all that glitters

[/ dave /]

--

/  dave  /



It's a hot high noon in Dubai, United Arab Emirates. Faint, muggy
breezes are blowing in off the Persian Gulf; and in the shopping malls,
Mercedes dealerships, and air-conditioned Starbucks of this deliriously
prosperous city-state, loudspeakers are discreetly broadcasting the
muezzins' call to prayer. 

The call can also be heard, if you listen hard enough, inside a
12-foot-square, steel-and-concrete-walled storage vault located in Dubai
International Airport's heavily guarded cargo-holding facilities. But if
you're inside the vault, your mind is probably on other things. Like,
for instance, the $7.5 million worth of precious metal piled up around
you: five flat bars of chrome-bright palladium; two large plastic jars
full of powdery platinum sponge; 160 fat, tarnished loaves of silver;
and - on a single shelf, laid out one next to the other like babies in a
maternity ward - 58 slender, radiant bricks of 99.9 percent pure gold,
about 400 troy ounces each and altogether worth more than $6.5 million. 

These assets represent nearly half of the e-gold system's physical
reserves, and there are, arguably, sound business reasons for storing
them in this part of the world. Dubai, sometimes called the Switzerland
of the Middle East, offers the financial sophistication of a major
commercial hub, the low overhead of a mostly immigrant labor pool, and
the high security of a politely authoritarian mini-monarchy. 

But the truth is, the gold is here because Allah commanded it. Or at any
rate, because the passionate believers behind e-dinar - the network's
Muslim-friendly frontend - believe He did. When Douglas Jackson and the
e-dinar principals began the negotiations that culminated in e-dinar's
September 2000 launch, Jackson was told up front that a proper Islamic
currency requires a proper Islamic country as its base. Obligingly, he
moved some of the company's existing assets from ScotiaBank in Canada to
Dubai's Transguard repository (the rest remains with J. P. Morgan Chase
in London) and even rewrote his governance contract to give e-dinar a
limited veto over bullion transfers out of the vault. In return, e-dinar
agreed, in effect, to help market the e-gold system to the world's 1.1
billion Muslims. 

The pitch? Late one night in the lobby of one of Dubai's five-star
hotels, a 46-year-old Muslim named Abdalhasib Castiñeira lays it out,
sipping chamomile tea as he outlines a brief theology of money and
calmly prophesies the downfall of the worldwide capitalist imperium. 

A gaunt, neatly bearded Spaniard, Castiñeira is marketing director of
the Islamic Mint, a private institution dedicated to reviving as
international currency the coinage described in the Koran - the gold
dinar and silver dirham. He has placed on the table before him two small
gold coins inscribed with Arabic scripture. The Islamic Mint makes them
and they represent, says Castiñeira, the Islamic virtues of fair trade
and honest value. Give someone a piece of gold, the argument goes, and
you give him a real asset whose worth has endured throughout millennia.
"Whereas this," he says, pulling a crisp US hundred-dollar bill out of
his wallet, "is just a promise." Put your faith in it, and you submit to
a system ultimately controlled by governments and corporations, a system
that when it collapses - "all empires fall sooner or later," he says -
will take the dollar down with it.

"But if you hold this," he says, picking up one of the gold coins and
weighing it thoughtfully in his palm, "you are free." 

The coin in Castiñeira's hand contains 4.25 grams of gold, just as the
dinar did in the time of the Prophet. Likewise, and by no coincidence,
the e-dinar's primary unit of account is also 4.25 grams of gold.
Officially, the Islamic Mint and e-dinar are separate organizations, but
they're actually the off- and online divisions of a single project,
joined by ideological and personal ties. 

E-dinar's British COO, Yahya Cattanach, and his family share a communal
condo with Castiñeira in the comfortable Jumeirah district of Dubai. The
company's Spanish president, Umar Ibrahim Vadillo, is also the president
of the Islamic Mint. And finally, uniting all three men - as well as
e-dinar's Swiss CEO, Malaysian CFO, and German CTO - is one crucial
biographical datum: All are high-placed members of the Murabitun
movement, a modern, Western offshoot of Sufi Islam and possibly the only
religious sect in history whose defining article of faith is a financial
theory. 

There aren't too many Murabitun in the world; they number probably in
the thousands. But they are avid proselytizers, supported in part by
Dubai's royal Maktoum family, and they've established significant
communities in Germany, England, South Africa, Indonesia, and Spain
(though none is quite so impressive, perhaps, as the Murabitun outpost
in Chiapas, Mexico, a community of 600 local Indians converted in the
midst of the Zapatista uprising). Scattered though they are, community
leaders see one another often, convening regularly in the small Scottish
town of Achnagairn, home to the movement's founder and patriarch, the
71-year-old Sheikh Abdalqadir As-Sufi. 

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."