Land of Promise (20 page)

Chapter 18: Au and Ag

“We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.”
-- Daniel Webster, Speech in the U.S. Senate, 1833

Solus Christus, The Ilemi Republic -- April, Four Years After Declaration of the Caliphate

Having a silver coin as the nation’s circulating currency matched the libertarian ideals of most Ilemis, both native-born and newcomer. While NEuros and Bitcoin were widely used for the first year of independence, eventually the Ilemi Silmo and Centime predominated for all local day-to-day transactions and most banking. Using Silmos sheltered Ilemis from the ravages of NEuro inflation, which by the late 2040s was averaging 7% per year, a rate which had been even higher before the Ebola DRC pandemic.

Pacific Mint initially handled coin production for the Ilemi Republic in the United States at their facility in Nevada. But later, the company set up a mint operation in Solus Christus, where they produced Ilemi Republic Centime, Silmo, Gilmo, and Pilmo coins. Soon after this mint proved to be a profitable operation, it was bought out by Harry Heston for an undisclosed sum and renamed Heston Mint.

The Silmo (Silver Ilemi Monetary Ounce) had the same diameter as a one-ounce U.S. Silver Eagle (40.6 mm), but it was thicker; it had an extra one-tenth ounce of antimony hardener added, giving it a total weight of 1.1 ounces. The design of the Silmo featured an elephant on the obverse side. The fractional versions (1/2 ounce, 1/4 ounce, and 1/10 ounce) had more simple designs with prominent fractional markings (such as “.25 Ounce, Silver”) with reverse-side designs featuring the oryx, zebra, and eland.

Similarly, the Gilmo (Gold Ilemi Monetary Ounce) had the same dimensions and hardened composition as a South African Krugerrand. The design of the Gilmo featured a Cape buffalo on the obverse side. The fractional versions (1/2 ounce, 1/4 ounce, and 1/10 ounce) had more simple designs with prominent fractional markings (such as “.25 Ounce, Gold”) and reverse designs featuring a reedbuck, sable, and waterbuck.

Platinum Pilmo (Platinum Ilemi Monetary Ounce) had exactly the same dimensions as the one-ounce U.S. Platinum Liberty. Because it was not intended to circulate and because it was anticipated that some coins might eventually be melted for industrial use, it was made of .999-fine platinum, with no hardener added. The Pilmo featured the profile of a lion on the obverse side. There were also fractional versions (1/2 ounce, 1/4 ounce, and 1/10 ounce.

The trading ratios between Silmos, Gilmos, and Pilmos were not artificially pegged by the Ilemi government. Instead, daily trade ratios between the three metals were based on the global spot markets, the ratios were posted at the Heston Mint websites. It would have been foolish to peg a ratio, because the price ratio of silver to gold had gradually fallen for the preceding three decades. In 2015, the price ratio averaged 75-to-1, but because large quantities of silver were not recovered from industrial use, by the late 2040s the price ratio had fallen to 22-to-1. Except in circumstances where space and weight were at a premium, silver was generally preferred over gold by investors, who anticipated that before the year 2100, the silver-to-gold ratio would eventually slip to around 16-to-1.

The Ilemi Centimes were unusual: They were not original coins. Instead, they were re-minted from existing U.S. nickel five-cent coins. Centime coins were used for small daily shopping transactions and to make change for Silmo coin transactions. One hundred Centimes equaled 1/10th ounce of silver, and 1,000 Centimes could be exchanged for a full one-ounce Silmo. To eliminate hand sorting, automated sorting and re-minting machines based on Harry Heston’s specifications were eventually ordered from Belgium and installed at Heston’s vault storage company and at the Tulloch Field passenger terminal in the Arrivals Area.

Arriving passengers could dump loose nickels into a hopper. A rotating disc sorter with a magnetometer then automatically divided the coins into two bins equipped with digital counters. These two bins were marked
Genuine Cupronickel Nickels
and
Hand Sort
. The Hand Sort bin caught oddities such as Canadian nickels, other foreign coins, and even a few 1942- to 1945-mint date U.S. War nickels. These last were highly prized, because instead of being the common 25% nickel and 75% copper, they were composed of 35% silver, 56% copper, and 9% manganese.

The bins of sorted standard U.S. nickels (75% copper and 25% nickel) could then be dumped into another hopper atop the larger half of the combination machine — the automatic reminting press. This seven-ton press re-impressed the surface of the coins into Ilemi Centimes, with hardened dies. The standard exchange ratio of nickels to Centimes was one-for-one.

The Centime coin design featured the head of a dik-dik, the smallest member of the antelope family in the region, with
Ilemi Republic
on the obverse side and “ONE CENTIME” on the reverse side. The machine spat out completed Centimes in rapid fire, at a rate of about one per second. Watching this machine work was particularly fascinating to children.

