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.

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