Sunday, May 15, 2011


The two old Wakians were rewarded by seeing an all-out blush on the new boy’s face. Darren Feeney, Albert’s distant cousin, was used to being thought of as the distant seed of the local bootlegger; it didn’t bother him. He even played into it with a little under-the-table electrical and computer-installation work for cash, which added to him fitting in. It reassured the locals who liked to think of family behaviour as part of family tradition.

Paul Mullin, the scion of the “bad” Mullens, did his own part to fit in too. Since he ran a marina, a business that was easily targeted by the tax authorities, he didn’t go much for under-the-table transactions. But, his status as a business owner didn’t prevent him from collecting unemployment on the off-season along with his staff. The way he saw it, unemployment was like forced savings. The only way he could cash in on what he himself contributed was if he were unemployed. The marina being a seasonal business, it was the perfect vehicle for extracting prior contributions once the vacationers called it a year. Paul felt no guilt in doing so. If he came a little ahead as a result, it was just because he was smart.

Because both old-timers lived according to the old country code of seeking advantage from a too-citified government, they were pleased to see the new boy cultivating his own angle. Albert had joined up with several other well-off goldbugs to put together the bare bones of a gold hawala network. He and his friends would privately keep tallies on gold exchanged for goods; the aim was to build up an alternate monetary system to cushion the economy from the worst effects of hyperinflation. It was set up by believers in gold, so the alternative of using hard fiat currency wasn’t seriously entertained. Other could see to using Euros, yen and renminbi; Albert and his cohorts were sure that several payment networks had. The advantage of gold was that it was easier to hide. Had the national government decided to crack down on foreign-currency transactions, it could do so fairly easily. Like dollars, those other currencies were mostly in the form of computer blips. Thanks to the new world of international co-operation, the governments overseeing those currencies would be eager to aid and abet any such crackdown. Yes, even the communist Chinese; they needed good trade relations, and it was no skin off their backs. They had no duty to help out foreigners who were trying to protect themselves against the ravages of inflation caused by a non-Chinese government. Such non-citizens were of no account.

The same iron logic applied to physical bills. Had the feds been authorized to confiscate those bills and burn them as if they were confiscated marijuana, the respective governments would not intervene at all. The advantage of using Euros, yen or renminbi, which were also inflating but at a lesser rate, was outweighed by the disadvantage of they being tied to an overly policed financial system.

Physical gold, on the other hand, was independent of the very well-monitored banking system. There was no national gold registry. Unlike with digital and vault-stored gold, there were no records to impound. Gold in the shadows was very hard to confiscate. Given the amount of robberies lately, it could easily be ‘lost’ and thus enter the shadowy black market.

Not everyone can be a hawaladar, a node in the hawala money-transfer network. Imported from India, the system worked as follows: a hawaladar had a large stash of money. If a client wanted to transfer money to someone else, the hawaladar took a small cut and then checked his or her private records. If the client had a credit balance, then the agent adjusted it accordingly. If physical money was brought in, the hawaladar stored it along with the rest of the funds in his or her keeping.

If the recipient lived in the area, the hawaladar would ask if a credit balance would suffice for payment. If so, then the records were adjusted. If not, then the money was delivered and the account settled. Transaction closed, and fee earned.

Things got interesting when the money needed to be transferred out of the agent’s own turf. Then, a hawaladar would contact a colleague that looked after the territory where the funds were going. The same clearing-house process was employed: if it sufficed, records were adjusted and that other agent would release the funds from his or her own pile. Out of convenience, the nodes of the hawala system kept credit balances with each other; they didn’t draw upon the funds until their own stash got short. Not until then was a risky physical courier delivery resorted to.

By description, it sounds a lot like Western Union – but there were these crucial differences: Western Union was centralized; the hawala network was radically decentralized. Western Union went out of their way to solicit your business; hawaladars didn’t. Western Union could be shut down with a single edict and raid; a raid of even the biggest hawaladar would only shut down that one node. Once the network was large and thriving, the transactions could simply be rerouted like data packets over the Internet. The final difference, of course, is Western Union was cheaper. With respect to Albert and his crew, there was an additional difference: Western Union did not handle gold, although several digital-gold companies did.

