Investors rarely factor God into their calculation. However, in the years ahead, He is likely to figure prominently in economics, politics andmoney – so we had better get used to Him again.

One of the starkest differences in global affairs between the 21st century and the previous one is the return of God to the centre of the political arena. As a result, even the most atheistic investor has to take into account the Almighty and especially His flock,when formulating strategy and tactics. This is a newball game for almost all investors, from the largest institutions to the humblest households because, for a long time, religionwas not a relevant factor in financial markets.The 20th century produced a broad selection of ideologies, but the big and successful ones were the secular ones: fascism and Nazism (in their brief but disastrous heyday), communism (which lasted longer, but ultimately collapsed) and liberal capitalism,which is currently running the show.

Whatever their respective strengths and weaknesses, these were all rational, in the sense that they recognised the existence of geopolitical and economic interests – their own and those of their enemies. Hitler, for example, invaded Poland in 1939 and Russia in 1941 on the basis of calculated risks, which turned out to be wrong but were, nonetheless, rational.

Faith and religious belief were not part of the calculations of these secular ideologies. The irrelevance of religion in the face of this onslaught of secularism was encapsulated in Stalin’s dismissal of possible opposition to his policies on the part of the Vatican: �We all know how many divisions the Pope has.� In this, Stalin – and the entire Soviet system – proved to be completely wrong. The Pope’s �divisions’�, including a Polish cardinal who himself went on to become Pope, outlasted and eventually expunged the Soviets from Poland; even theRussian Orthodox church survived the Communists, although in rather poor shape.

The Western media, themselves bastions of secular liberalism, have been equally guilty of failing to understand the forces at work beneath the surface of world affairs. Thus, whilst they sought to play up the role of Polish Catholics in hastening the demise of the USSR, they missed the critical contribution of a ragtag guerrilla army in Afghanistan in exposing the advanced decay of the Soviet behemoth. The Afghan resistance to the Soviet invasion, which attracted support fromall over theMuslim world, became the launch pad for a new phenomenon – soon to be labelled by that same media as �Islamic fundamentalism’�. But this continued to be regarded as something exotic and remote until some of the newmovements’ adherents hit New York and Washington on September 11, 2001.

This pivotal event effectively ushered in the 21st century by underlining that God and his various believers were back in full strength, after an enforced leave of absence from the global spotlight. The focal point of this return of religion is an updated version of that golden oldie of historical wars of religion, a Christian Muslim conflict called a crusade or a jihad, depending which side you’re on. If, however, you are determinedly secular, you can just label it a �clash of civilisations’� and if even that is too aggressive for you – as it is for many of us – then it is merely a campaign against terrorism or �militant groups’�.

Well meaning as most pacifists may be, we are objects of ridicule in the eyes of the true believers (�fanatics’�, to their enemies).This is especially so in the case of people like Osama bin Laden, who are imbued with a sense of divinely-prescribed mission – in his case, to recreate a single caliphate that unites the Muslim world, regains the Muslim lands taken by the infidels (including Spain, southern France and Italy, the Balkans, and of course Israel) and defeats, or at least neutralises, as many as possible of the enemies of Islam everywhere else.

The main debate among �Islamic fundamentalist” groups such as al-Qaeda – conducted quite openly, for instance via numerous internet sites – is whether the first target should be the corrupt Muslim regimes (especially Saudi Arabia and the other states on the Arabian peninsula), or the non-Muslim states (headed by the US and Israel).These are referred to, respectively, as �the near enemy’� and �the far enemy’�, and this debate is hardly academic as far as the outside world is concerned, least of all for investors. If terror strikes are planned for the UK and US, many people could die and serious political and economic consequences would follow. But if the main effort is concentrated on knocking over the ruling families in Saudi Arabia and Kuwait, the price of oil would soar towards $80 or even $100 a barrel and the Western economies would be sent reeling.

This is a crucial point because, unlike Stalin, or even Hitler, the bin Ladens of this world pay no heed to what secular people and governments regard as rational thought. This is especially the case if they don’t actually run any countries. However, the factor that makes today’s terrorist groups far more dangerous than their predecessors is the prospect of their obtaining weapons of mass destruction.

Yet for all its potential to wreak havoc, �Islamic fundamentalism” does not have a monopoly on representing God in this world. Indeed, from the European perspective, the attitude of the hardline elements of the Bush administration – and of its fundamentalist Christian supporters – is no less fanatical and, many would argue, no less potentially dangerous. Bush and his people seek to avoid the term, but there is little doubt that in their own minds they are engaged in a crusade, in the religious sense, to impose their (seemingly secular) values on the rest of the world, especially the Muslim parts of it. Many of the evangelical Christian sects in the US are active in aggressively promoting their beliefs among the �heathens’�, and their attitudes (but not their actions, fortunately) are no less fanatical than those of their Muslim counterparts.

Nor would it be fair to limit the discussion to Muslims and Christians. India’s recent governments have been aggressively Hindu and the simmering Hindu Muslim tensions that have always characterized the Indian sub-continent, even during the Raj, have, in recent years, been ratcheted up to nuclear levels. Ironically, this has had a calming influence on both sides, but the struggle between rational and irrational forces in both Pakistan and India, including in the governments and armed forces of both countries, is far from over.

This carry-on exists among Jews also. In Israel, there is a clear new brand of messianic fanaticism among some small groups. These may be marginal elements within Israeli society but, once again, intense commitment and total disregard for the consequences – in other words, the �mission fromGod’� syndrome, this time in Jewish garb – can help small numbers go a long way.

The bottom line: from NewYork to NewDelhi, anyone engaged in making decisions about money needs to recognise that times have changed radically. We know, thanks to recent economic research, that the old assumption that consumers and investors act rationally is not always true. But the really bad news is that even governments and countries cannot be relied upon to act in ways that the market considers rational. Leaders, and especially opposition figures may have their own agenda, which on further examination may turn out to be what they believe is God’s agenda.

In such cases, not only can you not argue with this kind of thinking, you can’t even understand it – unless you are prepared to factor God and his followers into your analysis.

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