, Jim, the format for this is that we've been collecting questions from Sprott Money customers all month long. I've got seven questions for you, and if you're ready, I will hit you with the first one.
Jim: Go for it.
Craig: All right. Question number one, again from a Sprott Money customer, one of your theories is that there will soon be two versions of the U.S. dollar an international version and a domestic version. Do you still see this coming in the years ahead?
Jim: I see it more than ever before. As we see the rollout of numerous and diverse non-dollar platforms, and you see the pressure for the Chinese to purchase Saudi oil in RMB terms, the Chinese currency, the petrodollar is coming to an end. It has been coming to an end for quite a while. Numerous events surrounding the demise of the petrodollar but pressure is on Saudi right now, with leverage that the Chinese might use of Aramco and its investment.
We'll invest a hundred billion in your Aramco if you permit us to buy your oil in RMB terms. That would be a very significant blow, and now you have another significant blow with the Chinese coming out with their oil RMB futures contract, completing the triangle of oil-for-gold in Shanghai, and now oil-for-RMB in Shanghai. That completes the oil-gold-RMB triangle.
You just can't make it any more clear that the dollar has to go away in terms of the global reserve currency, which means, trade payments and bank reserves. The pressure is on, and I think we're gonna hear stories, not before long, that U.S. importers into the U.S. are gonna have trouble securing the products in shipments from the Asian and foreign suppliers because they're not gonna accept Treasury bills anymore. It's coming very clearly. I see it more clearly than ever before.
Craig: All right, fair enough. Let's move on to question number two. You've mentioned in the past that there are huge premiums being paid for physical gold in size. Are your sources still indicating that that's the case?
Jim: No, it's not and has not been for the last few months. I did kind of a post-exam analysis of that with the person involved and with some other key people who know a lot about what's going on in various points around the globe on the gold price and here's what I concluded. That a premium was paid on many sales, but either one side or both sides had, I don't want to call it dirty, I don't have the right word for it, but let's just say, difficulties on the supply side.
Like, for instance, the gold came from the destressed region of Congo, or a neighboring country and it was all smuggled gold through routes into the Middle East gold trading center or on the other side. Maybe it was dirty money like say, Russian mafia money or Indian smuggled cash, and they finally accumulated a hundred million, and they wanted to go buy some gold.
So, either it was underground money during the buying or underground supply coming to the market. And I think that's what was going on. But, right now, there's purchase in size at these COMEX corrupt prices.
Craig: I would just add on Jim. Have you heard anything about silver? Is there any tightness there?
Jim: No, it's pretty much the same story.
Craig: Let's move on to question number three, my friend. The manipulation and suppression of gold prices just almost seems endless at this point. In your opinion, how much longer will this suppression scheme last? And, what will finally end it?
Jim: You know, I simply cannot answer the question of when. Is the U.S gonna conduct an invasion of Venezuela and Italy with their military? We don't know. Is the U.S gonna enter the Yemen war because they got pushed out of Syria? We don't know.
So, what I continue to focus on is the event schedule, not the calendar schedule because I don't know what additional war, or what additional murders, or what extreme additional pressures, will come to certain financial markets to extend this game further because that's what has extended the game.
I'm noticing something very interesting happening though. And that is Basel, Switzerland, the home of the Central Bank headquarters, Bank for International Settlements, they've gone public by saying they're not gonna supply any more gold to the market. Which begs the question, where did you before? And I think they supplied London.
London has come out in many statements saying that they have a very, very tight supply. And I think they're basically, you know, a waystation for shipments from another source. Say, they don't produce anything, they don't have even, I think, a vault. I think London's out. And the question turns to the Vatican, therefore. Is the Vatican supplying London? And, there's no comment at all that the Vatican has stopped their supply. I think there's some very strange pressures going on with the Vatican to keep their supply in continuation.
You gotta turn your attention to the rollout of the non-dollar vehicles and platforms. They're many. It's the AIIB for infrastructures. It's the One Belt, One Road for the entire cornucopia of Eastern and BRICS nations, and emerging market nation's projects, multi-billion dollar projects. You have to look at the Cross-Border Interbank Payment System, the CIPS.
