 Jim, thank you so much for joining me on today's show. I've been following your work for a while and you're the best-selling author of many different books, but a couple of questions I wanna kind of talk about today. Obviously it's topical what's happening with the economy today, the response what they have for COVID. My question for you is, in Rotoruin, you outline ICE9, and I know you've spoken to death about ICE9 probably a million times, but the reality is a lot of people aren't aware of it and what it is. So if you can just spare a minute and kind of educate my audience on what is ICE9? Sure, I'd be glad to talk about that. And what's interesting, I'll describe it in detail, but it has now kind of permeated the conversation. You see ICE9 used in a lot of message traffic, Twitter feeds, interviews, and I kind of nicked it from Kurt Vonnegut to begin with, so I'm happy to see it out there without a lot of credit. That's fine, but it is a very useful concept, so let me explain that. So the idea came from a 1962 novel called Cat's Cradle by Kurt Vonnegut, very well-known author, wood-winning author, and it's sort of gotta be a certain age, but it was at the height of the Cold War. We were worried about nuclear annihilation and in this novel, Kurt Vonnegut imagines a writer's bed of physicist who came up with an isotope of water, very similar to water, with a slight difference. It was frozen at room temperature, and if that isotope came in contact with regular water, the water would freeze, and he put it in a very small vial and gave it to his children, and so the idea is if you poured it into a stream, let's say the stream would freeze, then the river would freeze, then the oceans would freeze, and then the planet would freeze and life on Earth would die. So it was a doomsday machine, which is one of the things we talked about in the 60s. So I took that concept and applied it to finance and looked at the possibility of a sequential or cascading shutdown of financial venues on the following scenario. So we're in one now. I mean, we're in a, this is certainly a depression. We talked about the economy a little bit. We're not quite at the financial panic stage. There is a difference between recessions and depressions on the one hand and financial panics on the other. Sometimes they appear individually, sometimes they appear together, but at least so far we're in the depression stage. We'll see how the financing side of it works out. But what happens is everybody wants his money back. Everybody wants liquidity. And so it tends to find expression in a particular exchange. So everyone just starts selling stocks, stocks, stock markets crash. They become disorderly and you have to close the stock market. Now we've seen small examples of that. We've seen the circuit breakers tripped on the New York Stock Exchange. The exchange floors closed. The exchange itself is still functioning, but the floor is closed. So kind of tiptoeing up to a little bit, but you close the stock exchange to stop that disorderly trading. What happens is the demand for liquidity does not go away. It simply redirects itself like a river flowing to a new venue. So the next place might be money market funds. So people call up and say, all right, call the brokers, sell my money market funds, send the money to the bank tomorrow. Well, those money market funds have assets that are not necessarily as liquid as people believe. And so they start dumping, commercial paper, CDs, various kinds of IOUs and short-term treasury bills and so forth. So then that market is under stress because they can no longer meet the redemptions at par dollar for dollar. So you close the money market funds. So then the pressure goes over to the banks and people line up at the banks and then sooner or later you have to close the banks. So the point is the closure is the ice or the freezing of accounts, freezing of exchanges goes from exchange to exchange until finally the entire financial system is locked down, at least temporarily, until the authorities can figure out what to do next. So that the original ice, not analogy of water freezing sequentially and all life on earth dying as applied to finance means that these different venues freeze and lock down sequentially and eventually there's no liquidity at all. Now, if that sounds far-fetched, it's not. In the beginning of World War I from August to December 1914, the New York Stock Exchange was closed for five months, just closed, as was the London Stock Exchange was all over the world. In 1933, our president, Franklin Roosevelt issued an order of closing the banks and just all the banks were closed by executive order. And he didn't say when they would reopen. In fact, they were reopened about eight days later but he didn't say that just the banks were closed. 2013, the banks and Cyprus were closed. 