Interview With Free Market Money Guru, Jim Davidson of Vertoro

This is an interview with Jim Davidson of Vertoro http://www.vertoro.com/ .

Jim has been an ever present force in the digital currency world for almost a decade. He shares with me his ideas on free market money, precious metals and digital currency. I appreciate Jim taking time to answer my questions.

Where does the name Vertoro come from?

Vertoro is a combination of the French word “vert” meaning green, and the Italian word “oro” meaning gold.

So the name implies your motto, going from green American dollars to gold money?

Yes, that’s the idea. We think that it is vital for businesses and individuals to make that move from green to gold.

What are your reasons for urging people to do so?

The ones we tend to emphasize are going global with gold, hedging against inflation with gold and silver, and using free market currency to avoid anti-market forces.

Gold is a world currency and certainly one of the two oldest currencies. Gold and silver are both mentioned in the Old Testament, they were used in coins thousands of years ago, and they are widely accepted. In my own travels, I’ve been able to convert gold and silver coins to local currency in every country I’ve visited in Europe, Africa, Asia, and North America.

Inflation is a tax on wealth. If you hold your wealth as dollars, you get hit with that tax. The guys who make dollars, both at the printing press and in the banks, generate more dollars all the time. Since dollars are not in fixed supply, the value of the dollars changes. Generally, over time, monetary policy has been inflationary.

Gold and silver also expand in supply, as more of these metals are discovered. But, they expand at a much more consistent rate over the long run than paper money.

Finally, gold and silver are market-chosen money. The free market principles which I believe are the best economic policy should be practiced not only at the national level, but more importantly at the local level. Individuals and businesses should use free market money - money with value derived from its acceptability in the market rather than any edict or decree.

What is your full name and your position at Vertoro?

People call me Jim. When you go to the Wikipedia disambiguation page on “Jim Davidson” you find me where it says “James Eric Davidson” http://en.wikipedia.org/wiki/James_Eric_Davidson .VertoroI’m the chief executive officer at Vertoro http://www.vertoro.com/ .

So, what does Vertoro do?

Vertoro is a consulting services company. We offer extensive services in communications security, privacy, data security, encryption, hardware and software systems for secure communications, free market money, web development, e-commerce, and marketing. As a result of our specialties, we do a lot of contract programming of one sort or another.

Those specialties sound rather diverse. Is there a common thread?

Yes, sure. In fact, the common thread is information. Money is just a special type of information. The very earliest data we have about money suggests that ancient man kept records of wealth represented by flocks of sheep or herds of cattle by notching bones with tally marks. Nowadays, we keep track of wealth by flipping bits in computer systems, so that a bank account shows a certain balance.

More significantly, the value of information may be the value of your entire business enterprise. If someone steals your laptop and gains access to all the confidential records of your customers, you may be out of business tomorrow. If you don’t have a secure backup, you may not be able to do business.

If your records are compromised, you may have to reimburse a lot of customers who expected you to keep their data secure. The government may shut you down for having lax data security. And that’s already happened - lots of laptops have been stolen and over 150 million customer records have been compromised as a result.

So, we create value by deploying effective information systems which use the latest techniques for data security. We also create value by providing access to markets around the world and in many specialty niches which simply cannot be reached without good data security, use of digital money, and online gold.

What would you consider to be your specialty?

The one thing I’m any good at is writing. I have a certain facility at taking ideas from various different technical specialties, thinking about them, and then writing about them in a clear, simple way. Sometimes, people find they understand what I’ve written.

How long have you worked in financial consulting and when did you open your first digital gold account?

My business school studies were in marketing and entrepreneurship. I guess my first job in financial consulting was working as an intern for Space Services Incorporated, developing their business plans, writing software for their real estate division, and helping them find a market for their payload launching business in the university science community. That would have been in 1986.

My first digital gold account came in December 1998. I was involved in a Texas constitution reform project and the guy running it agreed to reimburse my expenses with e-gold. So, I opened the 1,468th e-gold account. Once I got started, though, it became exciting. In those days, you could redeem two tenths of an ounce of e-gold and they would mail you a gold coin. It was fantastic. Occasionally I hear someone recite how large an upward move has taken place in the price of gold over the past two years, and then they tell me it’s too late to buy. Fools and their money are soon parted, my friend.

