The Islamic State meets the laws of economics

The solution chosen by the caliphate is to turn to the gold Dinar that has as much symbolic value as is does as a means of financing the society. While gold speaks of wealth and security in the minds of most people, there is a hazard in adopting a gold currency. The value of the gold coins comes from the quality of gold metal and not from the quality of the issuer. Anyone doubting the longevity of the caliphate will be inclined to horde the coins under a rock somewhere or smuggle the coins outside. The loss of money from the economy will translate into an overall deflation as the scarcity of money raises its value; and that is likely to depress the economy even further.

Return of the Gold Dinar is a declaration of economic warfare upon the United States for reneging upon its pledge to preserve the gold standard and imposing the dollar standard upon the world. The caliphate assures its believers that it will exact its revenge by breaking the dollar and by bringing back the use of gold to finance world commerce.

Egyptian Finance Minister Fayyad Abdel Money, a former professor of economics, points out that there is not enough gold in the world to finance the more than 75 trillion dollar global economy. The U.S. represents a quarter of the total, a power somewhat beyond that of the caliphate.

After all of its talk about the mystical powers of gold, it is their own economy that is a serious weakness in the survival of the caliphate. The caliphate is consuming itself and needs a fresh infusion of wealth.

That means acquiring a commodity that can be marketed outside of the caliphate. The caliphate is targeting for that purpose opium from Afghanistan that produces 90 percent of the world supply and has the extra advantage of being the largest grower of cannabis. It is focusing on The Badakhshan Province which saw a 77 percent increase in opium production during 2014 and has a minor Taliban presence. The mountainous province extends into Pakistan, Tajikistan and the Xinjiang Province of China. The Russian Federal Drug Control Service estimates that the opium trade is worth a billion dollars.

The move of the Islamic State into Afghanistan is bringing it into conflict with the Taliban that also relies upon opium as a source of revenue. As the Islamic State forces strengthen in the North, it is likely to spread deeper into the Taliban's tterritory as both organizations battle to control the illegal drug trade in a Poppy War.