Last week, I described the announced plans of the Middle East terrorist group ISIS to strike and issue gold, silver and copper circulating coinage where the gold and silver coins would trade on the basis of their intrinsic metal value.
Some general and also numismatic media covered the same announcement with predictions that the difficulty of creating dies, acquiring the presses, acquiring quality metal or coin blanks and producing them in large enough quantities makes it unlikely any such coins will ever be issued.
While I agree that there are large obstacles confronting ISIS at bringing out circulating coinage made of gold, silver, or copper, I’m not sure that any of them are insurmountable.
By the way, at least one reader of my last column misinterpreted my comments about the strategy of ISIS issuing such coins as demonstrating political and economic savvy – and that in my saying so I was promoting ISIS itself. Let me be explicitly clear on this notion.
Nothing could be further from the truth. I mourn for the tragic suffering inflicted on people by all inhumane governments and groups such as ISIS. ISIS is abhorrent.
I would act the same as many people interviewed for the other articles discussing the potential ISIS coinage – I would refuse to accept it for any reason or to buy or sell it in my business as long as ISIS survives.
Once ISIS fails, I could then see being willing to trade such coinage issues just as my company now buys and sells coins and paper money issues of horribly cruel tyrants from the past, or those who used slaves to strike coins, or money that depicts some of the most despicable people in history. When I buy and sell such issues, that does not mean that I espouse the terrible things that Caligula, Stalin, Hitler, Mao and others did. I suspect that this attitude would be common among most other coin dealers.
Whether there will actually ever be any ISIS coinage is a coldly logistical question.
For the most part, the alleged obstacles to such coinage have to do with establishing a major minting operation at a single fixed location and that such a mint would necessarily be within the geographical territory currently controlled by ISIS. Looked at from that perspective, I would agree that starting such production would be pretty much impossible.
However, you have to look at the potential of striking such coins anywhere in the world, and possibly in several locations, of which some or all work could be performed in nations of the Islamic world, or in others that have an incentive to inflict suffering on people holding U.S. dollars.
I agree that virtually all mints that American numismatists and media could list as being capable of producing such coins would refuse to strike any ISIS coinage. However, the list of potential suppliers is much larger than most people realize. Here are some examples.
1) Over 20 years ago, a vital metal piece broke on a very old heavy duty coin counter in my store. General Motors had several factories in our area. One of our customers who was a tool and die craftsman asked to take the broken part. A week later he gave us a personally manufactured duplicate part. I’m certain there are still hundreds of active and retired workers in our market who have the tool and die skills to create acceptable dies and produce coins. How many thousands to millions of skilled tool and die craftsmen are there around the globe?
2) There are hundreds of factories creating precious or industrial metal ingots just in the United States. Many if not most would have the capability of producing dies and striking coins for anyone.
3) In late 2003, I considered the possibility of paying a royalty to a nation to have them strike a pure one-ounce silver coin featuring the design of the 2004 Michigan statehood quarter on the reverse, and the identity of the country, face value, metallic content and date on the obverse. I mentioned my concept to a dealer friend who sometimes handled such commissioned coins. The word quickly got around. With almost no effort or publicity, I received quotes from seven different nations willing to have such coins made in return for a royalty payment. My project never came to fruition, but the point is that it would only take one nation to cooperate with ISIS for such coins to be struck.
4) Some of you have probably seen the lovely coinage issued by the New Zealand Mint. Did you know that, although the Mint is headquartered in that nation, none of their silver coinage is struck there? Virtually all of the silver coins are struck in America by private companies operating under license. Could ISIS do something similar somewhere in the world? In my mind, the probability of success is not zero.
5) I assume that most readers are familiar with the rash of counterfeit coins and precious metal ingots coming out of China. The quality of the work is sometimes extremely good. Would any of these manufacturers be willing to strike coins for ISIS? I would not bet against it.
As I’m sure most of you know, Islamic terrorists have been able to move substantial funds into the United States. I would not expect it to be any more difficult to send a payment to cooperating businesses in other nations, especially those under Islamic influence.
So, I think you have to assume that ISIS would be able to have gold, silver and copper coins of decent quality produced somewhere, whether in China, Russia, an Islamic nation, or elsewhere. I could also see this being done even at a loss if such coinage generated propaganda value to ISIS. However, there is still the potential obstacle of getting the coins to actually circulate.
Some of the other authors assume that most people in the Middle East and in other Islamic nations would prefer paper currency instead of physical gold coins. I am sure that some of the population might feel that way. However, the culture to desire and want to hold physical precious metals is much stronger among the citizens in those parts of the world than in America. Some might want to trade the ISIS coinage to show support for that organization. Others will prefer to receive such coins because they have intrinsic value, no matter the origin. As a result, to a certain degree I expect to see such coins being sought out of circulation by far more people than the other authors expect.
There are parts of the world where gold is treated as actual circulating money. If you want to purchase real estate in Vietnam, for instance, you will have to pay with gold and no other kind of money. I have also heard that, in some circumstances, it is still possible to spend British gold sovereigns at the souks (marketplaces) in Egypt.
I’m confident that the U.S. government would prohibit the import and ownership of any ISIS coinage. However, if the ISIS coinage contains full value of metal, the U.S. government will not be able to make such pieces undesirable to every single inhabitant of the planet.
Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com and http://www.coininfo.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).
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