How many other people are employed at Vertoro and is there anyone I might know?

All our staff, including me, are contractors. We work closely with a team of consultants and contractors who provide all kinds of specialties including accounting, marketing, programming, web development, publicity, media relations, and other services. We have a chief technology officer, Kevin Wilkerson. We also have a set of very good relationships with financiers, so we place deals with them and help companies raise money. Our political risk consultant is Sandy Sandfort. You may have read a few things he’s written. Over the years he’s been published in places like Wired magazine and the like. He has forgotten more things about the law and international company structures than I’ve ever learned.

One of the guys I work with quite closely is Courtney Smith. He used to run a leading hedge fund and a top-rated newsletter and a top-rated stock fund. So, he’s something of a finance whiz. He and I have worked about half a dozen deals in the last year, taking companies public, bringing in new capital, going overseas to offshore stock markets to tap other sources of financing.

Is Kevin Wilkerson an important part of the Vertoro organization?

I would say so. He’s the chief technology officer. We rely on him to evaluate technology, develop systems, identify programmers, put together the project teams that actually implement software and hardware systems, and handle some of the parts of the market which he knows best.

What kinds of digital gold currency do you sell at Vertoro?

Mostly, that is e-gold and Pecunix. We sell a tiny bit of eCache. As a practical matter, we sell what the market wants. Pretty much we sell all kinds. That is, all the kinds that are actually gold. So, if we cannot verify that there is gold, if the currency cannot be redeemed into actual gold, we don’t touch it.

Is Vertoro an exchange provider and can I sell gold to the company?

Vertoro? No. Vertoro is a gold dealer. That means that we sell gold coins, silver coins, and digital warehouse receipts for gold or silver. We do not ever buy from the public. An exchange provider is a sort of money changer and, therefore, as we’ve been advised, a type of money service business. These days, money service businesses are regulated in most markets. A gold dealer, on the other hand, just sells gold or silver to the public. Since a gold dealer does not buy from the public, that’s not a money service business, again, as we’ve been advised, under the current legal and regulatory regime.

What type of ventures has Vertoro been involved with over the past several years?

Most of our work has been in asset protection, communications security, and systems integration. We have been consulting on private placement and public financial market offerings for about two years.

Can I raise equity financing through Vertoro?

We are not a broker nor a dealer in securities. To raise equity financing, we would refer you to our network of contacts in those industries, which are extensive.

Or can you arrange that for a private company wanting to go public?

We have contacts in the business of taking companies public, not only in the USA, but also in Europe and Asia.

I know you are familiar with the current legal situation for e-gold Ltd and OmniPay. What can you tell us about what happened between e-gold and the government and why?

Well, I am familiar with the situation. I do not claim to be entirely current. I try to keep up, but all legal cases tend to involve their principal in lots of details and minutia. So, I’m probably not the best source of data on the case. I would suggest you talk direct to Doug Jackson or to the lawyers handling the case.

What happened?

I think the broad outline of the history is important. E-gold was founded in 1996. During its growth from 1996 to 2006, it was often contacted by law enforcement. To my knowledge, e-gold always responded very well, turned over records on subpoena, and followed court orders whenever they were presented. You can read about it in the 2002 article in Wired by Julian Dibbell who describes federal agents being served coffee and donuts in the e-gold conference room while perusing records. At least as early as 2003-2004, Doug Jackson of e-gold was vigorously pursuing the company’s obligations to oppose child pornography. I think e-gold was a founding member of one of the major anti-child-porn groups. Anyway, they began to hunt down the e-gold accounts which were in any way involved in child porn sites or in buying from those sites, and using their own internal financial forensics to identify and shut down those accounts.

