War risk is consistently underestimated by money people. Yes, investors now understand that pandemics can happen and disrupt business and holiday travel.

Somehow, though, Wall Street, the City of London and their counterparts appear to believe that once vaccines are distributed to most of the developed world’s population, the problem ends. The 1990s assumptions of peace and free financial flows will work once again.

They are wrong, unfortunately. That is not peaceful clicking you hear out there, that is the sound of reloading. The pandemic encouraged governments to believe the wartime-model production of testing kits and vaccines created a great precedent for state-directed investment and state-restricted trade.

But state-directed economies become war economies, and war economies tend to move on to use their products. Before the wars, typically, capital controls are imposed, and most global investors are not taking that probability into account.

They think that currencies will always be hedge-able, tradeable, and portable as they more or less have been since the 1980s. No. I believe the coming generation of policymakers want to demote the financial class, and one of their methods will be the imposition of controls on capital flows. Even in the US.

Most people, including me, think of the Biden administration as a moderate government. Yet the president’s policy speech about economic revival held up the Roosevelt administration’s “Arsenal of Democracy” recapitalisation programme as a model. The new US president imposed the requirements of the WWII Defense Production Act on vaccine and medical supplies makers.

He talked of creating more “stockpiles”, as the Department of Defense held from before WWII until the early Nineties. Trusting foreigners and markets — no! The lack of trust in foreigners and markets is now more subtle but more direct than Donald Trump’s crude, open belligerence and anti-multilateralism.

Maybe Mr Biden and those who wrote that language for him have a point. Periods of big wars are preceded by domestic instability and smaller international wars. People with money have paid little notice to the interconnected wars across northern Africa, from Western Sahara to the growing conflict between Egypt and Ethiopia. Not to mention the Azerbaijan-Armenia war.

The latter conflict in particular has been closely watched by international militaries as a testing ground for the use of drones in conventional war, much as the Spanish civil war proved the utility of ground and air attacks co-ordinated by radio.

The most immediate financial and economic shock would probably come from an Israeli-UAE attack on Iran. This has been floated for so long that people are numb to the idea, but I think it is more likely than not. The Iranian leadership is more desperate, and Israel is far more independent of any restraining US opinion.

The US Navy had gone through war games for a Japanese attack on Pearl Harbor for a decade and a half before it happened. Yet in the event the commanders were surprised. The all-time low in US equity markets was reached six months later.

On a slightly longer timescale than the Iran conflict threat is the Chinese national commitment to incorporating Taiwan. Business and financial people (including those in China itself) apply rational commercial calculation to conclude that a hostile Chinese blockade of the island, never mind an outright attempt at a military takeover, would be economically wasteful and unnecessary.

But in the classical analysis of the causes for war, fear and honour come before interest. The Americans say they must have strategic supremacy in semiconductor chips. How can they have that without Taiwan, the Ruhr of the electronic age? And in China’s conception, reunification with Taiwan is a generational imperative, you could say a matter of honour.

The market volatility caused by sudden conflict in an over leveraged world would lead to the mother of all un-meet-able margin calls by the financial clearing houses (CCPs) that were supposed to solve the problems of the last global financial crisis. The US, UK and other governments would bail out the CCPs — once — and then, I believe, impose international capital controls.

So it makes geopolitical sense, if not necessarily financial-model sense, for large asset managers to more closely match assets and liabilities by country or currency area. Free international capital flows, and associated financial hedges, have become politically fragile.

War comes faster than you expect and costs more freedom than you thought possible.