It's not the Chinese Interbank, it's the trust border that's a competitor to SWIFT. So, the Chinese and Iranians will be using that in a very big way because the Iranians have a SWIFT sanction slapped on them. You have to look at the other things too. There's a new BRICS gold trading market platform right now, and they've been very open and vocal that they will not be using any paper contracts, future contracts, price discovery futures element. None at all. It's gonna be, "Where's your money? Here's your gold."
That has a potential for killing COMEX, which brings up a question, if you're an Easterner, I don't care where you're from, and you wanna buy a cartload of gold bars, would it make sense to continue to go to London where you get their stupid-ass discount instead of going to, say, the BRICS new shiny offices where you can buy gold, and they're gonna let the price rise? They're not gonna go and arrive at the new Goldmart's arenas if they can continue with the London purchases at the discount price.
So, if you do see volume coming to Shanghai, Hong Kong, or this new BRICS gold arena, it will mean they can't get any more London gold. So, I'm looking at the various platforms and the most recent, well, before this week, the most recent was the Chinese Shanghai oil-for-gold futures contract. In the last week, the most recent have been the BRICS gold arena without futures, and the Chinese, I think it's Shanghai, oil-for-RMB contract. I love this triangle, oil-gold-RMB. It's a death warrant to the petrodollar.
So, how much longer can it last? I don't know. How much longer before a new war or new murders? We don't have an answer to that question. What will finally end it? The non-dollar platforms. The Voice made a comment two months ago of extreme significance to me. He said that the oil-for-gold Shanghai contract was very well stress tested, and the first of several non-dollar vehicles and platforms to be rolled out in the next 12 months or more, each one separated by two or three months.
So, the August oil-for-gold, now the December oil-for-RMB. That's four months apart. We're on track. They're gonna be new. He said, "Look for the new rollouts to get integrated with the previous rollouts so that by the time you get three or four of them, not only will it be clear that the objective is to defeat the dollar and remove it as the global currency reserve, the objective will be seen clearly as an integration happening before our eyes that enables exactly that to happen.
Craig: Jim, you've actually segued right into question four for me because question four continues on that path, which is simply, will the Chinese yuan-based crude oil contract have an effect on the petrodollar? So, I'll just work question four right there and just let you continue to expand on that thought if there's anything more you wanna add.
Jim: I think it serves notice to the petrodollar that, "You're on death row." It's not that in the morning you face death. It's, "You're in a prison cell and all those guys, who are your neighbors, are going to get the lethal injection. And it's just a matter of time. Your appeals are over." Now, those are strong words. But, I said before, the Chinese can use leverage with the Arabs, not just the Saudis. They could offer a nice huge sum of money to the Saudis for an investment in Aramco.
And, you know, think of it this way. If the Chinese are 10% or 20% owners of Aramco, don't you think that means they're gonna have a board member? Don't you think that means that they're gonna have a vote toward accepting RNB on oil sales to China? Well, heck yeah. Okay.
Now, there's a fly in that ointment, and that's the arrest by Prince Mohammed bin Salman of lots of royals and big businessmen. And, I hear figures that he's collected a hundred billion dollars that might have put the Aramco deal on the back burner. Let's see if he can secure that money because I've got other clients who say, "Well, you know Jim, it's not like that. A hundred billion is just sitting around in the Saudi sand in their banks. It's all over the world, and that can get blocked from coming back to Saudi."
And who would block it? Maybe the Rothschild Satanists who had a couple of their boys arrested like Prince Bandar, like Prince Alwaleed. I think those are Rothschild boys. Okay, so yeah, this Chinese RMB oil contract serves notice to the petrodollar and is going to make it easier for other countries to buy oil, like from Russia. This could be the forward price mechanism. Like, suppose you got India, they wanna buy something in March, so they get the March contract price it in RMB terms, and Russia delivers on it. This contract is huge for undermining the petrodollar. It's oil sales outside the dollar in structure, very important.
