Minting Gold Coins: The Monies of ISIS

Recent gyrations in global markets have demonstrated to some observers the idea of gold as a safe haven doesn't hold. As investors the world over were gripped in fear, the price of the gold went...precisely nowhere fast. So much for seeking the safety of gold:

Gold is still well above the more than five-year closing low of $1,084
struck August 5 but the safe haven buying amid the panic on markets did
not materialize to the extent many bulls had hoped. Georgette Boele of ABN Amro in a Thursday research note argues that gold did not enjoy a stronger rally because the weaker Chinese economic outlook "outweighed safe have demand."

To be fair to gold bugs, the current lack of inflationary pressures in the world economy also works against gold's role as a hedge against inflation. That said, you may be curious to find out that there are also rather more sinister forces out there who believe that precious metals provide a bulwark against the machinations of central bankers and other nefarious characters. For today's latest gold-loving conspiracy theorists, try ISIS:

Forget the printing press. In readying for the rollout of Islamic
State’s new money, goldsmiths and silver smelters have been toiling
away. The jihadist group on Saturday touted “the return of the
gold dinar” in an hour-long video issued by its media wing, al Hayat.
Islamic State’s policy-making Shura Council last year tasked its Beit al
Mal, or treasury, with minting the coins, which come in several
denominations made of gold, silver and copper.

Death to America! Or is that the Federal Reserve to be precise?

The currency is meant to break the shackles of “the capitalist
financial system of enslavement, underpinned by a piece of paper called
the Federal Reserve dollar note,” the group said in the video. It didn’t
explain where the coins were being minted, nor how they’ll be
distributed or replace currencies circulating in the territory the group occupies in parts of Iraq and Syria.

Islamic
State first announced its intention to issue its own money in November,
five months after it seized the northern Iraqi city of Mosul and its
leader Abu Bakr al-Baghdadi announced a caliphate. The move was seen by
analysts as part of the group’s efforts to build the institutions of a
functioning state.

The jihadists have amassed a war chest of
millions of dollars, partly through collecting taxes, and by seizing oil
refineries. Bank and jewelry store robberies, extortion, smuggling and
kidnapping for ransom are other important sources of revenue for the
group, which metes out brutal punishment to anyone who opposes its rule,
including beheadings and crucifixions.

So, for weirdo collectors of currency, how do you obtain ISIS gold coins? That's a little trickier. After all, ISIS is classed not as a "state" but as a "terrorist organization" by the United States and others. As such, there are no legitimate "exchange rates" to speak of.

Minting the coins is relatively easy, Jameel said, as goldsmiths in
Mosul imported machines from Italy in recent years, each one able to
produce about 5,000 coins a day. The metals probably come from banks the
group seized, ransoms, the homes of Christians and other minorities who
fled, he said...

Each coin bears an inscription that reads, “The Islamic State, a
caliphate based on the doctrine of prophecy.” The 1-dinar coin also
shows seven stalks of wheat, which the group said is meant to represent
“the blessing of spending in the path of Allah.” The five-dinar coin
bears the image of a map of the world.

Oil, the group said in the video, will now only be sold for gold.

Ho-hum, add these folks to the very long list of dollar/America-haters. One thing you can be sure of is that ISIS won't be issuing passports, though. Still, there's a lot of (gruesome) novelty value with ISIS currency already...if you can find it.