Islamic State: from terrorism to economic regression

The film posted online by Daech on the 1^st of September last year lasts nearly an hour and appears in the style of a documentary, shows statistical data and calls upon “experts”. “The rise of the Khalifah and the Return of the Gold Dinar” explains the theological motives which are pushing Islamic State (IS) to adopt a new currency, which, as it happens, will be numismatic, and will mark a return to the golden age of the Muslim Empire. IS’s wish is to prove to its adherents and sympathisers that it is the worthy heir of the Muslim conquerors of the Umayyad era, whose capital – Damascus – ruled over an Empire which stretched from the Iberian Peninsula to the Indus. At the height of their power, these populations used the gold dinar which was put into circulation by the Caliph Abd al-Malik ibn Marwan (who reigned from 685 to 705 A.D.) and weighed 425 grams. It has exactly the same specifications as the dinar mentioned in the propaganda film in question.

IS is clearly in search of legitimacy and is hoping that the symbolism of the gold dinar and the return of the glorious Caliphate of yesteryear will terrorise the world, all the while unifying the Muslim youth even more through a rediscovered dignity. After political power and its territorial conquests comes economic power and the construction of a sort of national narrative represented and symbolised by these gold coins. On the one side of the gold dinar there are seven ears of wheat which signifies the abundance and blessing of God, and on the other there is a map of the world indicating the territories which are to become property of the “Ummah”, namely Istanbul, Rome and the United States of America. The minaret of Damas, the chosen city for Jesus’ return to Earth at the end of time, is forged on the silver 5 dinar coin. In fact, the copper coins for daily usage will make their appearance and will serve to prove that IS is planning on establishing responsibility and stability in zones that it has under its control. Inasmuch, the introduction of this relatively varied numismatic currency is also pursuing another objective which consists of destroying the dollar and replacing it with gold, silver and copper coins.

IS is in fact hoping that China and Russia will thus be tempted to sell their dollar reserves and their US Treasury Bonds, which would bring about the fall of the American financial system. Does the film not state that “the US monetary system’s tyranny imposed on Muslims has been the reason for their enslavement and impoverishment”? To do this, however, IS is treading carefully around the elementary economic and political rules because, in order to be recognised as a State, it will have to be prosaically recognised by other States. They know that mutual recognition leads invariably to the recognition of the currency of the State in question. In other words, there will be no recognition of Is’s new version of the dinar without the prior recognition of IS itself as a legitimate power. Beyond the countries’ States themselves, what Iraqi or Syrian citizen would accept dinars – even if they are gold – as remuneration for their work if they are incapable of transferring them into other countries, to their families who might reside in Egypt, for example?

As for the ravaging impact on the US economy that is hoped of the introduction of this numismatic currency, it indicates a gross miscomprehension of basic macroeconomics, since the distribution of currency in the modern era is based entirely on the Gross Domestic Product of the country in question. The smooth running of an economy will never be able to be propped up by the circulation of gold or silver coins because there wouldn’t be enough of these precious metals on the planet to cover even global financial and commercial transactions. From atop their 17 trillion dollar economic activity, the United States can therefore sleep even easier in the knowledge that China and Russia would never sabotage themselves by clearing their Treasury bond reserves, which is actually the safest place in the world to store cash resources. It is therefore production which determines the value of the dollar and not the quantity of gold in circulation, since a return to the gold standard would necessarily implicate growth in our Western economies divided by ten! At a time when the use of cash throughout our modern societies only has a few years left before our economies inevitably move on to a completely electronic system, IS’s evident desire to reintroduce gold coins is a regression, pure and simple. Let us never forget that coins were born and issued from wars because soldiers, mercenaries and merchants alike wanted to be sure of getting paid. With their dinar (“denarius” being a Roman term in essence), IS therefore intends on callously taking us back to a past that was once intimately tied with violence and trauma.