Meanwhile, the credit card companies were not, in my opinion, doing anything on this issue. But, they wanted to blame someone for the problem, and they focused on e-gold as a good scapegoat to exploit. At the same time, one of e-gold’s competitors in the industry was also trying to focus law enforcement attention on some of the Ponzi scheme pseudo-investment sites. Quite a few of these high yield income programs (HYIP) or Ponzi schemes were accepting e-gold. Finally, things came to a head in December 2005. BusinessWeek ran a very nasty article fixating on only those few accounts where e-gold was apparently used by alleged credit card frauds and other criminals, asserting, as I read the article, that e-gold was itself part of a vast criminal enterprise. In my view, that was a smear piece which was extremely libelous.

Also in December 2005, the government came to e-gold’s offices and imaged the servers. So, the government had all the data. They also seized a bunch of paper records from e-gold and from OmniPay, the related exchange provider. Up to that point, various government agents had extolled the virtues of e-gold and OmniPay in their cooperation with law enforcement. And, up to that point in time, everyone in government at all levels had consistently said that e-gold was not money, and that OmniPay was not a money service business.

Then in December 2005, to get the warrants to image the servers, the government made a number of very spurious claims. Treasury Department agents went to a judge and asserted that e-gold was in a criminal conspiracy to launder money, that OmniPay was an unlicensed money service business, and so forth. Coincidentally, in early January 2006, the folks at OmniPay received a letter from the Treasury Department denying their second or third application for a money service license, because, it said, e-gold was not money and they were not a money service business.

So, the government’s position at that point was completely idiotic and inconsistent. It was entirely appropriate for the judge to throw the whole thing out in January 2006 and demand that the government admit that there was no wrongdoing. Of course, the government then got upset, because it is full of people who cannot admit to ever doing anything wrong.

Thereafter, 2006 was spent by e-gold and OmniPay trying to put their paper records back in order. I was over there in October 2006, and I can tell you that the government thugs took neat and tidy records away and returned a blizzard mess of paper. It is really disgusting how little regard for honor or decency those people have. They just don’t think private property is right, so when a private party gets his things back, assuming that the government agents don’t just stonewall on the return of what they seized, he gets it back in disarray.

But, the other shoe was yet to drop. In April 2007, the government acted again. The same agencies as far as I can tell, are now accusing Doug Jackson on criminal charges of conspiracy and money laundering, and they have shut down a bunch of e-gold accounts, including quite a few perfectly legitimate business operations. Moreover, they not only seized the gold in those accounts, the government demanded that all that gold be liquidated. E-gold is appealing the seizure order, but I gather the judge has been told all sorts of poisonous half truths and has been a bit unfriendly. At some point, the criminal charges are going to be settled in court. I think the charges are entirely fabricated, groundless, and despicable. I think the people involved in building up this case have done so out of petty and vindictive motives. And, in my experience, government agents lie, fabricate evidence, withhold exculpatory evidence, cheat, steal, beat suspects, rape and murder with impunity. So, I don’t expect much from their side of the case. It may be that justice would still prevail, but it won’t be easy. And, of course, once the criminal charges are settled, the government agencies are going to run the whole set of people through the mill again with civil charges. So, it may be quite a few years, judging by how others have been treated in the past.

What does the future hold for e-gold?

I really don’t know. I think that e-gold is a good idea. I think the men and women involved in e-gold are good, kind, decent, and honorable. I have spent considerable time getting to know them, and I think very highly of their intelligence, skills, and integrity. It may be that justice would prevail, but that assumes a legal system that is capable of emitting just decisions. I’m not sure that fairly characterizes things in the United States at this point. Of course, e-gold may be able to continue. If it does not, that’s a terrible loss to the industry. But, I think the idea of e-gold has so much merit that the idea would carry on - Pecunix, c-gold, and other offshore gold services would carry the flag.

If you could give Dr. Jackson and his fine team, some personal advice from your experiences, what would you tell them?

Well, if I had been hired in 1999 or 2000, I would have told them what I told e-Bullion’s team in 2003. Get your servers out of the USA. Take them to Switzerland or Malta or the Isle of Man or Singapore or anywhere you can get decent connectivity with fairly low latency, and where there is a legal system with integrity. Prosecutors and government agents in the USA routinely seize evidence without a warrant or subpoena, and the USAPATRIOT act and other shenanigans not only authorize, but encourage such behavior. As for personal advice, what Doug and his team are experiencing is very hard. It is extremely painful to have false charges brought against you. It is very, very sad to see something you’ve built being destroyed by evil people who have maliciously brought false and misleading charges. When Space Travel Services was destroyed in 1991, and when the government then admitted that what they had claimed about our business was false, I was very disillusioned. But, the world is a big place. It is really, really big. Traveling to Asia and Africa and getting to see the oceans for hours and hours while flying at 600 miles per hour, you get a sense of how big it is.