How a single hawaladar handled his or her books was completely up to him or her, as long as probity was iron-clad. Records could be kept in a manner as primitive as pen and paper, perhaps in code to deter snoops. Or, it could be as sophisticated as a triple-encrypted spreadsheet - specially encrypted file on a hard drive also encrypted, with a cloud backup file also hidden and encrypted – with no password needed because the hawaladar’s eyeball served as the password. The latter system matched Albert’s set-up. He had no passwords to remember, so he had no need to write down strings of digits and letters or exert his memory. The iris-recognition system did use passwords, as it was layered over the standard system, but those were generated using a true-random number generator that was certified by the casinos as matching the real thing. Once the password was generated, the recognition software calibrated it to the data received by the eye-camera. A different iris would be translated into a different and therefore wrong password. Since human memory was no longer a factor, the passwords in question could be huge. One glance into the eye scanner on Albert’s system translated into a 128-character password. As a backup, the wrong iris immediately changed the password into a new random 128 characters. The eye-scanner went into lockdown until Albert's right iris relinked the scanner data to the password. The communication between the device and the desktop was encrypted at the Pentagon level.

It took a special person to be a hawaladar. Money was necessary but far from sufficient. A true and hard-won reputation for iron probity, underlying a word that’s golden, was also necessary. Not much spoken of, but also crucial, was being loved. Hawaladars always lived with the spectre of theft; the best defence was being nestled in a community who would all but lynch a robber who dared prey upon the well-nested agent. Being loved wasn’t a substitute for safes and safeguards, but it was more effective than physical means alone. Burglars know who not to touch; they know who’s looked out for. That’s why so few small-town widows with comfortable competences, and husbands who had been pillars of the local church, got burgled or even defrauded.

Albert Finney, being new to the world of hawala, was luckier than he knew. The ribbing he had just endured was a disguised invite into the well-knit fabric of Lake Wakia. Had he been a mere city boy, without an ancestral connection and a Wakian relative living just across the road, his node would have never gotten off the ground. Fame and widespread repute through the business media was not enough. Had he not had dormant but deep roots in Wakia, his hawaladaring would have been dead on arrival.

Moreover, he would have been seen by the salt of Wakia’s earth as just another “tourist” who put on airs when it suited him. No-one who knew the land would look out for him, and burglars would notice. Albert being known as the Finney, the great-great grandson of the local moonshiner back when the area was new and well-hid, gave the locals a dig at him but it also granted him a place. He had an opportunity to roll with the hazing and thus draw on it; by accepting the local customs himself, he had an opportunity to be one of the looked-out-for. He would need it.

He didn’t think of it in the above terms, but he had enough sense to cotton on to the process. Through his blush, he realized that he had to “Finney it up” to be accepted.

So, after recovering his tongue, he replied: “Well, the goldlegging still is going to be well buried.”

Both Darren Finney and Paul Mullen looked at each other, nodding. Albert, citified though he was, would do.

Neil and Dylan Feeney, now mutually-recognized distant cousins, began to spend some time together. Neil, having been yanked out of the exclusive Yancey Grove prep school, didn’t sign up for the local schooling; instead, he homeschooled. Dylan spread the word that Neil had found a way to goof off. That wasn’t true, but the new boy went along with the joke although stiffly.

He also went along with something else. Dylan, having grown up with electricity and computers, had showed a precociousness that was expressed in the time-honoured manner in which boys express their creativity in the useful arts. When twelve, he had built himself a clubhouse about a hundred yards away from the two-story family home. Bigger than a treehouse, it was the size of an overly large shed and thus had to be put down on the surface. The boy had to have help from his dad Darren when building the thing, directly modelled on a large shed, but he wired it himself. Pleased, his dad added a special circuit to the circuit-breaker board and marked it with the label “Boys’ Club.” The 15-amp line from the breaker went out the basement wall a foot below ground. It had been Dylan’s task to dig a trench for the wire from the house to the clubhouse, which he had undertaken with visible reluctance.

