“We consider this a declaration of war against us.” -North Korea news agency, KCNA.
North Korea’s dear leader Kim Jong Il is dying or dead. It has been speculated that the generals in charge of the army don’t want any more Kims running the family business.
So they fired off a small nuclear bomb underground and test fired a few missiles. This is straight out of the dictator handbook. You build the us-versus-them mentality and rattle some sabers to build public support for the new regime.
A Hermit Knows His Cave
The hermit kingdom knows just how far to push the boundary. Its neighbors, Russia, China, South Korea and Japan have responded with little more than fierce words and strong letters.
That said, North Korea can’t overreach. China and Russia represent more than 90% of the trade with North Korea and could bring economic chaos to the country by shutting down trade. In fact, just such a scenario in the mid-90’s spawned a famine that killed up to two million people… and yet didn’t change the leadership.
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It is unlikely the UN will follow that path. A more likely scenario is to cut off all luxury products and arms trade – then freeze bank accounts, which China could do instantly.
Neither China nor Russia wants Japan and South Korea to start building nuclear weapons as fast as they are building Kias and Hondas. An arms race in Asia is not a benefit to anyone.
The problem is that China doesn’t want a new flood of refugees streaming across its 800-mile border. Nor, does it want to wake up one day to see 25,000 U.S. Marines dug in across the Yalu River.
President Obama should tell Chinese President Hu that if the North Korean leadership changes, the U.S., Japan and South Korea will pay for unification. And U.S. Troops will bug out to Afghanistan.
You can just have Secretary of State Clinton cut me a check for my usual consulting fee.
They Don’t Care One Bit
The locals don’t seem to care. The KOSPI Composite Index has gone sideways.
Sure there was a brief, knee–jerk reaction on Monday. But that’s about it.
I’ve made a lot of money for my readers in Crisis Trader by buying dips on these types of incidents only to see the situation resolve itself and the money come pouring back in.
Right now I have one such situation occurring in the lush oil fields of Iraq. The Kurds just gave this company to export its crude oil via Turkey. They are ramping up production 1000% this year. And nobody’s heard about them- yet. If you’d like to learn how you could profit from international crises, read my Special Report I put together for you.
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