2015, the banks and Greece were closed. People in Athens flew to Frankfurt with empty suitcases and loaded up on euros, paper euros and flew back to Athens because the credit cards didn't work, the ATMs didn't work, the banks were closed, et cetera. The banks in Lebanon today are closed. So these things have happened historically. They do happen, not on quite the scale that I was describing, but we came extremely close, extremely close in 1998. You know, the Russia long-term capital management, fiasco rescue, whatever you wanna call it. And by the way, I had a front seat on that. I negotiated that bailout on behalf of long-term capital management, but we were hours away, hours away from the sequential closure of every stock exchange in the world. We'd begun in Tokyo, spread to Europe and then ended up in New York. The money got in, you know, the $4 billion changed hands and the press release was issued and it kind of, it didn't happen but it came uncomfortably close. Also in 2008 we saw this. So in March 2008, Bear Stearns failed. In June, July, 2008, our big mortgage institutions, Fannie Mae and Freddie Mac both failed. They were taken over by the government. And then a lot of people, we either sigh relief and said, well, okay, the problem's over. You bailed out Fannie Mae and Freddie Mac. No, September 15th, Lehman Brothers failed. And in September, AIG came quite close to failure. And Morgan Stanley was days away. Goldman Sachs would have been right behind it. And that's when the Fed intervened, truncated the process. Goldman was turned into a bank, Morgan Stanley was turned into a bank, et cetera. But my point is we've had two close calls, 1998 and 2008. Here we are again, we're not there yet, but this needs to be borne in mind. And it's one of the arguments for having some access to physical gold bullion, physical silver bullion, paper cash, don't, you know, it would be trivial to reprogram ATMs to limit the withdrawals to say $200 a day for guests and groceries. The government can say, well, I will give you $200 a day so you can, you know, buy some food, but that's all until further notice. Until, you know, whether it's the IMF or the leading central banks or treasury or finance ministries get together and work out a plan. So it's a real possibility. It has happened in some form many times. It is not far-fetched and we've come uncomfortably close twice in the last 20 years. So that's what I mean by ice nine. And whenever you see a particular venue get shut and it does happen, this specter emerges. My follow-up question is you mentioned the river flows. Liquidity has to go somewhere. And you just mentioned gold. What's your thoughts currently on our economic status with gold? Cause we saw for a brief period of time the liquidity crunch. So all assets are being liquidified for cash, but your long-term, let's say your long-term insights on gold currently. Well, I've always recommended gold at about 10% of your liquid assets or investable assets, I call them. And when I say that, don't include your home equity, don't include your business. You know, you don't want to gamble with your house and your business. That's your livelihood and the roof over your head. But putting those two to one side, your other assets, those are your investable assets. You can put them in the bank or buy stocks or do whatever you like with them. I recommend 10% of that in gold. Now, the interesting thing about gold, you know, I recommended it at $1,100 an ounce, you know, US $1,200 an ounce, $1,300 an ounce, $1,400 an ounce, $1,500 an ounce. And people would basically yawn and say, you know, whatever and occasionally people, you know, I do a lot of public speaking and people come up to you after the presentation and they say, Jim, you know, I listened to you carefully. I agree with everything you said. I see this disaster coming. Please call me like three o'clock the day before and I'll sell my stocks and go buy some gold. And I have a two-part answer to that. One is I'm not gonna know the day. I can tell you what's gonna happen. I did tell you what's gonna happen in my books and speeches. I can tell you how bad it's gonna be, but I won't know the exact day. And if I did, I might be a little busy that day myself. But my real answer is what are you waiting for? If you agree that this kind of collapse is coming, why wouldn't you buy your gold now? First of all, at a more attractive price. Secondly, when you can get it. And the other warning I gave was that when you really, really want your gold, when you want it the most, you won't be able to get it. And that's the point. And that's the stage we are today, which is, you know, I don't know if our listeners or viewers have gold or not. That's up to them. By the way, I'm continually accused of being a gold deer. I'm not, I don't sell gold. If you buy it, don't buy it. That's up to you. I just want to clarify, you're recommending buying the physical gold. Correct. Correct. And we can get into the reasons for that because that is the only form of gold. So, yeah, so I kind of recommend that. But I've always said to people, what