I know Doug has been to Africa and Asia, so I think he understands. The government of the USA acts like it is omnipotent, omniscient, and omnipresent. It is not. In particular, the government of the USA is not a god, it has no god-like powers, it is merely a graven image with pretended powers. The people who worship it are idolators, the people who service it are evil, or misguided, but they are only human. They make errors. They put on their clothes one limb at a time. To fear them is as mistaken as to worship them.

Governments don’t last. They are mayflies. A given set of edicts and idiocies might last four years or eight, but it won’t last forever. Governments come and go. The world goes on. So, don’t be disheartened. When you are ruined by governmental abuse of authority, when you are hurt by their shenanigans, remember that they always lose. Governments have been trying to enslave people for at least the last five thousand years. Judging by the records from Egypt, they have been cheating people out of more tax money than they are properly owed for all that time. Judging by the results, some of the most pious, decent, and honorable men and women - Jesus, Gandhi, Joan of Arc, Henry David Thoreau, Emma Goldman, Susan B. Anthony, the Dalai Lama to name but a very few - have been imprisoned, betrayed, traumatized, beaten, and in some cases murdered by government, but their cause has always won.

Jesus and Joan of Arc are remembered not for being heretics and criminals, as their accusers claimed, but for being pious, decent, intelligent, and visionary. Gandhi and the Dalai Lama are known for having stood against immense brutality and survived. Good people like Thoreau, Goldman, and Anthony, to name only three, are always treated shabbily by those who demand obedience, who claim to rule.

I think the same is true for Doug Jackson and his team. They have decency, integrity, and truth on their side. So, of course, they are going to get some kicking around. Whether they are convicted or sentenced to prison or turned over for extreme rendition as enemy combatants, or whether they are exonerated, life goes on. Bringing free market ideas to money is a tough business. It confronts the very things that governments serve - the banking cartel and the military industrial complex. Putting money on a solid basis - free from exchange risk and offering finality of settlement - is a good thing.

So, don’t let the scum grind you down. Be of good cheer. That would be my advice. The minds that conceived of e-gold in 1996 and implemented it, made it the most successful digital currency ever, and built a gold reserve to rival many nations, are great minds. No prison for the body ever did more than fleetingly limit a mind. Indeed, some of the best literature of freedom has been written inside prisons. My advice comes down to this: live on, dream on, and find a way to achieve your goals.

Do you think that this move by the DOJ against e-gold is the beginning of an outright ban on digital gold currency being used across the United States?

Yes, I think it is a step in that direction. It is always government policy to erect barriers to capital flight when the currency is tanking. It is always government policy to use capital controls and wage controls and price controls to “fight inflation.” And, these policies always fail.

Something perhaps similar to what has just happened to online gambling and US banks?

Yes, the events are related. The policy has three main sources. First, the policy is intended to shore up the currency by limiting capital flight. Second, the policy is intended to protect domestic gambling and banking interests which benefit from the enforcement of the policy. Third, the policy is intended to take more in seizures and in taxes. You can see where that works for gambling. The online gambling business competes with the land based casinos and race tracks. Well, those edifices have a tight relationship with the tax authorities. Go win a jackpot in Las Vegas and you find yourself confronted with a form telling you how much is being withheld by the IRS. The governments of the USA now make payments to 52% of the population. The war is very costly, and war is always inflationary. The war has hampered trade, and protectionist trade policy in gambling has brought sanctions from the World Trade Organization - and trade wars are also inflationary. Finally, online gold competes with the banking cartel. Nobody in government ignores the interests of the banking cartel with impunity.

Recently I wrote a story about how Pecunix is now using a warning screen to ward off ponzi scams and investments Do you think this approach will be successful?

