ISIL’s Return to Gold: Don’t Sell Them Short!
By Shlomo Maital
From the start, the world has consistently underestimated ISIL. (the “L” stands for “Levant”, or, Mideast). The American-led bombing campaign, for instance. America and its allies have conducted 6,000 sorties in total. (A sortie is a bombing mission by one plane). This is a drop in the bucket. The New York Times points out that Syria, the collapsing non-country does this number of bombing raids on its own civilians every few days.
Now comes the 55-minute video, Return of the Khalifah, a video denouncing the fractional reserve banking system, and advocating (notes The Economist) “the return of the ultimate measure of wealth for the world”: gold. The video shows the new ISIL gold coin.
There is no risk that the gold coin will replace the paper dollar, as the video promises. But the economics in the video are very strong. America HAS over-expanded its dollar money supply, to the detriment of other countries. The gold standard, which lasted for 150 years, was indeed successful in keeping countries from excessive debt and excessive money creation. If the dollar is the world currency, it must be stable — yet the U.S., to spur its own economy, has created massive excessive amounts of them.
The video strays into blind hatred, as usual, noting that “America has been able to avoid hyperinflation and maintain its military hegemony largely thanks to the petrodollar system. Islamic State hopes that with the introduction of what it is calling the dinar, all oil will be paid for with gold instead of being priced in dollars, which would “mark the death of this oppressive banknote” and bring America “to her knees” “. This will not happen. But the fact that oil prices are denominated in dollars, and largely paid for in dollars, has doubtless been a benefit for the U.S., though it is now becoming an energy exporter.
The world today is awash in money, owing to QE (quantitative easing) practiced by the U.S. and European Central Banks. This mountain of money has created the seeds for the next global crisis. Neither the U.S. Fed nor the ECB know how to end QE and begin raising interest rates, without panicking capital markets and crashing in particular the huge bond market. Under a gold standard system, this could not happen.
Let us stop underestimating, scorning, discounting ISIL. Their use of media is highly sophisticated. Their videos are professional. Their military tactics borrow from the tactics used by special forces of the U.S., Australia and Britain. They are not going away. And they do pose a threat. They are the prime cause of the massive wave of humanity now washing up on Europe’s shores. The longer ISIL survives, the harder it will be to eliminate it. It is time to wake up. Their gold coin campaign is just one more reason.