Once word of the “Nickels for Centimes” exchange machine got out, both immigrants and tourists brought rolls and sacks of U.S. nickels. The exchange was a good deal, since U.S. nickels were no longer legal tender, and the exchange netted customers Silmo silver coins at just under the spot price of silver. The exchange law allowed some flexibility for the minter, in the event that prices of copper and nickel ever diverged too far from their traditional ratios to the price of silver. If that were to happen, the minter could charge a seignorage offset fee and the customer would then receive less than 100 Centimes for each 100 Nickels submitted for re-minting.

The Ilemi Constitution mandated a 100% reserve requirement for all silver, gold, and platinum bank deposits. The only proviso was that, were there a banking or credit crisis, banks could at their discretion repay customer withdrawals in silver or gold in
any
coin or bar form, not just Ilemi Silmos with a hardener.

Harry Heston made good on his promise to establish a mint and a vault storage company. But then he went a step further and built a walk-in banking facility in Solus Christus called Heston Bank. It was unlike banks in other countries. This was a traditional warehouse bank in the 19
^th
century tradition. His bank had teller windows like other banks, but his tellers only minimally handled paper currency, credit card, and e-banking transactions. Instead of creating money out of thin air and “banking” electronic digits, every deposit at the Heston Bank involved physical precious metals with a one-to-one exchange. Deposits had to be in Ilemi precious metals coins, commonly recognized bullion equivalent coins, or bullion bars. This meant that anyone bringing deposits of electronic or paper currency from other nations converted their currency and bought Ilemi Silmos, Gilmos, or Pilmos for deposit. Withdrawals were in “like kind.” Conversions from various forms of bullion into Ilemi coinage were made for a small fee.

Heston’s style of banking was in direct contradiction to the fraudulent fractional reserve banking practices in most other countries. The Heston Bank paid no interest, but instead
charged
its customers an annual vault storage fee to provide bonded and very secure true banking. And because Heston Bank had one-to-one storage and exchange, it pledged that would not ever
loan
money, at interest. Much to Heston’s amusement, this policy was criticized by American and European bankers, but was quietly praised by bankers in Islamic nations, where charging interest was banned. Reading a critique of his bank in
The Economist
prompted Heston to write an editorial for
The Ilemi Daily
blog. In this piece,
Debt Slavers Revile Genuine Warehouse Banking
, Harry Heston wrote:

Taking in electronic currency and handing out specie meant that Heston Bank was constantly shuttling precious metals into the country. Most of this was done with a Gulfstream 750 flying to and from Johannesburg, South Africa’s banking center. All of the nation’s Big Four banks -- Standard Bank of South Africa, Nedbank, FirstRand Bank (doing business as First National Bank, and most commonly known by the initials FNB), and Absa Bank (the operating name of Barclay’s Africa Group Limited) refused to do business with Heston Bank. This was ostensibly because Heston refused to divulge information about their customers, but the larger issue was that they did not want to jeopardize their banking relationships with the Islamic world. These were valuable customers, including many wealthy Thirdists who liked banking in South Africa because their deposits there were low profile and earned interest (“
riba
”), contrary to Sharia law. The Big Four banks also all had strong internationalist ties, and in some cases the majority of their stock was held by foreign parent banks. But the Ilemis did have a good instrument and currency-clearing relationship with Capitec Bank, which was locally chartered and unfettered by foreign ties. Capitec had a reputation as a truly independent bank since gaining notoriety as the banker for the African National Congress Party before Apartheid was dismantled.

South African banks were also bound by a national cash reporting law, but it was weak, with exemptions for Sovereign States. The Heston Bank just barely qualified for the sovereign bank exemption as the sole banking institution associated with the Ilemi Republic government.

By the time the new nation celebrated its first anniversary of independence, there were 18 Pilatus Moths in the country, all purchased with funds provided by Harry Heston’s Isher Trading Company. Twelve of these were eventually re-purchased by individual Ilemi citizens. Three other Moths were purchased by the Ilemi government for use by the IRDF Cadre. The other three sat cocooned in the spacious Isher Trading Company warehouse.

Most of the Pilatus Moths came from brokers in Europe. Just two came directly from the Pilatus company. These were trade-in planes from New Zealand, after that nation decided to switch to Moth UAVs.

Only one Ilemi Moth bought in the first year was a UAV variant. Almost immediately after arriving in the Republic, modifications to the Moths began. Except for that windowless UAV variant, the Moths were fitted with camouflage sectional RAM window covers that were locally fabricated. These could be attached with Velcro either inside or outside the Moth’s bulbous canopies. When used outside, these granted the Moths better camouflage from ground or air observation when the planes were tied down outside the hangar. And when parts of these covers were used inside, they reduced the planes’ RCS to grant improved stealth capability, albeit with reduced visibility for the pilot and co-pilot.

Several Moths were retrofitted with retractable 30mm chin turrets. These Rheinmetall RMK30 turrets were surplussed by the German government once they were dropped from the Eurocopter Tiger attack helicopter program. The turrets were an excellent design, but a political decision was made to standardize with a French-built 30mm cannon. Somehow, 27 of the used turrets ended up in the hands of a Tunisian arms broker. After a tip from Rick Akins, Harry Heston bought all of them, speculating that they would have good resale value. As usual, Harry wasn’t wrong.