by Bill O’Grady

(N.B.  Due to the Independence Day holiday, our next report will be published on July 10^th.  That edition will be our Mid-Year Geopolitical Update.)

Last week, we offered background on the situation with North Korea.  We presented a short history of the Korean War with a concentration on the lessons learned by the primary combatants.  We also examined North Korea’s political development from the postwar period through the fall of communism and how these conditions framed North Korea’s geopolitical situation.  We also analyzed U.S. policy with North Korea and why these policies have failed to change the regime’s behavior.

The primary concern is that North Korea appears on track to developing a nuclear warhead and a method of delivery that would directly threaten the U.S.  This outcome is intolerable and will trigger an American response.

In Part II, we will discuss what a war on the peninsula would look like, including the military goals of the U.S. and North Korea.  This analysis will include the signals being sent by the U.S. that military action is under consideration and a look at the military assets that are in place.  War isn’t the only outcome; stronger sanctions or a blockade are possible, as are negotiations.  An analysis of the chances of success and likelihood of implementation will be considered.  As always, we will conclude with market ramifications.

View the full report