Isis plans to mint its own currency

WLDB

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Well they want to be a country so it makes sense that they would be doing this at some point.
 

Machjo

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Well they want to be a country so it makes sense that they would be doing this at some point.

But you gotta give them credit. It's a solid metals standard. You can't counterfeit that unless you can transmute a cheaper metal into another and we don't have the technology for that yet and even once we do, what will be the economic cost of doing so? Would it even be worth it?
It sounds like they're planning on putting a pretty solid currency in place.

Now of course they policies are so terrible on every other front that they will still see their demise, but this currency scheme of theirs is actually a good one worth emulating.
 

Tecumsehsbones

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But you gotta give them credit. It's a solid metals standard. You can't counterfeit that unless you can transmute a cheaper metal into another and we don't have the technology for that yet and even once we do, what will be the economic cost of doing so? Would it even be worth it?
It sounds like they're planning on putting a pretty solid currency in place.

Now of course they policies are so terrible on every other front that they will still see their demise, but this currency scheme of theirs is actually a good one worth emulating.
Why? Are metals inherently more valuable than, say, food? Or apropos of much of the Middle East, water?
 

Machjo

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Why? Are metals inherently more valuable than, say, food? Or apropos of much of the Middle East, water?

It I had a choice between being paid in metal, paper currency, or food, I'd rather metal. Paper currency can be watered down with printing more of it. Food can rot. Metal? Neither. It lasts and its availability cannot be increased so easily.
 

Tecumsehsbones

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It I had a choice between being paid in metal, paper currency, or food, I'd rather metal. Paper currency can be watered down with printing more of it.
And metal currency can be watered down by mining more of it.

Food can rot. Metal? Neither. It lasts and its availability cannot be increased so easily.
You don't have much experience with iron or silver, do you?

The point is, why would you tie your monetary system to something as arbitrary as gold? (Just eliminating the pretence that we're talking about something else, y'know?)
 

Machjo

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And metal currency can be watered down by mining more of it.


You don't have much experience with iron or silver, do you?

The point is, why would you tie your monetary system to something as arbitrary as gold? (Just eliminating the pretence that we're talking about something else, y'know?)

Mining it is a lot more expensive than printing it, so it can depreciate by only so much.

And while some metals can tarnish, they can be polished up easily enough with little effect on their original value. Any loss of value from that would still be less than the average rate of inflation for a paper currency.
 

Sal

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despite seeking to distance itself from the international economy, the new currency’s underpinnings may make ISIS’ economy even more heavily dependent on global fluctuations than most, specifically on precious metal and commodity prices,” according to the FT. “The highest-denominated 5 dinar coin is set to contain 21.25 grams of 21 carat gold, worth about $694, while its lowest-denominated 10 flous coin would contain 10 grams of copper and be worth about 7 cents. The proposed silver dirham coins would range in value from 45 cents to $4.50 at current rates.”

sooooooooooooo what happens when people horde it?
 

Machjo

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sooooooooooooo what happens when people horde it?

It's value increases. But since hording it has no value in itself, either one can melt it down to build something with it or spend it sooner or later, in which case its value will depreciate again. So while there can certainly be fluctuation like any other currency, at least inflation and deflation of the currency will more or less balance each other out over time, unlike fiat currency.

Now of course the Islamic State won't last long enough to enjoy this advantage, but just saying.
 

Tecumsehsbones

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Mining it is a lot more expensive than printing it, so it can depreciate by only so much.

And while some metals can tarnish, they can be polished up easily enough with little effect on their original value. Any loss of value from that would still be less than the average rate of inflation for a paper currency.
Shortly after the Spaniards opened up the New World, there was so much gold coming back to Spain that farmers didn't bother to farm, because everybody had SO MUCH GOLD!

Come harvest time, gold depreciated really, really fast.
 

Machjo

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Shortly after the Spaniards opened up the New World, there was so much gold coming back to Spain that farmers didn't bother to farm, because everybody had SO MUCH GOLD!

Come harvest time, gold depreciated really, really fast.

It went back to its original value.

Also, unlike then, we have no where else to colonize but space, and mining space will be very expensive for a while yet.
 

Sal

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It's value increases. But since hording it has no value in itself, either one can melt it down to build something with it or spend it sooner or later, in which case its value will depreciate again. So while there can certainly be fluctuation like any other currency, at least inflation and deflation of the currency will more or less balance each other out over time, unlike fiat currency.

Now of course the Islamic State won't last long enough to enjoy this advantage, but just saying.

but how can they spend it except within their own culture...they view our money as satanic, so once it begins to circulate we just remove the circulation and they have nothing
 

Machjo

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but how can they spend it except within their own culture...they view our money as satanic, so once it begins to circulate we just remove the circulation and they have nothing

Of course that's a problem, but that is a problem separate from the currency itself. If they should adopt a paper currency, they'd face the same problem because of their war economy. But even if we look at it within their lands controlled by their own sick ideology, the metal currency still has the upper hand.

And I would not cal IS a 'culture'. :)
 

Northboy

Electoral Member
It's like the gold standard. Now that's something worth emulating :)


I would agree it is a step in the right direction having the currency value tied to something. It used to be like that in the West before Bretton Woods and the development of the US petro dollar. ISIS will probably insist on gold to settle their accounts from their oil customers. Indonesia some time ago was talking about a Gold Dinar as the basis for an Islamic currency, so this is low hanging fruit for ISIS to get the Muslim world to accept this kind of currency. It will be interesting to see what China does as they are big gold bugs.
 

darkbeaver

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There's another angle to this story. IS and Al whatever TF are western constructs they've announced their intentions to subvert the west, so have all the other nations reverting to gold standard, see what I'm gettin at, the gold standard enemy of democracy has just been signaled out as just targets. In order to save toilet paper money the gold has to go. Gold is the enemy of western democracy, that's why we sold it all.

Only the enemies of mom and apple pie would covet gold and silver.
 

Tecumsehsbones

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There's another angle to this story. IS and Al whatever TF are western constructs they've announced their intentions to subvert the west, so have all the other nations reverting to gold standard, see what I'm gettin at, the gold standard enemy of democracy has just been signaled out as just targets. In order to save toilet paper money the gold has to go. Gold is the enemy of western democracy, that's why we sold it all.

Only the enemies of mom and apple pie would covet gold and silver.
MMMmmm. . . pie.
 

Northboy

Electoral Member
There's another angle to this story. IS and Al whatever TF are western constructs they've announced their intentions to subvert the west, so have all the other nations reverting to gold standard, see what I'm gettin at, the gold standard enemy of democracy has just been signaled out as just targets. In order to save toilet paper money the gold has to go. Gold is the enemy of western democracy, that's why we sold it all.

Only the enemies of mom and apple pie would covet gold and silver.


I agree with you on this insight. ISIS will in its own way wage an economic war with the West. We shouldn't be too cocky as there are lots of people who would adopt a metal standard, especially in the Muslim community. In the current world ISIS doesn't need the West to trade with, at least in their view.


Couple this with the West's relations with Russia and China and you've got the makings of a real mess.