Far from coming to an end the Ukraine crisis could be far from over and as the West and Russia are embroiled in accusation and counter-accusation over the downing of Malaysia Airlines Flight MH17, the potential for escalation is perhaps getting more serious by the day.  It has brought a safe-haven focus back into the gold market which is probably likely to remain given Ukraine is not the only major flashpoint of worry with Syrian, Iraqi and Israeli/Gaza (Hamas) conflicts all raging and building up deep-rooted concerns and polarisation amongst those affected.  Violence may well not offer solutions to these deep-seated problems but can only intensify hatreds amongst those innocents affected.

And it is difficult nowadays to know who or what to trust in terms of media reporting.  We in the West are programmed to believe the spin put on things by the majority of our media, despite that this version of events is in turn spun to the media by the various governments involved.  Meanwhile in Russia, and Russian-leaning countries the populations are being fed completely different interpretations of what is going on.  Most of us in the West don’t trust or believe anything which comes out of Russia, assuming it just to be propaganda, while in Russia, no doubt, the reverse is true – and there are few media outlets nowadays which can be relied upon to give a totally impartial view on major geopolitical events (and that includes supposedly trusted sources like the UK’s BBC).  The much maligned (in the U.S.) Al Jazeera news organisation may be the best place to turn nowadays for perhaps more impartial coverage of Ukrainian geopolitics, although it perhaps may not be the best for impartial coverage of Middle Eastern conflict!

What we are seeing at the moment is a concerted effort by Western governments to put the blame for the whole Ukraine crisis, including the shooting down of MH17, at the feet of the Russian bear.  True the most logical explanation for the downing of the Malaysian airlines flight would be that it was brought down by the Eastern Ukrainian separatists (probably in a serious error of judgement by a Bok missile launch operator if they did indeed have such a weapon), but it is not the only theory out there while there seems to be little logic in either the Ukrainian government forces or the Russians for doing so unless there is some much deeper game to play which most rational people would just not understand or contemplate.  But nowadays logic sometimes is difficult to be brought to bear on all kinds of events.

Be this all as it may, the potential escalation now is getting to the stage that even more serious conflict may materialise.  The West is escalating sanctions against Russia and it may shortly get to the stage where President Putin – who has a serious ‘strong man’ image to maintain in his own country – feels he thus has nothing to lose anyway should he take things a step forward and offer overt support to the Ukrainian rebels, rather than the assumed, but unproven, covert support which is currently believed to be the case in the West.  Again logic suggests that Russia is indeed helping the separatist rebels (or terrorists as the Ukrainian government is predisposed to call them), but can we always believe the media reports which present this?  Could the Russian version of events and the conflict actually be just as reliable as the Western one?

Whatever one feels about the veracity of the news we are constantly being fed by the media, we are also seeing an escalation in rhetoric suggesting an enormous souring of relations between Russia, the CIS and the West.  Sanctions and counter sanctions would lead to a de facto resumption of the Cold War which, with the fragile economic situation prevailing in both the West and the East is fraught with serious financial dangers.   While the West has been seeing no problem in exporting Western-style democracy to Eastern Europe and the parallel advancement of NATO forces eastwards as a result, the Russians see this as an enormous military and political threat and Ukraine perhaps was seen as the last bastion of defence against this, hence perhaps the massive potential confrontation now looming. 

Look at things from the Russian point of view for a moment.  Think Castro’s Cuba and the near descent into nuclear war that materialised when the Communists came to power there.  Russia’s President Khruschev was faced down by President Kennedy then.  But now Ukraine is akin to Russia’s Cuba – the enemy at the gates.  Who will blink first here?  Putin or Obama?  One suspects the former has more to lose if he wavers in his determination.

It is thus perhaps a wonder that gold, as the safe haven of choice, is not flying far and away higher than it is at the moment and the logic here is that it is indeed being held down by a bullion banking sector which could find itself in serious default if the gold price ran sky-high.  And if some of the analysts on the bullish side of the gold equation are correct in their assumptions that many Western central banks (with the approval of their governments whether they are deemed independent or not) have leased out much of their gold reserves, and that the banks to which they have leased them are in no position to return the bullion, then the proverbial could well be set to hit the fan as banks default in their commitments – should government allow that to happen!

This observer is thus more and more being drawn to the possibility of a big gold price escalation looming sooner rather than later, as opposed to the $1,050 year-end call being reiterated by the perhaps exposed banks like Goldman Sachs.  But this viewpoint is very much one’s own interpretation of what is going on in global geopolitics which itself is reliant on attempts to interpret the various media spin coming from  both sides and, as can be seen from the above commentary, this is no easy thing to do.  Who can one really believe in this day and age of political spin?