Simulation theories have in recent years proposed that a cognitive agent's "inner world" can at least partly be constituted by internal emulations or simulations of its sensorimotor interaction with the world, i.e. covert perception and action. This paper further integrates simulation theory with the notion of the brain as a predictive machine. In particular, it outlines the neural pathways of covert simulations, which include implicit anticipation in cerebellar and basal gangliar circuits, bodily anticipation by means of forward models in the cerebellum, and environmental anticipation in the neocortex. The paper also discusses, to some extent, possible implications of the neural pathways of covert simulation for the frame problem, and the relation between procedural and declarative knowledge in covert simulations.