Given the risks, you might expect the ever-more apocalyptic warnings of World War III, now almost daily trotted out by the politicians and the military, to be more obviously reflected in the behaviour of financial markets.

Even comparatively localised wars tend to be deeply damaging to the economies involved, though there are exceptions which I’ll come to.

But world wars are on another scale entirely – hugely destructive events which take decades to recover from. If fought in the modern age, with its lethal nuclear arsenals, such a war might even prove fatal to the human race.

Republican presidential candidate Donald Trump’s warnings of World War III don’t seem to faze investors.Credit: AP

Yet markets appear entirely blind to any such threat. A deep insouciance hangs over their every uptick. Donald Trump’s warnings of World War III are dismissed as little more than cynical electioneering; growing geopolitical instability is all Joe Biden’s fault and the only salvation is me, he keeps unconvincingly saying.

Similarly with the siren calls of the military for urgent increases in defence spending. What do you expect from armed forces starved close to death, with the so-called “peace dividend” diverted into burgeoning welfare budgets? They sense their moment, and are understandably going for it.

Whether the world is objectively any more dangerous today than it was two years ago when Vladimir Putin first invaded Ukraine is an interesting question. Markets plainly think not.

What Ukraine has demonstrated is that it is possible to have localised wars, even when they involve nuclear superpowers, without resorting to the mutually assured destruction of firing off a nuclear missile. And be in no doubt that the West is in effect already at war with Russia. One of the reasons the UK military is demanding more defence spending is that so much weaponry has been diverted to the defence of Ukraine that it has left Britain short of even basic needs.

But if nuclear weapons have failed to act as a deterrent to military action by an insecure authoritarian regime, they probably have been reasonably effective in limiting the scale of the aggression.