The best thing ISIS has going for it with its decision to mint its own currency is that the coins are sure to become collectors items (which is another way of saying that I want one).
Right now, the people living under the Islamic State are using dollars, euros, Syrian and Iraqi dinars. In other words, currency that has internationally recognized value and is not traceable back to the Islamic State. If they refuse to use that "fiat currency" and insist on their own metal-backed coins, it is going to immediately cut down on the people who are willing to do business with the group as the profits of those transactions will also be clear evidence that the dealer is breaking the law with an almost universally despised group. Who would want that? Unless ISIS bends its own rules and is willing to trade in other currencies, this will be a barrier to finding people who are willing to do business with them.
But even if ISIS somehow found customers, its decision to only accept gold for oil means that its oil sales will not be buffeted by two commodities prices and not just one. Maybe sometimes they will balance each other out (with oil down and gold up, like it was in 2012). But right now, gold and oil prices are both sinking. So this bad idea seems like a particularly bad idea at this time.
Right now, the people living under the Islamic State are using dollars, euros, Syrian and Iraqi dinars. In other words, currency that has internationally recognized value and is not traceable back to the Islamic State. If they refuse to use that "fiat currency" and insist on their own metal-backed coins, it is going to immediately cut down on the people who are willing to do business with the group as the profits of those transactions will also be clear evidence that the dealer is breaking the law with an almost universally despised group. Who would want that? Unless ISIS bends its own rules and is willing to trade in other currencies, this will be a barrier to finding people who are willing to do business with them.
But even if ISIS somehow found customers, its decision to only accept gold for oil means that its oil sales will not be buffeted by two commodities prices and not just one. Maybe sometimes they will balance each other out (with oil down and gold up, like it was in 2012). But right now, gold and oil prices are both sinking. So this bad idea seems like a particularly bad idea at this time.