The 14-gauge wire had been shielded with a half-inch PVC pipe to prevent damage from any later digging. When it reached the clubhouse, it went to three sets of double-plugs in the small building before it reached the lights and the light switch. One set was, of course, for the computer. Being old-fashioned, Dylan’s main unit was a desktop. Computer, printer, monitor and other gadgets required a power bar that plugged into the first outlet. The second and third were for whatever additional junk he wanted to plug in. Dylan had thoughts of plugging in a permanent electric heater for those cold spring and fall nights, but his dad smilingly explained that it would overload the circuit unless it were a small one. And then, he told his son to add insulation to the roof and walls. “You asked for it,” he explained. His boy had been miffed but had gotten over it. In so doing, the youngster had learned in a rudimentary way how to wire a building properly. Something as simple as running the wires parallel to the floor, which was not that simple to a growing boy, made sense to him when he had to cut the fibreglass to fit around the wires.

Initially, it had been something like a secret fort. As boyhood turned into teenagerhood, it became something else. The computer desk was vertical; the desk chair, small, simple and easily moved. Both were tucked in the near corner of the clubhouse on the right side of the door when entering. The large monitor thus served the entire room as a TV and movie centre; speakers were beside the monitor, except for a woofer that was tucked on the floor. Said room was made up of a couch, on the left wall, and three stuffed chairs. One was behind the couch, one was backed up against the far wall, and the third was on the right wall. All of them came from the town dump; all were serviceable.

Near the computer desk was a foot locker secured with an old-fashioned combination lock, of the kind that that generations of schoolboys had secured their lockers with. Wanting to introduce his fellow teenager to one of the manly arts, Dylan headed straight for it after he had gotten back from Friday schooling, had accosted Neil, and had a polite and pleasant conversation with his distant aunt Susan. Amused to find the other boy still studying, Dylan verbally dragged him to the truck and booted out the driveway. While driving, he remarked to Neil that the only part of the drive that wasn’t on private property was the road between their places. Although the two driveways weren’t facing each other, there was only a hundred yards between them. Only one hundred yards of public-property road in the entire journey, which clocked in at almost a third of a mile.

Party time was after dinner, by convention, but Neil needed the orientation course.

Albert’s mission proved to be a frustrating one. His name and press got him quick invites from the cottagers, but they sized up his alternate-money idea as something worthy of an overwrought strung-out retiree. Word spread on social networks that poor old Albert Finney had gone native. Instead of playing the gold and commodities game like a professional, he had snapped and become a disreputable goldbug. One fantasizing about hyperinflation and the wreckage of the economy.

The closest thing to luck he had, ironically enough, was with one of the "good" Mullens. Caleb Mullen was Wakia’s tax collector, a neat nearly-bald man of medium height with a clipped moustache; he wore his ancestry lightly. Sizing up Albert as a mere gold buff, he said that the township would be pleased to accept Albert’s property taxes in gold. “Two years in advance would be nice,” he added with a genial smile, but Albert didn’t get the in-joke.

But the newcomer did get what the tax collector was driving at. Gold being more sensitive to real inflation than ostensible inflation, it held its value. The national legislature was well on its way to passing a bill that would ration credit, so as to stop the money supply from rocketing up as it had. Seeing the writing on the legislative wall, Caleb had privately lobbied the Mayor and town council to rush through a new bond issue that, when added to the current ones, would all-but break the back of the tax base. Before inflation caught up, that is.

Thanks to the official inflation rate being only 14%, the bonds could be floated with a 15% coupon. Wakia was a good credit, if a little stretched, and the bonds could be easily sold to those people who still trusted municipal bonds and the national government. Caleb already had the idea of putting the proceeds into gold, selling off only what was necessary to meet city expenses, but his meeting with Albert crystallized the decision. Albert was a Finney, and knew the angles. He clearly approved of Caleb’s idea.

A sticking point was reached when Albert suggested that Wakia take physical possession of the gold and store it locally. At first, Caleb thought the man was nuts. Why would the town take that risk, especially when storing it with an allocated dealer with an ultra-secure double vault was the obvious choice?

“Because there’s a risk that the federal government will confiscate it,” Albert answered. Soberly.

Caleb looked at Albert to see any trade of wild-eyedness but found none. Pausing to clean his glasses, he remembered hearing about his guest cementing a secure safe right in the bedrock underneath his home. This man clearly meant what he said.