are you waiting for when you want it, you won't be able to get it. That's where we are now. So once it hits $1,600 plus everything else that's going on, which I'm sure the listeners are quite familiar with, today it's over $1,700. You know, it's volatile to see where it goes. But now everybody wants it, you can't get it. The, a lot of the Swiss refineries were closed. One of the biggest ones just reopened, but they're only working at about 30% of capacity. The Brinks Distribution Center warehouse, basically one of the largest gold vaults in the world at JFK airport in New York, is working at half capacity because they want to, you know, obviously because of the risk of infection. There's another Brinks distribution center in Salt Lake City and they got hit with an earthquake about 10 days ago. So they're still assessing the earthquake damage. The Royal Canadian Mint was closed. I think it's reopened now. The US Mint is open and producing gold coins, but they're back ordered by a year. So if you call them now, they won't, if you're a dealer, they won't take your order. And most of the dealers are running out of inventory. So good luck finding it if you can. I mean, if you're the central bank of Russia, you can probably lay your hands on some. But now that everyone wants it, you can't get it, which is completely predictable. It's what we call conditional correlation. But, you know, keep trying. And, you know, my view is that gold will go much higher. And when I, I would say, you know, range of 10 to $15,000 now, so over the next two to three years and perhaps as high as $5,000 now by next year. And when I say things like that, people kind of roll their eyes like, you know, I pulled the money, or sorry, I pulled the number out of the air or I'm trying to be hyperbolic. I'm not, there's good analytical and empirical methodology behind that. Let me just give you a real quick example. We've only had two great bull markets in gold. And the reason for that is that prior to 1971, we were always on a gold standard. So you didn't have a bull market or a bear market. You just had a fixed price. Now, whether the governments could maintain it is a separate issue, but there was always a fixed price for gold with, you know, periodic very abrupt devaluations. But in terms of a free market for gold, that really dates to 1971. We've had two bull markets. One was from 1971 to 1980. Gold went from $35 an ounce to $800 an ounce. And that's about a 2,600% increase in nine years. The second great bull market was 1999 to 2011. Gold went from $250 an ounce to $1,900 per ounce. That's about a 670% gain over 12 years. So those are our two data points. So just taking the average of those two, I don't have to be hyperbolic. Don't have to go outside the boundaries. Just take the average of those two bull markets that comes to around 10 years and an average gain of around 1,300 to 1,400%. Well, if you apply those numbers to the end of the last bear market, which was December, I can tell you the day, December 16, 2015. Because we had a bear market from 2011 to 2015. We hit the bottom on December 16, 2015 at $1,050 per ounce. So apply my 13 times gain and my 10-year horizon. Come forward, you get to $13,000, $14,000 an ounce by 2025, although no reason to think it couldn't be higher than that even sooner. So that's not an extreme forecast. And when you're doing absolute dollars, and you're not a logarithmic chart, but just absolute dollars, each $100 per ounce gain represents a smaller percentage of wherever you started. So you can see those very large gains gapping up towards the end of a bull market like this. So even at $1,700 an ounce, which is where it is lately, there's still plenty of time and plenty of room to participate. But again, my answer to people is don't wait. As far as what I call paper gold. So yeah, people buy Gold Futures on the Comax, they'll buy unallocated gold forwards from banks who are members of the London Bullion Markets Association. They buy Gold ETFs. They buy shares and gold funds, et cetera. And they go, I've got gold. And I say, no, you don't, you have a contract. And let's see how the contract is honored. And exactly as I said, when you think there's liquidity, but everyone wants it at once, the liquidity disappears, that's called a conditional correlation. But the same token, when gold is most in demand, we're not quite to the super peak frenzy stage yet. I think we'll get there, but we're not. But as we approach that, you'll find these contracts will not be honored. And for example, it can just be very specific. The Gold Futures contract on the Comax, the Commodities Exchange part of the CME Group, trades electronically. So they have designated gold warehouses. There's a certain amount of physical gold in the warehouses, but that amount of physical gold is trivial compared to the value of the gold contracts outstanding. So what would happen if all the people who were long futures stood for delivery? And there's