Just 2 weeks ago, knowing there will be another round of US-South Korea military drill near North Korean waters, Kim Jong-Un, the Dictatorial Premier of North Korea gave a warning that he is going to react by sending a ballistic missile near Guam, a US territory. Despite of such threat, the military drill went on as scheduled started last Monday and lasted for 5 days. But the North Korea did not fire the ballistic missile near Guam water. Possibly Kim Jong-Un received a wiser deterrence advice that the US did the military drill on purpose to provoke his missile launch so that US would justify to invade North Korea.
Despite such geographical military tension, global stock markets, especially the US markets ignored such tension and continued to make new records last week. This is something investors really need to pay attention about. When the least expected event happens, it will be called the “Black Swan.”
When words of insult, humiliation and threat between two leaders from the US and North Korea have been escalating, many news articles and predictions have been written about a possible war break out. The extreme scenario would be a lead to a break out of Third World War if the two super military powers like China and Russian have been dragged into the involvement.
Third World War
No investor would like to see a Third World War break out. When this happens, world economy will be devastated. A recovery would then be enormous and messy. The presupposition of these 2 super powers being dragged in is because they don’t want to see the US expanding their control over territory influence near their borders using the means of South Korea unification purposes.
However, this view of seeing the existence of North Korea as a buffer state for China was objected as obsolete by a Chinese analyst. It was a buffer state in the past, but leadership of both countries have been handed down from generation to generation. Views, values and perspectives as well as foreign relationship has no longer been the same as before. The world major focus and interest in this post-cold war era have also changed drastically. Relationship between North Korea and China has even becoming distance lately due to the 2 assassinations of Kim Jung Un’s close relatives that were favored by China. Both Russian and China did join in the economic sanction against North Korea due to nuclear weapon development imposed by United Nations recently.
The development of nuclear weapon has not only posted threat to the US but also to the uncomfortable feeling to both China and Russia. For both of them, their worries increase because of the fear of triggering South Korea and Japan to their rationale to possess nuclear weapons themselves. These will endanger both China and Russia entering again in the arm race where they have been long laid down through the Non-Proliferation Treaty or NPT for the sake of pursuing economic advancement. Therefore, the chances of China and Russia entering the warfare in the Korea Peninsula if the battle ever breaks out are highly slim. Shall the Korea Peninsula warfare triggered, the major concern is the enormous civilian casualties.
High Civilian Casualties
Whatever strategy the US employs in the event of preemptive strike, there is no guarantee that North Korea wouldn’t able to retaliate by hitting US approximate allies, such as South Korea and Japan major cities with nuclear weapons. Shall this happened, global economy will also be badly affected as the third and 11th world largest economies will be paralyzed.
No one likes to see this Korea Peninsula entering warfare including the US, nor even North Korea. However, both of them are still racing to intercept each other. North Korea is aiming to have an upper hand in the negotiation table, vowing first to develop nuclear ballistic missile threat capable of reaching the East Coast of the US. Only then, North Korea will be willing to sit down and talk. While this seems improper for the US to let this happening, it is like humiliating first before talk. On the other hand, US would like to see the continual development of the nuclear weapon to stop immediately and unconditionally before any talk on peaceful dealing. This is also seen illogical, highly non sensible, least improper for the North Korea to swallow.
Trump mentioned he would not want to see “it” ( the continual development of nuclear weapon to hit US) happens. He blames his previous administrations failed to address this issue, and somehow someone has to make a decision to stop it. And that person would possibly Trump himself. That’s the reason he mentioned military options are already on the table. Negotiation is a waste of time as it took decades ended with nothing materialized. And he did warn the world of the “calm before the storm” lately and confirmed the reference to North Korea issue. More and more US military facilities are lining up to the areas approximate to North Korea recently as well.
Korea Peninsula War Break Out
Will the war break out? Looking at the pride of the US superpower, they have to take the risk before too late. If ever US takes a preemptive strike, they are no longer defending merely for its allies, but for themselves. Because Kim Jong-Un made it clear that their ultimate target is none other than the US.
When will it happen? No one really knows, possibly next few days, next week or next month? Or it may drag on for another decade or so, just like the previous US administrations Trump was blaming. No one really has the crystal ball.
All it needs to start is a trigger. The initial trigger could possibly be the next military drilling near North Korea. The confirmation of the start of the war could be possibly be the firing of the ballistic missile near Guam.
If this happens, US will definitely seize this wonderful opportunity to retaliate and invade North Korea immediately. Because the whole world would have sympathized with the US rather than with the isolated rogue state, North Korea.
For investors, we should always be alert for this event if it’s ever enfolding itself. Stay alert rather than digging our heads deep into the money pile and forget what will possibly happen in front of us.
Stay tuned and always on the alert and be vigilant while investing!
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