It is said that when the fighters of the Islamic State of Iraq and the Levant entered Mosul they robbed the banks first. Then they proceeded to take over every oil field that they could. Now that they are in charge reports tell us that the fighters of the Islamic State are angry young men from various parts of the Muslim world. They have none of the skills needed to govern or even keep the lights on or even manufacture toilet paper. So they have had to tolerate technicians to run the city of Mosul as they execute or expel non-believers. The point of this for those interested in history and foreign currency exchange rates is that you need money to pay an army and maintain control of your conquests. That is why the Islamic State went after the banks and then the oil fields. The angry young men are another issue. They are True Believers in a unique sense.
Eric Hoffer and the True Believer
Eric Hoffer was a longshoreman who worked up and down the California coast during the Great Depression. He only learned to read and right properly in his 40’s. However, he was a very bright and observant man who proceeded to write several books. The best known is entitled The True Believer. This book was Hoffer’s analysis of mass movements such as Communism, National Socialism and early Christianity (Lenin/Stalin, Hitler, Jesus of Nazareth). He called the young men who were attracted to these movements, true believers. He described them as believing that their lives had been spoiled and being susceptible to the arguments of persuasive men like Adoph Hitler. Joining a mass movement such as the Nazi party (or Communism or early Christianity) gave these men a sense of identity and purpose. It made little difference which movement they joined so long as they had a task and a sense of purpose. Hitler said, in fact, that his best source of recruits for the National Socialist Party was the pool of men who were Young Communists. Although the two groups espoused opposite views of how the world should work the dynamic of being a member was the same for each, unflinching loyalty and acceptance of all orders given. Now fast forward sixty years (or two thousand) and we see the true believer of the Islamic world attracted to the Islamic State of Iraq and the Levant even though their tasks include robbing banks, taking control of oil fields and executing innocent people. But, what does this have to do with Forex strategies for the Forex trader? The point is that the conquests cannot go on forever and someone needs to pick up the pieces and make sure that the lights stay on.
Later Phases of Mass Movements
There was no Christian church in the beginning but people with like beliefs eventually organized and the bureaucrats largely took over. Likewise, Lenin died and so did Stalin and then the managerial class of the Russian empire ran the show. The same will happen with the Islamic State. In the end the bureaucrats and technicians will run things. If these folks are successful they will need a currency and need to trade with the rest of the world. They will need people experienced in trading currencies and trading their new Islamic State currency will provide profits for those who analyze and trade wisely. In the meantime anyone in nearby countries should think seriously about safe haven currencies until things settle down.