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Geo-Political Risks: What Will North Korea’s Provocations Lead To?

  • North Korea is treading on dangerous territory with multiple military provocations ahead of an important BRICS summit hosted by China. Of note is the North Korean claim that it had perfected a hydrogen bomb with “unprecedentedly big power” that could be loaded onto an inter-continental ballistic missile.
  • The US response has been mixed – this may allow Kim to believe that his calculated gamble has paid off as the US appears to have a dearth of viable options to deal with North Korea. Yet, Kim is playing a dangerous game and could give US and China more incentive to take joint action against his regime.
  • Going forward, it is likely that North Korea takes advantage of the lack of focus among US and Chinese leadership to have more nuclear and missile tests and even test the South Korean response with a few small-scale provocations. The US and China could decide to work together to increase the cost to North Korea of its policies, failing which the US could decide to ramp up pressure on China to cut fuel supplies to North Korea through progressively more painful trade measures in various areas.

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This post first appeared on Smartkarma | Intelligent Investing, please read the originial post: here

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Geo-Political Risks: What Will North Korea’s Provocations Lead To?

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