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

by Bill O’Grady

Tensions with North Korea have been escalating in recent months.  The regime has tested numerous missiles and claims to be capable of building nuclear warheads, which, combined with an intercontinental ballistic missile (ICBM), would make the Hermit Kingdom a direct threat to the U.S.  Such a situation is intolerable to the U.S., and thus there is rising concern about an American military response.

In Part I of this report, we will recap the Korean War, focusing on the lessons learned by all sides of the conflict.  We will discuss North Korea’s political development through the postwar period and the fall of communism.  This examination will frame North Korea’s geopolitical situation.  The next step will be to analyze U.S. policy with North Korea and why these policies have failed to change the regime’s behavior.

In Part II, we will use this backdrop to 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 military assets that are in place and the signals being sent by the U.S. that military action is under consideration.  War isn’t the only outcome; stronger sanctions and a blockade are possible, and the chances of success and likelihood of implementation will be considered.  As always, we will conclude with market ramifications.

View the full report