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cheka.
27th April 2016, 04:11 AM
this is a good one. could be satire....scary that it's not

http://www.huffingtonpost.com/entry/ted-cruz-gold-standard-isis_us_5719079be4b0c9244a7b334f

Republican presidential candidate Ted Cruz’s support for reviving the gold standard is likely giving establishment Republicans huge doubts about embracing him. Their concerns are well-founded — and not only because the gold-backed dollar has been thoroughly discredited as good economic policy. Reviving the gold standard is also a key platform of the Islamic State.

The notorious extremist group announced in September last year that gold and silver would be the currencies in its new pseudo-state. Its monetary agenda was rolled out in a slick 55-minute video, “The Rise of the Khilafah: Return of the Gold Dinar.”

Click here to watch the full English-language video.

The Islamic State’s gold pitch is part of its own particular vision for reviving an Islamic caliphate. But the video’s embrace of doomsday economics and anti-Semitic conspiracy theories hews closely to a narrative popular in ultra-conservative circles in Western countries.
How Conspiracy Theories Appeal To Disaffected People

Attacking the capitalist system is a way for the Islamic State to appeal to the young underprivileged masses of the Muslim world, who are often angriest about corruption and economic inequality in their own countries, according to Abdulaziz Sachedina, chair of the Islamic studies department at George Mason University. Secular revolutionaries used the same tactic to capture the minds of a previous generation of Middle Eastern youth.

Whenever “you are somehow critiquing the system in place at the moment,” that’s “very appealing to the underprivileged members of society,” Sachedina said. “You do find that they resonate with it. ‘Somebody is questioning the multibillionaires living in our midst.’”

Conspiracy theories thrive on the left and right when confidence in powerful institutions has deteriorated.

“When trust disintegrates, then you are open to these Paul Reveres who are spreading the ‘real truth’ about what happens to you in your life,” said Bob Goldberg, a professor of U.S. history at the University of Utah who specializes in studying conspiracy theories.

“I could see how ISIS could be very attuned to making an argument that all of these problems with money and the economy are the result of a small group making plots for nefarious ends,” he added.

And once people have turned to radical explanations, it is often difficult to supplant their belief in their new truths.

At least that is the experience that Dean Baker, co-director of the progressive Center for Economic and Policy Research, describes having with American “gold bugs.”

“Thinking of it as a religion is right,” Baker said. “Nothing can shake these people’s faith in gold — no matter what evidence you give them.”
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Why ISIS Is Quoting Ron Paul

Whether Islamic State leaders sincerely believe what they are peddling about the gold standard or are merely using the idea to achieve other means, their propaganda video provide a detailed explanation of their fixation with gold. The narrator echoes the talking points of American gold standard proponents that a floating currency allows the Federal Reserve to print money without limit, which reduces the value of people’s savings.

In fact, the video gives over a chunk of time to Ron Paul, the former U.S. congressman who has long made restoring the gold standard a pillar of his small-government, libertarian agenda. “As Ron Paul says,” the narrator offers at one point, suggesting a familiarity and camaraderie with Paul that would likely chafe him.

The Ron Paul Institute did not respond to a request for comment about the Islamic State’s use of the former congressman’s name or the fact that the group appears to endorse one of Paul’s core policy positions. The Cruz presidential campaign did not respond to a request for comment about their common policy position either.

The Paul clip featured in the video criticizes the Federal Reserve’s post-financial crisis policies designed to boost economic demand by keeping interest rates low. “People who have saved,” Paul says, “they’re being robbed.”

Thinking of it as a religion is right. Nothing can shake these people’s faith in gold — no matter what evidence you give them. Dean Baker of the Center for Economic and Policy Research

The video argues that the U.S. decision to remove the dollar from the gold standard in 1971 would have generated mass inflation had the U.S. government not also conspired to ensure that oil was traded in U.S. dollars. The so-called petrodollar system, the theory goes, keeps demand for the dollar constant, which props up its value while preventing hyperinflation.

