My missile is bigger than yours!
11 Aug 2017
Increasing tensions between the US and North Korea seem to be starting to weigh on investors’ minds which is as it should be. The US defence secretary, Jim Mattis, has warned North Korea that “It should stop actions that would lead to the end of its regime and the destruction of its people”; nothing veiled in that threat! The normal “safe haven” investments are benefitting, notably the Swiss Franc, gold and US treasury bonds.
We might find it useful to remember in this context that: “The antelope runs faster than the lion because, of course, the lion is running for its lunch while the antelope is running for its life”.
North Korea has over the years honed a tremendous ability to hurt its neighbours - primarily Japan and South Korea. Its population of 20 million people is malnourished with record levels of amphetamine use - so, “high and starving”. They are also - likely - completely brainwashed without any chance of learning the truth about say South Korea’s stellar economy or their own regime’s corruption. Its economy basically has nothing to lose.
Amidst all the rhetoric, people seem to forget that Seoul hosts about 25% of all South Koreans (and over 75% of its biggest companies and pretty much 100% of its financial sector) and that it is located basically a howitzer distance away from the DMZ. North Korean howitzers, ancient as they maybe, have an accuracy rate of under 3 metres.
Making all this far worse is the two personalities jousting here - one is a temperamental, mendacious, delusional, capricious, dim witted megalomaniac. The other is Kim Jong Un.