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Last Updated on: 9th August 2017, 10:18 am
This past week saw the heated rhetoric over North Korea and its so-far unstoppable nuclear missile threat rise to a whole new level not seen since the armistice that brought a close to the Korean War in 1953. What started with punishing sanctions enacted by the United Nations devolved into a worrying war of savage threats on the part of both sides.
Gold is your best defense against the increasingly likely prospects of either a conventional or nuclear conflict erupting on the Korean Peninsula once again. Gold makes sense in an IRA precisely because it protects your retirement assets in times of financial crisis like this series of events is sure to bring on the world.
Presidents Trump and Kim Take the Threats to a Whole New Level This Week
To be completely fair, it was not the often-fiery U.S. President Donald Trump who started the name calling this time. The younger inexperienced North Korean Kim Jong Un upped the proverbial ante by promising that the United States would “pay dearly” for the crushing new sanctions.
He then took the threats a step further by declaring he was looking into plans to fire one of his much-feared ICBM missiles towards the U.S. military based located on Guam in the Pacific Ocean.
Naturally President Trump could not simply turn the other cheek to such an overt challenge as this. He return fired with his own volatile remarks that centered on the emblematic phrase “fire and fury“:
“He has been very threatening, beyond a normal statement,” the President declared regarding Kim. “North Korea best not make any more threats to the United States. They will be met with fire, fury, and frankly, power the likes of which this world has never seen before.”
More worrisome still was the report by the Washington Post. It included an analysis that cited a Defense Intelligence Agency. The report warned that North Korea's military has finally realized its long-standing and decades pursued dream of successfully creating a miniaturized nuclear warhead that it can mount on its ICBM missiles.
World and Asian Stock Markets Plunge On the Testy Exchange
It did not take global, and particularly Asian, financial markets long to react to the unfolding barrage of violent threats volleying back and forth. The U.S. President's “fire and fury” comments shook world stock markets ranging from New York to Tokyo to Seoul. The world financial markets are used to heated rhetoric from the North Koreans, but they expect a greater level of restraint from the United States' leadership.
The increasingly real possibility that President Trump will counter the threats of Kim Jong Un shook the markets to the core as they began reviewing the dwindling options on the list of economic and military responses remaining to the administration. While the S&P 500 only declined to its session lows yesterday, the CBOE Volatility Index catapulted up 11 percent following the President's incendiary remarks from New Jersey.
The South Korean Kospi benchmark dropped 1.1 percent with its currency taking a more serious beating of .8 percent, representing a three week low. Japan's benchmark Topix index declined its largest amount in nearly three months.
At the Heart of the Issue Lies The Miniaturization of North Korea's Nuclear Warheads
The inevitable North Korean advancement on its final remaining technological hurdle of miniaturizing the nuclear warheads it has been testing for over a decade has spurred on this recently escalating Korean Peninsular crisis. Added on to the recent two test missile flights of the ICBMs back in July, they are fueling the fire for President Trump to respond forcefully.
Before his inauguration, he had promised to stop North Korea from gaining their fully functioning and tested ICBM weapons. He boldly declared on Twitter back then, “It won't happen.”
Now the President has boxed himself into a policy corner with his own words. His threats could be a not-so-subtle inference to a nuclear weapon or to a shock-and-awe styled conventional barrage on the North. The Department of Defense did not clarify his intense threats with their comments spokesman Johnny Michael offered:
“We remain prepared to defend ourselves and our allies and to use the full range of capabilities at our disposal against the growing threat from North Korea.”
Japan's Chief Cabinet Secretary Yoshihide Suga told Tokyo reporters that he welcomed the American decision to keep all options on the table. Though in the past the North has traditionally fired off inflammatory rhetoric against the United States and its military presences in Hawaii, Japan, Guam, and South Korea, this latest threat was upped to a whole new level.
President Trump may be forced into military action by pressure from senior members of his own Republican party. Republican Chairman of the Senate Armed Services Committee John McCain warned that:
The great leaders I've seen don't threaten unless they're ready to act, and I'm not sure President Trump is ready to act. It's the classic Trump, in that he overstates things.”
Only a few days ago, President Trump was pleased with the unanimous decision of the United Nations Security Council to clamp down more forcefully the various existing North Korean sanctions. These now target roughly a billion dollars worth of the country's $3 billion in international exports. Yet analysts report that such measures have come too little and too late to decrease Kim's powerful rush of momentum.
The only thing that Kim still lacks is better control and guidance capabilities with his reentry systems which would allow him to more precisely direct a nuclear weapon to a mainland U.S. point without it breaking up in space. Once his rockets are able to fully survive atmospheric reentry, they will be nearly impossible to stop.
Kim feels this is necessary in order for him to cut the heart out of the threat of military action against his family dynasty, of which he is the third successive generation. He also feels that the nuclear weapons capability will win him and North Korea international respect. His news agency warned the world on Monday:
“We will, under no circumstances, put the nukes and ballistic rockets on negotiating table. Neither shall we flinch even an inch from the road to bolstering up the nuclear forces chosen by ourselves, unless the hostile policy and nuclear threat of the U.S. against the DPRK are fundamentally eliminated.”
Even as Trump fires off his latest verbal salvos at the North, Rex Tillerson his Secretary of State is rallying allies throughout Southeast Asia in an effort to bring the firmly region together against Pyongyang while still keeping open the door of negotiations to the reclusive regime. On Monday he visited Thailand, while on Wednesday he is en route to Malaysia.
Effects of Conflict on South Korea, the Region, and the World Will Be “Shattering”
From Manila in the Philippines on Monday, Rex Tillerson offered a last olive branch to the angry North with:
“We hope, again, that this ultimately will result in North Korea coming to the conclusion to choose a different pathway, and when the conditions are right that we can sit and have a dialogue around the future of North Korea so that they feel secure and prosper economically.”
The only reason that the U.S. is still bothering with over two decades of impotent sanctions against the North is because the military assault option offers such a grim and unfathomable picture for the developed world order. Ten million South Koreans reside in Seoul, a mere 35 miles (or only 56 kilometers) south of the border with North Korea and its massive and many artillery pieces and missile launchers stretched threateningly along the shared DMZ border.
Australia's Prime Minister Malcolm Turnbull said it most appropriately Wednesday when he weighed in on what a Korean Peninsular conflict today would mean, even as he called on North Korea to back down:
“A conflict would be shattering. It would have catastrophic consequences.”
Of all the world leaders opining on the subject, only the Australian prime minister is being brutally honest with you. All of your investments within your retirement portfolio are at risk. IRA-approved gold is the only historically proven safe haven and hedge that can save it from a Black Swan event like this one (or a dozen others). Get some of the Top 5 gold coins for investors today while you can still afford the price.