Yes, although it isn’t the warning screen that makes it succeed. Pecunix works very hard to police its users so that it is used within the terms of service. That sort of self-regulation is essential during these times of authoritarianism.

Do you think it’s overboard?

Not at all. It is suited to the business environment. Businesses that don’t pay attention to the policies and practices of government get ruined.

Should we all just mind our own business?

Yes, of course. And, the shareholders of Pecunix and of Pecunix Venture Holdings are very happy that the management of Pecunix is minding their business.

Or do you feel this does not go far enough to fight scams? How far do you go?

I think it is important to fight against crime. If I see someone stealing from another, I think I have an obligation to do what I can to stop that crime. In my view, that extends to using up to deadly force as I see fit. I believe that obligation is one that I have to myself, primarily, to create a world where less crime takes place. Pecunix management does an excellent job of making sure that the currency is not used for fraud or theft or crime.

What can we all do to strengthen the digital currency industry and create more positive growth?

I think the main thing to do is bring the ideas of free market money to the business owners who would benefit from them. That’s why we created Vertoro.

You and I both understand that we can’t walk down to the local grocery store, whether it’s Food Lion, Kroger or Piggly Wiggly and spend or barter for a basket full of groceries using real gold or silver currency or bullion.

Well, Mark, I beg to differ. I have bought groceries at stores such as Kroger in Houston, Texas, with silver from the Liberty Dollar organization. I have spent silver in a lot of places, just that way. It’s not US legal tender. No, it is not, but that’s okay. Neither are Federal Reserve Notes. You see, legal tender means that it is unlawful to refuse. And there is no punishment for refusing to accept paper notes from the Federal Reserve. None. I have a stack of newspaper articles about stores which refused paper and would only take credit card money. Disney runs theme parks where you have to use Disney Dollars, not Federal Reserve Notes. Lots of places offer store money or gift cards. So, legal tender isn’t the problem here. It was in Revolutionary France, of course. You could face the guillotine, as hundreds of merchants did, for refusing the assignat or the mandat paper money. You could be executed for simply posting a set of prices in assignats and a different set of prices in gold and silver specie. Those were actual legal tender laws.

Legal tender for the courts means that if someone tenders paper money for a payment denominated in dollars, that qualifies as payment. But, if the contract is denominated in grams of gold, that is not clear, and I believe gold denominated contracts are now binding.

So, what can the regular guy do to help create a more stable financial economy?

First, “sauf qui peut.” Save yourselves. If you have a savings account, and no other wealth, then take that savings account and buy some gold and some silver, and do it right now. Second, diversify. Again, for the sake of your own financial survival. Put some of your money into GoldMoney - a good currency with both gold and silver. That metal is stored in London, and their servers are on the Channel Isle of Jersey. Put some of your money into Pecunix, which has metal in Switzerland and servers in New Zealand, I think. Put some of your money into digital gold stocks or bonds. Put some of your money in c-gold which is based in Malaysia. Look at e-Bullion which has servers in Switzerland and gold on several continents, as well as silver. Keep some gold coins and silver coins at home. Look at good quality gold mining stocks.

I think Casey Research has the best leads on these. Third, get involved. The American Liberty Dollar has over a hundred thousand users nation wide. You would do well to be a part of that network. Get involved with free market money on the web. Join the discussion lists and the Crowdvine. Make it a part of your MySpace Page and FaceBook presence. Fourth, give gifts of gold and silver coins. Your friends and family would do well to have some, and they are very popular gifts.

What do you tell people locally, when they ask, “what can I do?”

I tell people that they can do anything. Remember, in 1990 some friends of mine and I bought a contract to put an American on the then-Soviet space station Mir. A buddy of mine, Walt Anderson, later purchased that space station. Now, sure NASA got the government of Russia to destroy it before he could do very much with his property. But, you see where the sky is no limit. Some of my friends in the Planetary Society built hardware that went to Mars. Can you imagine?

What should you do? You should choose for yourself. I think you should choose a free market money. I do not think you would be well served by fiat money. But, a lot of people think I’m mistaken. In the end, all I can offer is my best thinking. The choices you take determine your future. So get the best ideas you can, think about your choices, and act. Once you see how those actions went, you can act again with more confidence.