a procedure for that, which is, you know, you just put in notice, say, you know what, I don't wanna roll over my contract, I don't want to pair it off or buy it back, just send me the gold. And you can do that. And they've always allowed that because they wanna maintain the basis between the physical and the paper gold prices. But if the open interest is 100 times the physical gold and everyone wants this gold, are you gonna get your gold? The answer, of course, is no. And so they have a rule. I'm actually enough of a geek. I've read all these rule books of all the exchanges. I'm a lawyer, by the way. So there's a big part of my career is kind of regulatory practice. But every major exchange has a rule that says they can change the rules. And so when they do that, everyone wants, oh, you know, you changed the rules. They go, well, no, we didn't. We have a rule that says we can change the rules. We got red. So what they do in these situations, it's not quite, it isn't the train wreck people imagined. It isn't in the following sense. When the demand for delivery overwhelms the amount of physical gold, the issue in order that says you can trade for liquidation only. What that means is that if you're long, you can sell and close out your contracts and collect your winnings, or you can roll it over to a future month. But you can't get the gold. You can't get the physical gold. And that will kind of save the exchange. But you're sitting there saying, well, no, no, I want my gold. This is why I did this. I'm sorry. They'll send you a check for your profits. I'm not saying they're gonna steal your money, but they are gonna deprive you of the opportunity to get your hands on gold. And the exchanges all say, we are not a source of supply. We only allow a limited amount of physical delivery to maintain the basis, but we're not a source of supply. So you'll be disappointed there. Now, LBMA, unallocated gold positions or gold forwards, the word unallocated should give you a clue. What that means is you have one 400 ounce bar, they could have tons of it, whatever, but just use an example of one 400 ounce bar. They can sell that bar to 100 separate investors and they do. So there are a hundred people out there who think they own a 400 ounce bar and they have a contract that says that, but there's only one bar in the vault. It's the same thing I described with the futures exchange. Now, those customers can send notice to the bank and say, please convert my account from unallocated to allocated. What that means is that, okay, now there's a bar with a serial number and there's a register, a ledger, and your name's on it, you own that bar. Well, how are they gonna do that if everyone, if a hundred customers say, please convert to allocated and they only have one bar? Well, they're gonna have to go out and buy 99 bars in my account. This is fractional reserve for gold. Well, no, it is, except there's even more leverage in the banking system, if you can believe that. So they're gonna have to go buy 99 bars to do that. Well, I just described you at the beginning of the interview how you can't get any gold right now. Yeah. Refiners, so they can't do that. So what will they do? Again, the geek in me has read these contracts, there are force majeure clauses, there are termination clauses. They'll send you a notice saying, sorry, your contract has been terminated as of the close of business yesterday. Here's a check for your profits. Nice knowing you. And you'll say, well, no way, where's my gold? I'll say, sorry, read the contract. And so, and same thing with ETFs, I don't have to get into all the technicalities of all these, but my point is simply, an ETF is not gold, it's a share. It's a share and a trust right on the new stock exchange. What if they close the exchange? What if, et cetera. So my point being, people who think they have gold in paper form via futures, forwards, unallocated forwards, ETFs, et cetera, don't have gold. They have contracts. Contracts have escape clauses, termination clauses, force majeure clauses, various covenants. They can all be terminated, they will be terminated when the time comes, and those people will not get their gold. Jim, I wanna thank you so much for coming on the show, sharing your insights. Final question, if people wanna learn more about your read your books, what's the best resource? Thank you very much. A couple books that are selling very well right now, and I think are most on point. My book, The Road to Ruin, actually has a whole chapter on Ice Nine, which we talked about. I have a shorter book called The New Case for Gold, and a lot of things people think they know about gold are actually not true, and I go through them one by one, so hopefully that's informative. And my last book, Aftermath, which came out last year, more or less predicts to a T what's happening right now, but it's still valuable in terms of wealth preservation strategies. Thank you, Jim. Have a great day. Thanks. Cheers.