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December 01, 2003
Thought Exercise: Iraqi Cash

US troops this weekend killed upwards of 50 Iraqi terrorists while successfully repelling a pair of ambushes.

Why were the Iraqi "militants" (to use a term much-beloved by the media) willing to commit such a large group to an attack against a well-armed convoy? Some news reports suggest that the Iraqis had no idea what they were getting themselves into. That's fine by me -- fair fights are for the boxing ring.

A number of reports have it that the convoy was carrying large amounts of the new Iraqi currency, to be distributed to banks, etc..., for exchange with the old bills that feature Saddam's portrait.

Let us, for the moment, assume these reports to be correct, if for no other reason than to allow me to suggest some possibilities and make some conjectures.

Were these ambushes merely glorified stagecoach holdups?

I think there's more to it than that. I think if the terrorists don't get their hands on a huge pile of the New Iraqi Dinars, their operations will end. They need that cash.

If Saddam and his henchmen are coordinating the enemy forces, numbered Swiss bank accounts simply won't do -- they require large amounts of cold hard cash. Undoubtedly, they have rather large stockpiles of the old currency -- it's not as though Saddam can head to the nearest ATM every time he has to pay a terrorist for an attack, or when he needs to pay off a French camera crew. [tongue only slightly in cheek - Russ]

But as the new currency goes into circulation, there is a deadline for exchanging the old, 15 January 2004, after which the "Saddam currency" will be nothing more than scraps of paper suitable for any number of non-fiscal uses [use your imagination]. In short, it will be as worthless as Confederate dollars were after the surrender at Appomattox Courthouse.

Current supplies of cash are all Saddam and his cronies will have on hand, with no practical way to acquire the sheer volumes of the new cash necessary to conduct operations as they have been conducted up to this point. Anyone attempting to circulate the old currency after the changeover will be suspect, and anyone attempting to exchange huge amounts of the old bills for the new before any notional deadline will be suspect.

Yes, Saddam could use "mules" with smaller amounts of cash to do the job, the same way drug traffickers do here in the States to try to get around the cash transaction laws (you did know we have those laws, right?), but let's say each such mule carries 150,000 dinars (about $1,000) to the exchange point. That means hundreds of mules might be required.

Additionally, I think there are likely to be few Iraqis with substantial amounts of legitimately-acquired cash -- making the mules stand out all the more from the crowd. With luck, these mules will lead our forces back to Saddam or his henchmen.

A more likely benefit will be that, with the cash to pay as bounties to the terrorists drying up, the pool of "volunteers" will begin to shrink, leaving only the diehards [now there's a loaded term] willing to take the risks inherent in attacking US & coalition forces.

Some variables I haven't considered but which require additional thought: U.S. forces recovered vast amounts of U.S. currency stockpiled in Iraq. Could Saddam be paying his fedayeen in U.S. Dollars? What if the payments are being made in Saudi Riyals?

Could be worth thinking about....

Posted by Russ at 08:40 PM, December 1, 2003 in Nat'l Security

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