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Thoughts on ISIS Coinage
ISIS says it will soon issue metallic coins. The early reports suggest there will be gold, silver and copper coins. ISIS is expected to announce shortly how their coins will trade. The indication being that they will trade according to the value of the metal of which they are made. Many critics of the fiat currency regime may be attracted to this new money.
I see some of the same problems that I saw with Bitcoins, though Bitcoins are fiat currency. Their "mining" may be on a gold-like pace, but Bitcoins are not backed by gold,nor does price appear to be tied closely to the price of gold.
To the extent that the new money is perceived to be more sound that paper money, the coins will be hoarded. To the extent that they are hoarded, they will not provide a sufficient means of exchange. The monetary equivalent of hacking may be counterfeiting. The US and other countries work hard to prevent counterfeiters, though they still exist. The ISIS coins appear to be vulnerable to counterfeiting.
The ISIS money, like other foreign countries' coins and notes, are not generally acceptable as payment for one's liabilities outside of one's country. Just like you cannot pay the American grocer or British landlord in euro, yen or even gold nuggets, ISIS money will only be good where ISIS dominates, and even then the people living under its heal will find other means of transactions, if necessary.
Remember ISIS in not a country. There is no enforcement of contracts. There is no judicial system apart from the sword. The utility of gold, unlike water or air, is not obvious. It is an expression of social relationships. It requires elements of social trust which do not and cannot exist in the territory ISIS terrorizes. As it said, trust in Allah, but tether your camel.
This Cool Video from CNN was posted on You Tube. Former US Treasury official, Jimmy Gurule explains how ISIS is funded, including illegal oil sales in a little less than four minutes. http://www.youtube.com/watch?v=NVaUNNvbhig
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Modern machine technologies tump gold coins. Reality is like that it just does not care what you would like. It is what it is.
A gold standard wont work. Get over it and come up with a concept that could.
http://www.youtube.com/watch?v=4_kbJPRXhMU
Sorry. Its gonna get shaved or worse. http://www.youtube.com/watch?v=SxYazg1jQwE
Do not trust anything that you can not personally verify.
Story sounds as phony as the bullshit story to get us into a war in Syria.
By the way the so-called moderate resistance in Syria the FSA and Jabat al Nusra that the worthless cock sucker McCain backed just decided to side with ISIS.
So if this bullshit story about conquest in the ME is actually a real terrorist organization on the rampage, then McCain and Lindsay Graham need to be tried for equipping, financing, lending material support to and sponsoring terrorism and tried for treason.
I think I would hoard, too, if those coins were made availabe to me and I were in that shit hole. Stash all the shiney, shave the beard and party on, Garth. Can you imagine the upcoming theft stories IF they ever issue?
As I posted on an earlier thread, This allows ISIL (ILV, LEV, ISM, ISS, or IST - need to give 'em an ISO-3 desig soon) to sell oil in Au and Ag; and escape the scrutiny it would face if the Xactions were done in USD or EUR.
So ISIL and its Trade Partners de-dollarize - wherever they are. Heck, their sympathizers can just melt it and walk with the raw lump across the Globe.
As other Oil/Gas Producers follow suit, Consumers may just start buying Gold and Silver instead of USD and USTs for their Petrol Budget - just from a Valuation Preservation Play.
What sayeth ye, Gold and Oil Pros?
That's the beauty of gold. An ounce of .999 gold is an ounce of gold, no matter what you print on it.
The only thing ISIS has done that I take exception to, is to have (reputedly) cut off the head of a Muslim convert. Otherwise, it's all their business and not mine.
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not viable currency outside of where ISIS rules by sword.
How viable would the US dollar be without the 'ruled by guns' part?
Just asking.
The currency will indeed be viable outside ISIS BECAUSE it is made of gold silver and copper and trades at its metal value in local currency... less coin dealer buy sell spread. A golden Kruggerand trades at the same price as a Maple Leaf, Vienna philharmonic etc... Gold is money and was before ISIS, USD, Rome etc.....and will still be after they are all long gone.
There is a small difference in price between "coins" and "rounds". You can buy silver rounds, one oz. or silver coins, one oz. Not much of a difference in price. It's the premium to redeem rounds is slightly higher, but the initial purchase price is slightly lower.
Ask a cabbie almost any place in the world if they will accept US dollars. I have never been turned down. The US empire does not exist only or even primarily at gun point.
you'll get takers, but they'll add a large spread.
also note that around the world, dollars are unusual to handle, so: unfamiliar, so: uncertain if forgery or not (just sayin).