When building a larger and stronger online digital gold economy, which comes first the merchants or the users?

The merchants come first. But, the users are easy to bring. The reason e-gold became the leading digital gold currency is very simple: they had a referral program. Their referral program split the revenues from the payment receive fee between the person referring the spender and the person referring the recipient. It worked. And the leading merchants were the ones who did the most to promote e-gold.

As long as I have been online and touting the benefits of digital gold currency, not too many people have put away their plastic and replaced it with e-gold or Pecunix.

I wouldn’t expect all forms of plastic to go away. Fiat money is actually in circulation rather than gold and silver because of Gresham’s law. So, it is well to have systems that inter-operate between gold and fiat. One of the projects I’ve been asked to consult on is a digital gold card where the balance is held in gold but the payments are in local currencies. Even with all the CC fraud, high rip off interest rates people still use their plastic when shopping online. About 90% of all US online transactions are paid with plastic.

What’s it going to take to get people to change?

The same thing it always takes, Mark. It is going to take a collapse of the world’s reserve currency. Fiat money inflation in France lasted seven years or so. The fiat money in Weimar Germany lasted four years. The experience in Yugoslavia was something like five quadrillion percent inflation in one and a half years. The Republic of China had hyperinflation for sixteen years while they fought the Japanese and then Mao. The United States dollar untied from gold in 1971, or 36 years ago. There have been amazing things in those three dozen years, that have kept the currency alive.

But the end result is always, always, always the same. People won’t change while they think they are prosperous. One of the side effects of monetary inflation is the illusion of prosperity. But, people always go back to gold and silver when it matters, when the currency collapses.

But won’t people just switch to some other currency?

They might, but it won’t do a bit of good. There is no paper currency that works.

What is the largest ‘thing’ you would like to see changed about the United States fiscal policy?

Myself, I would like to see the USA adopt a policy of voluntary donations rather than coercive, confiscatory taxes.

How about the Canadian dollar?

They sold all their metal reserves in 2005, as I recall. So, the Canada dollar is backed by their reserves of USA dollars.

And the EU euro?

My friend Doug Casey likes to point out that if the USA dollar is “an I owe you nothing,” then the euro is a “who owes you nothing?” At least with the “full faith and credit of the United States” you can pin someone down. With the EU euro, which of the member states is responsible for your money? Any and none.

I’ve heard people say, “I’d start using digital gold currency if there were more places to spend it.”

I really haven’t. I’ve wanted to hear that, but I don’t. Mind you, it is easy to adopt. Merchants can use the gold-cart.com software to accept any number of digital gold currencies.

Then 2 minutes later I hear from a merchant “I’d accept digital gold if more people used it.”

Right. But, that’s the Catch-22. The merchants have to accept currencies if they expect anyone to buy from them, or use those currencies. It is up to the merchants to choose free market methods or not. And the same crisis that is going to impel everyone to move into gold and silver from fiat money is going to work its magic on merchants much sooner. Hyperinflation is always hardest on the least prepared merchants. Harder than it is on anyone else.

If you look at the chart of gold price moves, it really has jumped recently. Do you see higher prices in the years to come and if so, why?

Yes. I believe we’ll see $1000 gold in early 2008, and $10,000 gold or higher before the dollar collapses. At the same time, the Dow should hit 30,000 or so, as all those foreign held dollars seek some sort of return on investment.

First, let’s just look at the historical prices. In January 1980, the price of gold hit $895 per ounce during intra-day trading in the April 1980 futures contract. In today’s dollars, that would be over $2700 per ounce. So, as long as gold is below $2700, it is not even matching the historical high.

Second, let’s look at the dollar. What is holding it up? Some confidence in the American government? Some set of policies that may be believed? Some history of fiscal or monetary restraint? No. None of these. All the trade policies are protectionist and inflationary. All the foreign policies are aggressive and inflationary. All the fiscal policies are deficit-laden and profligate, so, inflationary.