The video also asserts that all of this was a plot by “the Jews,” who used positions of leadership at the Federal Reserve to get the U.S. to do their bidding. “In this age, the seeds of corruption were sown by America and cultivated by the Jews,” the video states as images of former Fed chairmen Alan Greenspan and Ben Bernanke, both Jewish, appear on screen.

Historically, the specter of the subversive “Jewish banker” has been a ubiquitous feature of economic conspiracy theories.

“Trot out the usual suspects, and the usual suspects, over and over again, are the Jews,” said Goldberg, the Utah professor. “Faces we don’t know — but these are the hidden hands, the puppet masters that control the world.”

The video argues that the petrodollar system is designed to subjugate the other nations of the world by forcing them to export products to the U.S. and re-invest the dollars they earn from the exports in U.S. Treasury bonds. But the Islamic State also shares the belief of U.S. gold bugs that the system could come crashing down at any moment if those bondholders began offloading their Treasury bonds in a concerted campaign to weaken the dollar. The video quotes gold guru Jim Rickards to describe the scenario.

Unlike Rickards, who views the collapse of the dollar as a negative outcome, ISIS sees it as an opportunity to replace the dollar’s power with its own gold and silver currencies.
Str Old/Reuters
President Richard Nixon took the U.S. dollar off the gold standard in 1971.
Not Actually How Modern Economics Work

The economic argument laid out by the Islamic State and the gold bugs does not hold up. Companies are free to trade oil in whatever currencies they want — and in fact, many choose to buy and sell in euros. The vast majority of oil is traded in dollars not because of any secret diktat, but because companies and governments find it the most useful currency to do business with, thanks to the strength of the U.S. military and economy since World War II.

The dollar “just became the norm — just like the English language,” Baker said.

Nor is there any law or treaty requiring China or the oil-producing Arab nations to hold on to the dollars they receive and re-invest them in U.S. Treasury bonds. They choose to do that because it is safe.

What is more, the strength of the dollar has always been a double-edged sword for the United States, since it makes U.S. exports less competitive. If some countries began trying to tank the dollar for strategic reasons, other nations would likely begin buying up bonds to prevent U.S. exports from dominating world markets.

Nonetheless, Yasir Qadhi, an Islamic theologian at Rhodes College in Memphis, Tennessee, suggests that someone in the Islamic State hierarchy finds the economic arguments for a gold standard compelling.

“It’s pretty clear that there are some people high up in their chain that have these ideas and now have an opportunity to implement them,” Qadhi said.
Al Hayat
ISIS presents in its propaganda the gold dinar coin, which it claims to have minted.
So Does This Have Anything To Do With Islam?

The gold standard as proposed by the Islamic State diverges from the plans of Ron Paul, Ted Cruz and other American proponents. Unlike the American gold enthusiasts who would make paper currency redeemable for gold, the Islamic State claims to have made actual gold and silver coins the sole media for commerce in the areas it controls.

True to its name, the group argues that gold and silver are the only Islamically acceptable currencies, since they were used during the time of the Prophet Muhammad and the early Islamic empires.

“With the permission of Allah, the oil will only be sold for gold, not for Federal Reserve bank notes or any other fraudulent note that the tawaghit [tyrants] have imposed on the people,” the video narrator states. “And in order to realize this objective and the great shar’i [legally prescribed] goal of protecting the people’s wealth, the shura council of the khilafa [caliphate] tasked the treasury of the Islamic State with returning the true and ultimate mediums of exchange and shar’i measures of all goods and services for the ummah [the Islamic community] through the minting of the silver dirham and the gold dinar.”

The gold dinar and silver dirham coins are described in the Quran and other texts as the currency used by Muhammad and his followers. But the great majority of Islamic scholars reject the notion that Islamic law requires contemporary Muslims to abolish fiat currencies — money not backed by a physical commodity — and use gold and silver instead.

“There is no ruling in the Sharia which would say that this is the only way of guaranteeing exchange of goods and services among people,” George Mason University’s Sachedina said.

The Islamic State’s quest to replace paper money with gold and silver is “definitely not theology,” according to Qadhi, who also serves as a dean of academic affairs at Al Maghrib Institute, an Islamic education center in Memphis.