I don't see why cabbies accepting a US dollars undermines my point.
If the dollar was backed by the Fiji's military, I think you would be paying for your ride anothere way.
when is the last time you left the American continent?
you might dismiss us for being a tough crowd and audience, but if you pull that stunt outisde the American continent or some third world country, you'd have the police called on you at best... or your face punched in.
I don't get some of the comments here.
Minting is NOT advanced technology, it's been done for thousands of years, and it very easy to do in a simple metal shop
It is EASY to protect from counterfiting, metals have a specific gravity, feel, ring, weight, and so on!
Minting edges around the coin makes it easy to even stop things like clipping.
They can easily "call in" all of the gold in the area for their coins by simply offering a small seniorage, again something that's been successfuly done many times in the past! I would expect the price of gold to rise in the area after the coins are minted, so, you would get your seniorage fee back by the increased value of the coin.
The biggest threat is that MAYBE a high-tech mint (like the US or Euro mints) can do something like electroplating tungstine with gold and flooding the ISIS area with it, but, Even that is dectable with that lazer metal tester
I mean come on, this is why gold and silver is money in the first place, it's really reliable and the minting technology is literally thousands of years old.
Would this be the first "nation" in history to actually go on a gold standard during a fucking war? It sounds like western propaganda to me.
It makes sense when the US is using its currency to thwart every thing they try to do. Gold goes right around the US currency, or any other currency for that matter.
Its pretty easy to enforce the use of coin based money when the money is 'real' and you have the ability to ban (and punish) the use of paper fiat.
And why would the author have any fears that there will be hoarding of these coins - especially if they cannot be used outside ISIS territory? Would any country (hint:USA) prohibit the export of coins (hint: pre 1982 pennies)? Or maybe ban (hint: India) the import of gold? Or sieze the money of anyone carrying (hint: USA cops) too much fiat?
If you live near the Canadian or Mexican borders (either side) you know there are de facto exchange rates that let you spend your fiat in the neighboring country.
I do not fear hoarding. I say if it is a better store of value than other means of exchange, it will be hoarded. You can take British pounds out of the UK. It doesn't mean you can use them where ever you want, or that people have to accept them. The same with these gold, silver, copper coins.
And now, terrorists have control of a mint. They can acquire consistent content precious metals, manufacture the tooling, have the presses, the skilled labor to run them, quality control, the management infrastructure to manage inventories, materials and product sales and distribution, Yeah, Uh Huh, Right.
This is the biggest bullshit story on issi I have heard yet. There is a sovereign owned mint involved here or contracted out to a known private mint, has to be for such an undertaking. Any guesses as to which sovereign runs or harbors a private mint with such shady customers?
Considering the origins of isis it could just as well be the San Francisco Mint now couldn't it?
your average early-medieval caliphate or feudal kingdom could do it, why not a post-space-age religious-nutter fiefdom?
While the US will send the secret service to investigate any counterfeiting, it is perhaps a bit more intimidating for counterfeiters if the ISIS penalty is the separation of your hand or your head from the rest of your body.
...people living under its heal ...
Freudian slip or honest error?
come on. grow up. It is called auto-correct.
That coin begs to be tested.
My guess is its a trackable coin. Dont keep it with the rest of your stash. Its sucker bait. Best use it for electro plating as soon as you can.
Definatly collectable though
WTF! The whole point of gold in money is that it needs no contract. I can take it anywhere and melt it down if I wish and it is still worth the same.
'I see some of the same problems that I saw with Bitcoins'... The author's an idiot.
I never said you could not take the coins where ever you want, just that they won't be acceptable tender to retire obligations. That is to say you cannot use them to buy goods outside of ISIS contrlled territory. Gold as money. Right. Try paying your grocer or landlord with gold. Give a gold nugget to the gas jockey. I wonder who they will think the idiot is....Hmmmm.
interesting history of saudi arabia's use of hard metal currency until ~ 1955..
http://www.saudiaramcoworld.com/issue/196901/the.riyal-a.miracle.in.mone...
But every town of any size has "we buy gold" shops. They are not gonna care that no law in the US gives these coins value, becuase they have value as a commodity totally apart from their value as a coin. If they were just blank rounds of gold and silver they would still have value. They may even have a higher value because they are guaranteed by ISIS to be the stated weight and purity of the metal, and most counterfieters would not want to cross those psychopaths.