All three major stock indexes were deep in the red last week, and volatility spiked for the first time in months as the war clouds gather over the Korean Peninsula.
Here’s the latest tweet from President Trump:
Here’s another from two days ago, equally as subtle:
Markets still have not come to terms with the very real potential of a shooting war with North Korea over its nuclear program.
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President Trump, Secretary of State Tillerson and Defense Secretary Mattis have all made it clear that a nuclear-armed North Korea with ICBMs that can hit the United States will not be allowed.
If North Korea persists, this means war with the U.S. There’s only one problem: North Korea thinks we’re bluffing.
North - Korea - US - Part - Failures
North Korea believes that the U.S. is bluffing based in part on the prior failures of the U.S. to back up “red line” declarations in Syria over its alleged use of chemical weapons. Their belief is also based on the horrendous damage that would be inflicted on South Korea.
China also believes the U.S. is bluffing.
Option - Americans - Stakes - Pretext - Excuse
“The military option the Americans are threatening won’t likely happen because the stakes will be too high. It’s a pretext and an excuse to pile up pressure on China. It’s more like blackmail than a realistic option.”
This is how wars begin: not because anyone wants a war, but because two sides misread each other’s intentions and stumble into one.
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Make no mistake — Trump is not bluffing. He’s deadly serious about ending the threat from North Korea. And he...
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