“Fiat currency is a modern issue,” Qadhi said. “How can the Quran mention anything about it?”

Abbas Mirakhor, a former senior official at the International Monetary Fund and a pioneer in the contemporary field of Islamic finance, said that what makes financial interactions Islamic is not the medium of exchange, but whether they honor the principle of risk sharing. That principle is why Islamic law prohibits lending with interest payments, since that transfers risk from the lender to the borrower, according to Mirakhor, who is currently chair of Islamic finance at the Global University of Islamic Finance in Kuala Lumpur, Malaysia.

Malaysia is coincidentally the only majority-Muslim nation where an attempt to revive the gold standard for both professed religious and economic reasons has gained traction in recent years.

Fiat currency is a modern issue. How can the Quran mention anything about it? Islamic theologian Yasir Qadhi

Despite its supposedly religious grounding, the Islamic State’s monetary policy is more likely part of a broader attempt to cast the group as the leader of a struggle against Western domination. In this narrative, the dollar is “representative of imperialism to take over the Muslim lands,” said Jacob Olidort, a fellow at the Washington Institute for Near East Policy, who specializes in conservative and fundamentalist Islamic movements.

The video describes the September 11 attacks as the “first blow to their satanic financial system, pulverizing the twin idols of capitalism.” The establishment of the Islamic State with its own gold- and silver-based currency is “the second blow to America’s capitalist financial system of enslavement ... casting into ruins their fraudulent dollar note.”

Qadhi, who works to dissuade Muslim American youth from joining the Islamic State and other radical groups, said its primary tool for recruiting young Western Muslims is an appeal to “political grievances,” like the Syrian government’s oppression of its people or the Israeli government’s mistreatment of Palestinians. A new economic system is one of the “secondary or tertiary issues.”

“They are offering a package deal: ‘We have an entirely new civilization,’” Qadhi said.

He also noted the Islamic State may have more practical considerations as well.

“They understand they cannot be a part of the global economic system,” Qadhi said. “If they were to print money, who is going to accept that money?”

cheka.
27th April 2016, 04:15 AM
ha ha, the cherry on top

http://www.nytimes.com/2016/04/06/world/asia/osama-bin-laden-was-bullish-on-gold.html

As an Investor, Osama bin Laden Was Bullish on Gold

WASHINGTON — Osama bin Laden, gold bug?

It appears so. At the end of 2010, Al Qaeda found itself suddenly flush after securing a $5 million ransom, and the group had to decide what to do with its windfall. At a time when the financial uncertainty of the Great Recession made gold a hot investment, Bin Laden turns out to have been as bullish about the precious metal as any Ron Paul devotee, Tea Party patriot or Wall Street financier.

In a letter that he wrote in December 2010, Bin Laden instructed Al Qaeda’s general manager to set aside a third of the ransom — nearly $1.7 million — to buy gold bars and coins. The letter, written in Arabic, was part of the trove of intelligence seized by Navy SEALs in the raid on Bin Laden’s compound in Abbottabad, Pakistan, in 2011 that was declassified last month by the Central Intelligence Agency. It offers a glimpse into how Al Qaeda sought to manage its finances and what militant groups have tried to do with the money they raised.

“The overall price trend is upward,” Bin Laden wrote to Atiyah Abd al-Rahman, the Qaeda general manager. “Even with occasional drops, in the next few years the price of gold will reach $3,000 an ounce.”

Bin Laden may have lacked investing acumen — gold peaked at $1,900 an ounce five months after his death in 2011 — but he seems to have had a keen sense of the financial zeitgeist. His belief in gold’s bright future was shared at the time by many Americans and a number of financial luminaries, including George Soros and John Paulson, both of whom were investing heavily in the precious metal. Demand was so high that in 2010, JPMorgan Chase reopened a long-closed vault used to store gold under the streets of downtown Manhattan.

It is probably safe to assume that if Al Qaeda bought gold — American officials could not say whether Bin Laden’s instructions were followed in this case — the militants did not hand it over to JPMorgan for safekeeping. But American officials believe that the group had previously relied on gold as a safe haven and an alternative currency to the dollar. Al Qaeda would also have had access to gold brokers in Pakistan’s tribal areas and the loosely regulated gold market in Dubai, United Arab Emirates, at the time Bin Laden wrote his letter.

