I previously wrote about the gold Iraqi dinar on my other site
When ISIS took over Iraq’s second largest city last year, it stole nearly $450 million from Mosul’s central bank. That included unknown, vast quantities of gold bullion, according the International Business Times and several military experts keeping track of ISIS.
ISIS believes the global economy’s current system of paper money is a disaster. A video produced by the ISIS propaganda media unit explains this in a five minute video online called “Dark Rise of Banknotes and The Return of the Gold Dinar.”
In the video, they condemn the rise of bank notes like the U.S. dollar, which started as “a mere claim to gold” and are now “a worthless piece of paper.”
For ISIS, only pure gold currency will do — even though economists say an ISIS gold currency is doomed because the population would most likely want to hoard gold rather than use it as currency.
Look back to medieval times, ISIS explains in the video. While the Islamic empire that stretched across the Middle East and Africa used gold and silver, “the rest of Europe… lay witness to the dark rise of banknotes, born out of the satanic conception of banks, which mutated into a fraudulent… financial system of enslavement orchestrated by the Federal Reserve in America,” the video says.
This is a still image from the ISIS propaganda video, which blames the Federal Reserve for destroying the world’s currency system.
ISIS leaders have been identified by law enforcement and sanctioned by the U.S. Treasury, so they’re essentially blocked from using the world’s legal financial system. But gold offers a way for them to buy weapons and equipment, because metal isn’t tracked like paper cash and electronic wire transfers.
“It’s accepted all over the world. No one’s going to argue with you or question how you’re going to pay for something if you offer gold,” said Daniel Karson, the chairman of private investigative firm Kroll. Karson, who previously investigated financial fraud cases in New York and hunted down Saddam Hussein’s hidden assets, said banks typically lower their identification standards for customers if they offer gold.
Then again, ISIS claims it is minting its own gold coins with recognizable logos, so that would get tracked anyway.
Gold does have drawbacks. It’s extremely heavy. Consider what it takes to carry $1 million. A duffel bag stuffed with $100 bills weighs 22 pounds. It would weigh 58 pounds with gold.
“They’re better off using the existing Iraqi and Syrian currency they have,” said Martin Reardon, a former FBI agent who specialized in counter-terrorism missions. He’s now an executive at The Soufan Group, a private intelligence firm.
In short: Gold is just not very convenient for quickly making a lot of transactions. “These are mere fantasies of returning to a 7th Century point in history when the gold-based economy of the Arab world was at its peak,” Reardon said. “It’s a real attempt to make ISIS appear as something it is not now — nor will ever be: a global economic power.”
The ISIS fixation with gold is also a recruiting tool. It offers a departure from corrupted, modern Western ways, according to Andreas Krieg, a military scholar who teaches at King’s College London in Qatar. For example, ISIS blasts the “petrodollar” system that made dollars the global reserve currency. There’s been constant demand for American bills ever since the Nixon administration struck deals with Saudi Arabia and other OPEC nations so that all oil exports are priced in U.S. dollars.
Krieg explained why this resonates. “The narrative is unsurprisingly anti-imperialist, suggesting that the U.S. has conspired to control the world… to deprive Muslims from their own oil money,” he said. “All of this is quite common propaganda that Muslims in the region are susceptible to.” The hypocrisy here is that ISIS is accepting U.S. dollars to sell oil and using them to buy equipment, Krieg said.