In Gold We Trust (continued)

"Look, we are against terrorism more than Bush is," Vadillo explains via email. "You want to be radical? You don't need to blow up the bank, just burn your bank account. And for that you are going to need an alternative. What is the alternative? E-dinar."

That's not to say Jackson shouldn't be worried about tainted money coursing through the e-gold system - or that he isn't. But what troubles him most are the Ponzi schemes: Hundreds of online pyramid scams have made e-gold (because of its convenience and because it offers bilked users no way to cancel charges) their payment system of choice.

It gives some sense of how much these operations have contributed to e-gold's bottom line to know that, to this day, the single largest holding in the e-gold system - $1.1 million in gold, 8 percent of total reserves - sits unclaimed in an account belonging to an alleged Ponzi that shut down a year ago. As for more recent activity, Eric Gaither of Gaithman's, one of the leading independent gold-currency exchanges, guesses that "at least 50 to 60 percent of e-gold" transactions are headed into or out of what he and others sometimes euphemistically call HYIPs (high-yield investment programs) or simply games. Other reputable exchange providers put the figure between 30 and 90 percent. "Frankly," says Steve Foerster, former CTO of G&SR and currently COO of Dominica-based gold currency 3PGold, "without online games right now there would be no gold economy."

For his part, Jackson vigorously denies HYIPs account for anything approaching a substantial portion of e-gold traffic. "These are piddly-ass little things," he says. "When you actually run one of these things down, they're pathetic." Still, he concedes, they're a PR liability, and he and his staff have been working hard to squeeze them out of the system. They've instituted "know your customer" rules to identify suspected swindlers, and they've cooperated amicably with law enforcement. When SEC staffers came to G&SR's offices last May to review the accounts of one of the biggest e-gold schemes ever - the self-styled "Christian-based humanitarian organization," E-Biz Ventures, shut down after allegedly inflicting losses of $8.5 million on investors - they were welcomed with coffee, bagels, and a conference room of their own. J. Chris Condren, the attorney charged with recovering E-Biz investors' money, has only good things to say about e-gold. "They've answered every question we've asked them, they've responded to every subpoena, every request for information."

Still, Jackson sometimes seems almost baffled that anyone could care who uses e-gold and why. It's all the same for him, for instance, that most users haven't a clue about the profound macroeconomic consequences he sees in e-gold. "They could be doing this for the dumbest reasons, we don't care," he says. "All we need is a growing circulation." For Jackson, the only thing that really seems to matter is what happens when the circulation gets big enough for e-gold to matter. Will he be proved right or not? Will e-gold bring about an epochal change in human destiny or won't it? And if it does, will anybody still care that once upon a time e-gold was a currency beloved of gun freaks, Sufi anarchists, and Ponzi schemers?

"You're going to have to make a personal judgment," says Jackson. "Am I some sort of dipshit visionary, you know, that's got some idea, but what I'm really doing is just sort of facilitating all kinds of sleazy stuff? Or in fact is this vision one that is achievable?"

So which is it? Take your time. And if you really want to get a handle on the question, try the following experiment. Go out and find a 400-troy-ounce gold bar, like the ones stored in the e-gold vault in Dubai, and pick it up. You'll learn something interesting about gold: It's heavy.

Maybe you think you knew this already. Maybe you know gold has a specific gravity of 19.3, and that this means it's 19.3 times heavier than water. Maybe you also know gold is heavier than any element known to humans prior to the 18th-century discovery of platinum, and almost twice as heavy as lead. But until you've held 400 ounces of it in your hand, you've probably never grasped just what sort of heavy this stuff really is. Relative to its modest size, the 27.5 pounds in a standard gold bar is so much weight it's nearly impossible to accept that gravity alone accounts for the force you feel as you lift it. You're tempted to attribute some additional, almost metaphysical, power to the metal - as if the gold brick in your hand weren't just undeniably real but a gleaming avatar of reality itself.

And whether or not Douglas Jackson actually thinks of gold that way, he sure tends to act like he does. Beneath the scaffolding of what he calls his "unassailable economic logic" lies the true foundation of his vision: the self-assurance of a man convinced he's discovered something as genuine as it gets in a world ruled by fiction and cheats.

This is why, despite Jackson's efforts to position his system as a serious financial player - a rival to the major currencies of the world - little e-dinar remains Jackson's closest corporate partner. Maybe Jackson wants to fix capitalism and maybe the Murabitun want to finish it, but both, at bottom, pursue a truth that isn't so much economic as it is spiritual. Both see in gold a purity that transcends the machinations of the merely mortal.

Which at least answers part of Jackson's question: Is he some sort of dipshit visionary? Well, no more or less, really, than Sheikh Abdalqadir As-Sufi, the Scottish redeemer of the Muslim world. As for whether Jackson's vision is in fact achievable - let's just say the odds of e-gold effecting an epochal change in human destiny are probably not much better than e-dinar's odds of bringing back the caliphate.

But both may be better than you think. Last June, Mahathir Mohammed, the irascible, authoritarian prime minister of financially beleaguered, mostly Muslim Malaysia, called for the formation of an "Islamic trading bloc." Like the Euro Zone, the bloc would have its own currency, yet with a twist: The "Islamic dinar," as Mahathir proposes calling it, would be backed not by anybody's faith and credit but by gold. As it happens, Mahathir seems to have gotten the idea for the gold dinar from none other than Jackson's associates among the Murabitun. If the proposal flies then there is a more than negligible chance that e-gold could become the base-money system for an economic community stretching from Indonesia to Morocco.

"I want to jump on that," Jackson says of the opportunity. Already Vadillo and the sheikh have met with Mahathir to make the pitch, and Jackson hopes to fly to Malaysia soon to drive it home.

Of course, convincing a major world leader to put the monetary fate of a billion people in the hands of a retired oncologist from Melbourne, Florida, is not going to be easy work. But Jackson doesn't seem to mind the challenge. "That's going to be an especially fun project over the next few months," he says. "I'm gonna have a lot of frequent-flier miles."

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