The only thing that is going to bring nominal prices for gold down is the huge investment in gold mining that has been going on since 2002. Yes, that is going to realize some serious discoveries, and those discoveries already found are going into production next year and through 2011. But, the dollar is going to collapse before that new production is in hand, so the prices won’t be dollar denominated. Plus, of course, there is a little known rebellion cycle in American history which peaks right about now. The actual peak should be in the five years around 2010. So, the period from now to June 2012 or so. And rebellion is very, very inflationary.

I know you have had an interest in the Liberty Dollar and the Phoenix Dollar, both are private barter style silver bullion products. I’m also a big fan of 100% silver backed currency.

Yes. My first silver coin was a 90% silver dime my great Aunt Dori gave me in 1967. The coin was minted in the year I was born, before Lyndon Johnson said that silver was “too expensive to use as money.” It was, of course, the debasement of the silver coinage that told the French to begin converting their dollars to gold. That was what started the London Gold Pool of 1965-1971.

Do you consider yourself a force for change?

Me? I’m just this guy, y’know? I’m aware of change, and I do what I can to stay even with some of it. But a force for change would be nanotechnology. You want to see how fast that is changing things, talk to Darrell Brookstein.

Or a factor in how the world of tomorrow is being shaped today?

Well, sure. We all are factors in that shaping. Look, the economy is just choice taking behavior. All it is, all it has ever been, is buyers and sellers taking choices. I happen to be an innovator in this industry, in the digital gold industry. Or a very early adopter. I’m someone people talk to about this stuff because I’ve gone to a lot of trouble to meet the people involved in the industry - Doug Jackson, Bernard von NotHaus, Jim Turk, Anthem Blanchard, Sidd Davis, Paul Vahur, and others.

But, your question suggests some quality I have that might be regarded as unique. I would demur. What I have is a certain facility for knowledge and a considerable ability to communicate, which are easily replicated. It is possible that I lend insights and witticisms to speed things along, or make them more enjoyable, but I’m just this one guy.

What are you currently doing to help move that change along?

Very little. I think the only meaningful thing to do in that regard is to combine encryption technology with digital bearer instruments and some sort of gold and silver redemption system to offer completely private exchange of value. But, I don’t have the math to contribute to crypto. I don’t have much background with digital bearer instruments. And the auditing of the gold and silver is a puzzle that I think George Hara might have worked out, but I’m still puzzled by.

I read from the Vertoro ‘About Page’ that your goal or mission is, “…to help individuals and businesses educate and protect themselves from the collapse of the dollar.”

If we do nothing else, that should prove to be very valuable to a great many people, yes.

Where do you see the US dollar falling to over the next two or three years?

I believe that within the next three years, the USA dollar could cease to circulate. Just as the mandat replaced the assignat in Revolutionary France, I expect the North American Union to include a monetary union, and something hyperinflationary like the amero to be the new currency.

There is no historical parallel outside of the collapse of the denarius when Rome fell or the failure of the solidus when Constantinople was sacked by the Turks or the failure of the dinar when Baghdad and Damascus were sacked by the Mongols. Perhaps something like what happened when the mulberry bark paper of the Khans of Imperial China went hyperinflationary in 1300 or so. Basically, everyone with any dollars is going to be desperate to unload them on anyone selling anything of value. In other words, I don’t see a bottom.

What does financial freedom mean to you?

Financial freedom means being able to control the destiny of my wealth.

Do you invest your own money in gold or silver bullion?

Well, I’m basically a pauper. There are some assets that I have been asked to manage. Whatever ready money I have access to is stored in gold or silver, except for extremely current cash to pay actual bills now due.

Why?

Simply put, I don’t trust the governments that put their full faith and credit behind paper money. I believe the history of governments is such that only a fool would ever trust them.

If I gave you one full page ad, in the New York Times, Wall Street Journal and the Washington Post….for one full weekend (Fri, Sat, Sun editions), what would you say to those millions of readers?