Wakia’s theft rate was low, even in these inflationary times, and the thefts tended to be of the ‘borrowing’ sort. Still, the town having gold in a basement safe would upset the applecart. The bond issue, once it went though, would be enough to secure 5,000 oz. of gold at present prices. Fifty one-hundred ounce bars provided the right balance between compactness and vendiblility. Should the national government be pushed to confiscate, things would have gone to hell in the proverbial handbasket. Having a secret reserve might not be a bad idea. Since citified government officials still looked down on the small towners, Caleb and his colleagues could easily plead “bumpkin” after they took their time to hand the gold in.

A move that momentous, though, had to be discussed with the Mayor and the council. So Albert got sent off with a polite “we’ll let you know.” As he went off, disappointed yet again, he didn’t know that his fellow hawaladar had arranged a gold deal that would involve him directly.

Having got to the clubhouse and its foot locker, Dylan opened it up with a mischievous look in his eye. Neil waited beside him, uncomprehendingly.

Inside the locker were two four-litre bottles of liquid. One was near full, the other was half-empty. Both had semi-inflated balloons where the caps would be.

“This is mead,” Dylan explained. “You make it with honey and other stuff that’s store-bought.”

Not cluing in, Neil waited. The slightly older boy now assumed what he considered to be a pedagogical air; his voice became a little gruff.

“To make it, you need to buy a jug of spring water, although distilled works okay. Get an orange, and say you want to eat it. Peel the orange and put it in the bottle after draining about half. Put the water in juice jugs so you can pour back some if you need to. Make sure to tear the membrane of the orange slices before you put them in.” Neil, not quite understanding, nodded.

“You need raisins – about thirty of them. Snack raisins: you get?” Seeing a nod, Dylan also noted the owlish eyes. Not a worry: he had an Internet link if the kid needed it.

“Next, is yeast. Just one packet. You can buy three and use the other two for homemade bread. If your mom presses, you can say you lost the third.”

Now brandishing the half-filled bottle as if it were a teaching aid, Dylan faced Neil. “The sticky part’s the honey. You have to use raw, which means you have to order it online. There’s no apiary around here. You can order five pounds and put a quart of it in the bottle, and save the rest for your sweet tooth. If there are questions about why you want the water, buy two tins of juice concentrate. You’re developing a taste for the finer things in life.”

Having mixed his how-to-make lesson with how to avoid attracting suspicion, Dylan continued. “Once the ingredients are in, you shake it for five minutes to get the oxygen in the water. That’s for the yeast.

“The raisins and orange are for the yeast too. You have to put a balloon on the top, pricked twice with a needle, to let the carbon dioxide escape. You don’t want the bottle to explode.” He paused and looked Neil in the eye to make sure the point sunk in before continuing.

“After a month or so, you rack it. Use a strainer and your juice jugs to filter out the raisins, oranges and dregs from the mead. Pour the mixture once through the strainer and that’ll get your raisins and orange out. Pour it through the strainer again, this time with a dish cloth to get the dregs. You’ll have to rinse the cloth when the stuff backs up.”

Satisfied that Neil was following along, Dylan added: “You have to use the sink, so you wait until everyone’s gone before you rack. It takes about an hour and a half if you sanitize the juice jugs and mead jug with bleach. You have to use the bleach,” he emphasized, “otherwise you risk contamination. Put in about a tablespoon with warm water, and don’t forget to rinse three times after swishing the bleach around. You’ll want to wash them with dish soap beforehand to get the crap off. Don’t skip this step.

“Once the racking’s done, the mead is back in the bottle. Let it age six months, or less if you don’t mind a little roughness, and you’ve got your drinks.”

Now comprehending, Neil’s eyes lit up. His eyes shot to the half-filled bottle which his distant cousin was brandishing.

Albert got the news on his smart phone from his fellow hawaladar in Freham, Harold Renfrew. Renfrew was a man of inherited wealth who got into the gold network on a lark. He transmitted, as agent over the smart phone’s well-encrypted network, the message that an unknown client wanted to buy Albert's old home in Freham for one thousand ounces of gold. Physical gold.

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