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Gold at End of Extremist Rainbow:
Islamic State Release Their Own 'Fake' Currency

Marwan Jabbar
The extremist group controlling Mosul have minted their own gold and silver coins and put out a video boasting about it. But, as locals point out, the new coins are not even pure gold.
3.09.2015  |  Baghdad
The opening titles for a new video from extremist group, the Islamic State.
The opening titles for a new video from extremist group, the Islamic State.

The extremist group known as the Islamic State has released a new video detailing a new financial strategy and the release of their own currency in the form of coins, to be known as the golden Islamic Dinar and the silver Islamic Dirham.

The video’s narrator speaks in English, with subtitles provided in several languages. Surprisingly Arabic subtitles were only added 48 hours after the video was released.

The video production is of a high quality, just like all of the Islamic State, or IS, group's previous productions. The video’s message is predominantly composed of anti-capitalism propaganda and uses explanations, charts and infographics, similar to those used in YouTube videos that make economics look more “pop culture”, like an animated version of a book titled “The Flaws of Capitalism for Dummies”.

The 55-minute-long video tells viewers that the Sharia system – in this case, based on the IS group's arcane version of religious law – is being fully implemented, even in economic aspects. The IS group refuse to use what they describe as the “infidel's system” of paper notes, that are not backed by gold, that is exploited by “greedy banks”. Basically it is yet another in a series of a propaganda videos selling the idea of living under the rule of the IS group to young Muslims. Unlike other terrorist groups, their videos don't just focus on fighting unbelievers. Rather they send out the idea of an Islamic utopia to followers worldwide.

But is quoting from the history of gold-dependent economies and sugarcoating that with Islamic terminology enough to convince anyone, let alone Iraqis, both inside and outside IS-controlled territories?

For more than a month, the Iraqi people have been demonstrating, calling for the end to corruption, and for economic reforms, better infrastructure and better employment opportunities. So the IS group might have thought the timing was right for such a video. Unfortunately for them, the viral potential of the video was killed off by other brutal videos showing IS group prisoners being burned alive.

Meanwhile people who live under the IS group in Mosul don’t even have enough bandwidth to watch such a long video, one that is hopelessly trying to convince the audience of the merits of the gold dinar, once the symbol of an Islamic empire at its peak.

Sources in Mosul spoke to NIQASH about how people there are not ready to accept this new currency.

And the people working in Mosul's local gold retail sector – the city used to have Iraq’s largest gold markets - confirm that the coins are not even pure gold. “They are a total fraud,” one local goldsmith told NIQASH. “Just a metal galvanized with 21 carat gold,” he said disdainfully. That shocked many locals who had been considering exchanging some of their own money for the new dinars.

But what of the philosophy behind the new IS-hyped gold dinar? The anti-capitalist message has parts that many Islamic thinkers may subtly agree with should they be dragged into such a discussion of economics regarding interest rates and taxes. Hard line Islamists may prefer a gold currency because its value transcends time and location as well as for it's taut symbolism: it reminds them of what once was an Islamic empire with a unified currency – also a golden dinar – for hundreds of years.

Interestingly, it also resonates with Western economists who advocate “hard money” policies – a return to a gold or silver standard – and who are far from Islamist. In fact the IS group used some of those advocates in their video to give more credibility to their message. People like former US Presidential candidate Ron Paul are mentioned as is the IS group's “favourite”, investment adviser and author, Mike Maloney. The latter is also the producer and host of an online series, Hidden Secrets of Money, focussing on gold and silver in history.

It's clear that Maloney's popular videos are the inspiration for the IS release, with the IS group producers plagiarizing footage for their own work. The IS producers also use footage from various Hollywood movies, including from the highly acclaimed There Will Be Blood, to depict the discovery of oil in the early 20th century.

The IS group was taxing the salaries of civil servants as well as every other transaction in its territories. But when the central government recently cut wire transfers to its civil servants in Mosul, they lost an important source of income. The drop in oil prices has also impacted on the IS group's revenue generating system and they have become less generous with their loyalists.

Locals in Mosul say that the Caliph's men are desperate to find new ways to raise capital and that is why they came up with this currency idea. But nobody is falling for it so far and locals fear the extremists' reaction to this resistance. The extremists know that their state's sustainability and their very own salaries depend on the success of the gold dinars. But how any tension around the IS' impure gold currency will affect the average local in Mosul, already struggling to support their families, nobody knows.

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