“A few years ago I taught Angus Roxburgh's son and met Angus. He is a very calm and measured person. He has decades of experience of Russia, having lived there and being able to speak the language. If Angus is concerned about the level of hysteria in Russia, we should take this very seriously.  Throughout this crisis I have been haunted by the similarities with the situation 100 years ago - 1914 - in the run up to the First World War. I hope that we will not come to an armed conflict this time but neither do I believe that diplomacy will solve the problem. This is beginning to look like a "Black Swan" moment.  It is clear that sanctions will be applied to Russia next week. There is great danger of a "loss of face" situation developing on both sides. This situation could deteriorate seriously if trouble breaks out in eastern Ukraine, beyond the confines of Crimea. If that occurs, I think that Putin will now feel that he has to intervene there as well.

“I do not like the way that this is developing. Europe needs Russian energy and Russia needs European revenues. In spite of that fact, a serious economic conflict could still deteriorate into some form of armed conflict, via third parties. That could be the West arming Ukrainian military forces.

“All the "experts" were predicting two weeks ago that Putin would not resort to force. They were all wrong.

“In investment terms I wonder whether gold is not a short term gamble??”

David Fuller's view

Thanks for an interesting email.  Anyone with a reasonable sense of history would be concerned by the current situation.  I think Angus Roxburgh is right in describing Putin as a paranoid and therefore also insecure person.  Moreover, obsessed with building his fledgling and strangely named Eurasian Customs Union - an effort to re-establish a version of the Soviet Union - suggests to me that he is living in the past.  If so, he will not necessarily think the way that either we or most of the business/market oriented Russians do.  This makes him less predictable and we know he can be dangerous. 

Re gold (weekly & daily) I agree and view it as a hedge against uncertainty.  It is short-term overbought and had a downside key day reversal today but should be worth purchasing on setbacks, assuming it remains above $1200 as I think it will.  Personally, I have recently bought silver (weekly & daily) for this reason, as you probably know. However, it is underperforming gold at present.