Craig: All right, Jim. Moving on to our final three questions. Again, these are submitted by sprottmoney.com customers, a lot of sprottmoney.com customers are Canadian. No surprise there. So, question number five deals with the Canadian dollar and this person just wants to know if you have a long-term outlook for the Canadian dollar.
Jim: Very tough question. Three big, big factors. The first is the oil price. Notice the Canadian dollar has been very correlated with the oil price. I mean, it was like 85/90 before the oil price got slammed. And now it's 73, 75, right in there, I don't have the exact number in front of me.
Okay, so, will the oil price come back? I really don't think so. I think the Wall Street magicians are doing whatever they can, in their corrupt ways, to lift the price toward 60 because they wanna get out of a lot of their debt that they have with the shale industry and other organizations in the energy sector.
So, it's either commercial loans that Wall Street has or actual bonds, corporate bonds, with the energy companies, exploration production companies. I just don't think it's gonna work. And there's a very good reason why it's not gonna work, and as the global economy is in turmoil and very deep recession, and Iran is now selling oil in big, big volume.
The second factor, important for the Canadian dollar, is that the relationship with China and their investments, especially in Western Canada. I don't think there's gonna be a continuation of Chinese investments into the oil patch, the tar sands. Looks like China has got huge production lined up with Russia and new production lined up with Alaska, which could mean that Canada and the tar sands get left out. That does not bode well for the Canadian dollar.
The third is just generally the global economy is mired in a recession. The United States is now in its 11th consecutive recessionary year because you've gotta subtract the lie in price inflation and reduce the GDP growth by that amount of lie and the amount of lie, tends to be 2%-5%. So, I don't think the Canadian dollar is gonna do all that well until they're forced to come up with an asset-backed currency.
And then, it becomes a question of, how much gold do they have? How quickly can it be brought to market for reserve purposes? And, what is their debt looking like? I don't think they're in anything like the debt nightmare that the United States is in regarding federal debt and trade deficit. United States cannot go on to the gold standard because in the first year they'd lose 13,000 tons of gold. Now, if they double the gold price, they'll only lose 6,000-7,000 tons of gold in the first year. If they triple the price, they'll only lose about 4300 tons of gold in the first year.
United States still has an import-export imbalance. I don't think Canada has that, and I don't have the figure before me of what their national debt is, but I don't think it's anything like one-tenth of the United States $20 trillion. I don't think Canada is gonna fare well with their currency until they're forced to come up with a real asset-backed currency because their fake currency now is just that, it's fake, just like the dollar and has no basis, has no backing, has no reality to it. And, let's face it Canadians don't even have a real president. They have a Mickey Mouse.
Craig: And, they sold all their gold reserves a couple years ago.
Jim: Well, they have the honesty, Craig, to admit that whereas the Americans continue to lie.
Craig: Good point. All right Jim, just two quick questions as we begin to wrap up. Question number six has to deal with cryptocurrencies and your opinion on them. Is Bitcoin an alternative to physical gold and silver or is it a complement to owning physical gold and silver?
Jim: It's an alternative to the dollar. It serves a role in a transition. First of all, it's a symptom that QE and the hyper monetary inflation has gone out of control without remedy. It's a symptom that the dollar has no backing. You know, the cryptocurrencies now by and large have no hard asset-backing. They have a backing of legitimate transfer, transparency, and electronic work.
That's all well and good, but that's not money. That's more like just an electronic version of a sophisticated version of fiat currency. I think it's gonna serve a very important role, but I'll tell you one thing that I'm suspecting Craig, I'm thinking that the powers that be Wall Street, Central Banks and governments are permitting it to rise. And they've got some surprises coming right around the corner, maybe in January and February.
I think they're gonna criminalize it and force their owners and account holders, and wallet holders into the new government-sponsored cryptocurrencies that will have centralized control, and not as much transparency as they claim, or else the wallet holders and crypto owners will be facing criminal charges, and confiscation, and who knows what else. Could be the cryptos are a transition tool by the elite cabal to move people or to steal. They could just, you know, unleash their quantum computers at Langley.
Craig: Well, and we're almost out of time Jim, but that would tie back into the very first question which is, how would you roll out an internal domestic U.S. dollar? Well, maybe that'd be one way they do it, have it be a crypto-based.