“There was always speculation about how Al Qaeda kept excess capital,” said Juan C. Zarate, a deputy national security adviser during the George W. Bush administration who led American efforts to track the militants’ assets after 2001. “They grew worried that we were able to do things with the dollar that influenced their ability to access it, to demand things of financial institutions.”

Like Al Qaeda, other Islamist militant groups have wrestled with how to avoid the reach of the Treasury and international blacklists. Their wealth management strategies have varied, and some have proved more adept at making money than investing it.
Continue reading the main story
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The Islamic State, for instance, has become perhaps the wealthiest militant group in history by wringing cash from the people it rules, looting bank vaults and smuggling oil. Yet its success appears to have left it vulnerable: It has taken in so much money that it has had to resort to physically stockpiling cash in warehouses, 10 of which have been struck by American warplanes since the summer.

The Haqqani network, a Taliban faction that is especially close to Al Qaeda, is believed to have poured money into real estate in Afghanistan, Pakistan and the United Arab Emirates. A European official, who spoke on the condition of anonymity to discuss intelligence, said the Haqqanis are believed to have been hit hard by the real estate crash in Dubai, United Arab Emirates, a few years ago.

Still, despite the occasional bursting bubble, real estate appears to have been a relatively safe investment, particularly in South Asia, where there is little regulation.
Document
Osama bin Laden Orders an Investment in Gold

In a letter to Al Qaeda's general manager, declassified by the Central Intelligence Agency, Osama bin Laden discussed what to do with a ransom that had been paid for an Afghan diplomat that it had held captive.
OPEN Document

“You can show up with a suitcase full of cash and buy a house,” said Gretchen Peters, who runs the Satao Project, a consulting firm that focuses on organized crime and terrorism. “It’s not like there is an I.R.S. money-laundering unit that’s going to come for you.”

At the time Bin Laden wrote the letter to his general manager, the two had been discussing the $5 million ransom, which was paid by the office of President Hamid Karzai of Afghanistan to free an Afghan diplomat that Al Qaeda had been holding. Unknown to the Qaeda bosses, about a fifth of the ransom was inadvertently provided by the C.I.A., which bankrolled a secret fund for the Afghan leader with monthly cash deliveries to the presidential palace in Kabul.

Al Qaeda had the money in hand by the time Bin Laden sat down to write his general manager in December 2010. Bin Laden clearly wanted nothing to do with United States dollars, which many Islamist militants fear could expose them to the long reach of American justice.

“As for the ransom money for the Afghan prisoner, I think you should use one-third of the money to buy gold and another third to buy euros,” he wrote.

The remainder, Bin Laden said, should be used to buy Kuwaiti dinars and Chinese renminbi, also known as yuan, with about a third kept in local currencies to cover day-to-day expenses. “When you do spend this money, use the euros first, then the dinars, the yuan, and then the gold,” he wrote.

Bin Laden had specific instructions for how to acquire the gold. It should be bought in coins or bars, which he referred to as “10 tolas,” a common denomination for gold bars in South Asia. Coins “are minted in several countries,” he wrote, naming Switzerland, South Africa and the United Arab Emirates.

But Bin Laden was nothing if not paranoid by then — at one point, he feared that an Iranian dentist had implanted a tracking device in one of his wife’s teeth — and he stressed in the letter that “the broker you deal with should be trustworthy.”

He also suggested buying a small amount of gold and reselling it to make sure the broker was honest.

Bin Laden appears to have believed that done right, investing in gold was nearly a sure thing.

“Right now it is $1,390 an ounce, but before the events in New York and Washington it was $280 an ounce,” he wrote.

He added, “If the price of gold reaches $1,500 or a little over before you get this message, it’s still all right to buy it.”

If Al Qaeda bought gold when Bin Laden advised, it was a bad bet. The day his letter was dated, Dec. 3, 2010, gold closed at $1,414.08 an ounce. Today, the price is hovering around $1,230 an ounce.