If there were only one idea to convey, it would be the tremendous difficulty faced by people who have poor crypto. Look at Japan and Germany in World War Two. They had the very best mechanical cryptography systems, and they were utterly defeated by the USA and Britain, which had the very best digital crypto. Now, it happens that I’m working with a company in Houston, LightSpeed Systems, which offers encrypted root desktops and

Rayservers brand encrypted root laptops. I think that secure data systems are very, very important. If you visit GoLightSpeed.com you would get a glimpse of what we are doing. So, in terms of consumer products, that’s where I am. I really think selling gold and silver coins to the masses is going to be very easy in the next few years.

I am not a fan of credit cards. I recognize that last year was the first time since the great depression that the US population had a negative rate of savings, people actually had to dip into their savings just to get by, yet credit card debt continues to rise per US household. Open your wallet or briefcase and tell us, do you have a wallet full of plastic credit cards? Why?

I’ve been reducing. I managed to get one card company from a credit union to let me pay off the balances on two others. I plan to reduce further. But, yes, I have debit and credit cards. They are very handy for day to day transactions.

Can you give us three good reasons to be holding gold today and not US national currency?

1. The USA dollar is at parity with the Canada dollar, which is only part of the dollar index story. It is not going to get prettier from here. The USA is the world’s leading debtor nation. With oil no longer trading exclusively in dollars, a whole lot of dollars are going to want a better home.

2. Gold is better money. As Aristotle pointed out, it is consistent, unlike land. Gold is divisible, unlike works of art. Gold is convenient, unlike bars of lead. It is durable unlike bushels of wheat. It also happens to be ductile, malleable, conductive, and pretty. Taken together, these features have always made gold attractive. So, it is universally acceptable in exchange for whatever people are using for money locally in time and space. There is no better store of wealth.

3. The best calculations I’ve seen for the M3 money supply since the St. Louis Fed stopped publishing that figure in February 2006 or so suggest that the money supply is expanding by about 12% to 14% lately. Gold’s supply has expanded by about 2% per year for the last thousand years or so. And, the supply of gold is naturally scarce. The supply of money is up to the whims and psychoses of a few very dim-witted politicians.

I know over the past year or more the US dollar has been sliding down against all major currencies. Do you see this downward trend continuing?

Yes, I do. My friend Clyde Harrison said it best. Fiat currencies don’t float, he said, in August 2005. They sink at different rates.

By the end of 2007, the price of gold will have topped what number?

I’m going to say the ounce of gold at $950 and the gram of gold at $30.54.

Do you have a PayPal account? Why or why not?

Me, personally? Yes, I think so. I’ve had two or three over the years, and I have recently confirmed one for a very obscure e-mail address that I’ve been keeping. But, I don’t have any money in it. I don’t recommend PayPal for our digital gold clients. There have been a lot of problems with merchants who have PayPal accounts having their accounts frozen and funds seized or, at least, withheld for many months. There are accounts from company insiders which suggest that the pattern of frozen merchant accounts was part of a deliberate policy. While I’m not able to say for certain what to think of those stories, I think it best to avoid trouble whenever possible.

What is on the horizon for Jim Davidson and how can I learn more about it?

The next big thing is GoLightSpeed.com which is going public this Autumn. If we get it all done up in a package, we are told we can get $5 million for twenty percent of the company in a Reg A IPO. That means the whole thing is worth $25 million. A significant share is held for the various holders of stock in EZEZ, Reliable Laptop Distributors, and so forth. Within two years, I think we’ll raise a total of about $300 million to take that puppy global. At the same time, I have ambition to get out of the industry completely. I’ve put together a group to go after the Google Prize. We’re also talking very seriously about putting people on the Moon and Mars.

When you think about it, we’ve always lived in the Solar System. If you put a box around Earth, there would be no life inside after a few weeks. All life here depends on the Sun for light and on other space resources that come down as meteorites. In fact, most of the gold and platinum group metals are here as a result of asteroid impacts, according to the best current science. Well, most of the universe is not down here. It is out there. As a practical matter, that means that most of the wealth is out there, too. It is raining soup out there, and I’m going for a bucket.

How many gold or silver bullion coins do you have in your pocket right now?

Ain’t tellin’!

Why?

Well, for one thing, I’m sitting here in my pajamas.

Jim, I’d like to thank you for taking the time to answer my questions and I like to wish you the best of success with your future business.