Jim: They might try it. I think it'll fail because it'll be centralized and not transparent.
Craig: All right. Lastly, Jim, you've been quite open of your decision to move from the U.S, gosh, I think over ten years ago. This last question just simply deals with that, for someone looking to expatriate themselves now from U.S., Canada, wherever, which country do you think would be best?
Jim: Well, first, let me explain very quickly why I left. I got a death threat from Swiss bankers in the spring above six, related to 9/11 type stories, disclosing what I called the fascist Nazi playbook on the event. The second reason I came was a second death threat by U.S. Homeland Security, again related to the 9/11 events. If the 9/11 official story was true, then there's no need to threaten people who call it a lie.
I've been here 11 years now. I don't really regret my move. I regret some decisions that I made once I got here. If I had to do it over again, putting myself in the questioner's shoes, I would have taken a lot better look at Panama. If you don't mind extreme poverty, government corruption, and the absence of the opportunity to expand a business, Nicaragua is great. And, I'm not intended to make a joke with that.
If you're a pensioner, you want a sedate life with tremendous weather, and they'll leave you alone as long as you don't try to grow a business. I mean that's a very funny statement to make. I mean, I know a guy who knew a guy, who had a little real estate agency. And once he opened the third office, the government just slammed them, claimed them of doing some stupid things and confiscated the three offices. So, if you're a pensioner, and you don't mind poverty, and you want great weather, and you just wanna be left alone, and cheap prices and nice people, Nicaragua is great.
If you want the fast lane, and you want a business, and you don't mind high prices of apartments and condominiums, and you don't mind some crowded environment because of 150,000 Venezuelans moving in, Panama is great. You got a canal, and they got a self-sustaining economy because they bring in eight to nine billion dollars a year from the canal on rent passage fees. If you don't think that's a lot, consider the Panama population is 3-plus million, U.S. has 300-plus million multiplied by a hundred, do you think the United States would do well if all of its ports and canals brought in $800 to $900 billion dollars a year? Hell yeah.
They've got the import-export industry and the Canal Zone in Panama and a lot more honesty than you see anywhere else in Central America. I mean, some people think Brazil is wonderful. I've got a couple friends who think Colombia is wonderful. They say, "Jim, come on down. When are you gonna come?" I said, "I don't even wanna go there. I might like it too much."
Prices are low in Colombia. It is hard for Americans to get a bank account. They just don't like Americans at the banks. Everywhere else, restaurants, small businesses, clothing outlets, whatever, they love the Americans. They hate our government. They love the people. You hear that all through Latin America, "We hate your government, love your people."
I really think Panama is a great place, but I'll never avoid saying Costa Rica has a lot of nice things going for it. And, I don't have any regrets for being here. They treat pensioners very well here. They treat Americans buying a condo or a home very well here. I have permanent residence here now. This Christmas would be 11 years.
Craig: And, at this point, I think it's time to wrap up. I wanna thank you again for all of your time and for all that you do. Again, we've been speaking with Jim Willie. You could find his work at GoldenJackass.com. And he is the editor of the Hat Trick Letter subscription service. Jim, thank you so much for all of your time.
Jim: It's a pleasure being on, and I look forward to the next holiday. They sure do rack up quickly. I wonder where 2017 went. But, it's not been a real pleasant year. I'm kind of glad to see it go. I think 2018 is gonna be a lot better personal level for me. But I also think 2018 is gonna be the year when the platform's anti-dollar start to show their force in unison. It could be the year that Americans wake up to the fact of what the dollar is and what the global currency reserve has meant to Americans for a generation.
Craig: Sounds good. Well, thank you, Jim. And, from all of us here at Sprott Money News and sprottmoney.com, Happy Holidays. Happy New Year. And on your way out, don't forget for your holiday needs, the 2017 holiday catalog is available at sprottmoney.com. Make sure you check it out and pick up something for your loved ones today.
Again, you've been listening to Ask The Expert for December 2017. Thank you for listening, and we'll talk to you again in 2018.