Ukraine could be like the Russian invasion of Afghanistan with gold and oil prices rocketing and stocks falling
By Peter Cooper
GoldSeek.com
Monday, 3 March 2014
Geopolitical risk premium in global financial markets is definitely on the rise this morning as investors digest the likely impact of what amounts to an invasion of the Ukraine by Russian troops over the weekend with an estimated 6,000 of them now stationed in Crimea in response to the overthrow of the Russian-backed president by an angry mob in Kiev.
Russian Prime Minister Dmitriy Medvedev said: ‘Ukraine for us is not a group of people who, pouring blood on the Maidan (Kiev’s main square), seized power in violation of the constitution and other state laws. Russia needs a strong and stable Ukraine. A predictable and economically thriving partner. Not a poor relation that’s always standing with a hand held out.’
1980 parallel
The G8 meeting of heads of state in Sochi has been effectively cancelled and the Russian military action condemned by all of these countries. Russia is every bit as isolated as it was in late December 1979 when it invaded Afghanistan and the Moscow Olympics the next year were a disaster. The UK has just pulled out of the Sochi Paralympics.
It was also in 1980 that the great bull markets in gold and oil of the 1970s reached their peak. Ominously today Brent Crude is above $110-a-barrel and gold surged to $1,344 an ounce as its strong rebound from last year’s sell-off gathered pace. Asian stock markets were mainly lower.
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