Major geopolitical risks that markets are missing

A giant global disruption is looming. It’s not the demise of the European Union, or Trumpian trade wars. It’s North Korea, the world’s most menacing nation.

North Korea has at least 10 nuclear weapons, and the ability to produce may be around 20 more. Intelligence experts believe the sixth North Korean test of a nuclear weapon may be imminent, with each test since 2003 demonstrating more destructive capability than prior ones. The most recent test, last September, involved a bomb with 35 times the power of the nuke that destroyed Hiroshima, Japan in 1945.

The nukes are half the problem. The other half involves the missiles able to target them at enemy states, and the miniaturization required to place a warhead atop a missile. North Korea already has missiles that can reach South Korea and Japan—key US allies—as well as American territories such as Guam and maybe the state of Hawaii. And North Korean dictator Kim Jong Un has pledged to develop an intercontinental ballistic missile, or ICBM, capable of reaching the continental United States sometime this year.

Since North Korea repeatedly threatened with nuclear action against the United States, some experts believe that the national security of the United States can not allow the independent nation to develop missiles capable of delivering nuclear weapons that already has to the territory of America.

For a nation nearly cut off from the civilized world, North Korea could cause a lot of trouble in financial capitals. Thousands of artillery weapons are stacked along the border with South Korea.Thousands would die before US and South Korean forces were able to subdue all those guns. If North Korea has a nuke able to fit on a missile aimed at either of those two countries, it would obviously multiply the threat, and any risk of US action that triggers a North Korean response.

Source: Yahoo Finance

Junior Trader Ivan Ivanov

Read more:

• Risk off after the escalation in the Middle East, markets are recovering in a period of calm
• The macroeconomic events for today’s trading calendar
• The US government has confirmed the attacks, Trump is calling an emergency staff meeting
• Has the war between Iran and the US started?
• US markets remain under pressure, traders await Iran’s response