Geopolitical risk took center stage last week when Russia announced it would annex the Ukrainian territory it has seized—after holding "referendums," of course, in those areas. Any attack on what would now become Russian territory would be met by all means necessary including nuclear weapons. Presaging this development, I wrote the following in a piece from March entitled, "World War III is here, but it's not what we expected":
[I]f Russia ultimately feels backed into a corner, the Russian leadership may see no alternative but to draw its main competitors into a wider war with the hope of instilling enough fear of a nuclear confrontation that both sides relent and a political settlement and security guarantees follow that include an agreement to end all economic warfare.
It is in just such circumstances that both sides may miscalculate or may misconstrue the words of the other and choose to escalate the conflict in a way that will make prophets out of all the screenwriters and novelists who depicted World War III as the end of civilization.
It seems "such circumstances" have arrived and both sides are choosing escalation. I am not predicting "the end of civilization." But I'm more worried than I was a week ago.