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The improved diplomatic relationship lasted until the recent flare-up of territorial and other bilateral disputes.
Never mind that the central bank is not responsible for Russia's troubles - the run on the ruble, the recession, and the flare-up of inflation - and that using interest rates to prevent capital outflows always fails.
But if a major flare-up causes investors to lose confidence in low volatility, the bottom could fall out from under equity and housing prices.
Bahrain remains a flashpoint; Iraq is deeply unstable; and the simmering conflict between Iran and Israel could flare up at any time.
The current flare-up is largely due to the fact that Fatah, encouraged by the international community's boycott of Hamas, never really accepted its electoral defeat and Hamas's right to govern.
The complexities of the threats to Israel are such that a possible confrontation with Hamas in Gaza might trigger a flare-up with Hezbollah in Lebanon.
Pre-existing tensions have inevitably played a large part in the current flare-up.
Whenever troops from either side build roads, construct or repair bunkers and other fortifications, or conduct patrols close to the LAC, tensions can flare.
He would also retain the current Marine Corps presence as a tripwire for US military intervention in the case of a flare-up across the Taiwan Strait, whereas Guam is beyond the effective range of Chinese ballistic missiles.
Add to this the perennial crisis on the Korean peninsula and the Taiwan conflict, which could flare up again anytime.
But Hamas's brinkmanship is a dangerous exercise, for a low-intensity conflict can easily degenerate into an all-out flare-up if its rockets cause a politically unbearable number of casualties on the Israeli side.
President Mohamed Morsi's government cannot be uninterested in periodic flare-ups in Gaza, which serve only to destabilize Egypt.

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