Friday, December 29, 2017

North Korea Updates

The situation with North Korea and the US certainly remains unresolved. Since this problem has the potential to become very disruptive to markets and (in a worst case scenario) the stability of the entire financial system, we must monitor events closely. 

Below are links to a couple of recent articles that don't indicate things are improving at this point in time. Also, we have the Winter Olympics coming up soon in South Korea which adds some tension to the situation.


South China Morning Post - Article on relations between China and N. Korea getting Worse

The sub heading for this article states that China will never accept North Korea as nuclear power. The article goes on to say that China remains committed to trying to prevent nuclear weapons on the Korean peninsula, but is concerned that North Korea has changed its stance on this issue from previous administrations there. Obviously, China is a key player here and their attitude on the situation is important to track.

FoxNews - North Korea Testing Mounting Anthrax onto ICBM's

"North Korea is beginning tests on mounting anthrax onto intercontinental ballistic missiles that would strike the U.S., a report said on Wednesday just two days after the White House’s U.S. National Security Strategy stated Kim Jong Un is pursuing chemical and biological weapons."

I think it is obvious that nothing good is likely to come from this news. It should be noted that North Korea has denied this story. 

South China Morning Post - Is the World Running out of Options on North Korea?

"The latest United Nations sanctions on North Korea are expected to choke its economy still further, but with Washington and Pyongyang showing no signs of stepping back from their face off, observers have warned that the world is running out of options to resolve the crisis."

Jim Rickards maintains his forecast that war is the most likely scenario (70% chance), but moved back the end of his time frame to mid 2018 (from Spring 2018). He also talks a bit about a couple of weapons the US has been working on that are not fully disclosed to the public yet in this recent interview. (see bold items in list of topics discussed in the interview just below)

Topics Include:
*Year in Review 2017
*Wealth Gap – Top 1/10th of 1 pct control more wealth than the bottom 90 pct
*Average incomes declining over close to 40 years
*Transcending partisan politics to understand how the system is inherently advantaged or disadvantaged for some and how it affects societal stability
*How societies deal with these kind of structural imbalances
*Financial system stability as a function of scale
*What institutional investors focusing on liquidity as a due diligence priority may be implying about the views forming on systemic stability
*Why the system still has not de-levered since the the 2008 GFC, and how risk it is even more concentrated today
*Fed policy update and implications for 2018
*Why avoiding a disorderly stock market decline is now being considered in Fed policy
*North Korea Update
*Secret US Weapons Programs: Waverider, Nap of the earth microwave systems

No comments:

Post a Comment