USA & North Korea

Zola.

There are rumours tomorrow that North Korea will launch a couple more items into the sky. It's getting rather feisty...

If the worst happens, and one starts trying to bomb the other, what typically happens to global markets if it breaks out to a state of war, as more and more countries get pulled into it?

Say for example US and NK go all out war, but on their own. Will the US market take a huge hit, or does things typically run on, business as usual? I cant envisage the world ever having a world war quite like WW1 and WW2 again, I just dont see people signing up for that, lessons surely have been learned.

I have only been investing for a few years, so never saw how global markets change and are affected in times of war and uncertainty.

What do you think?

fun4everyone

Trump will announce he broke the course record at Pyongyang national previously held by Kim Jong-Il by shooting a 33. Kim Jong-Un immediately nukes Guam in response triggering WWIII. Financial markets collapse worldwide. Gold and Bitcoin rocket to astronomical levels.

JohnRo

Think about the Cuban missile crisis and the cold war that led up to it, between super powers that really could have nuked each other and everyone else into oblivion. The record shows stock markets barely moved during that time when the world really was on the brink for a few days.

I suspect most folks are expecting cooler heads to prevail.

Glen_Clark

Zola. wrote: »

There are rumours tomorrow that North Korea will launch a couple more items into the sky. It's getting rather feisty...

If the worst happens, and one starts trying to bomb the other, what typically happens to global markets if it breaks out to a state of war, as more and more countries get pulled into it?

Say for example US and NK go all out war, but on their own. Will the US market take a huge hit, or does things typically run on, business as usual? I cant envisage the world ever having a world war quite like WW1 and WW2 again, I just dont see people signing up for that, lessons surely have been learned.

I have only been investing for a few years, so never saw how global markets change and are affected in times of war and uncertainty.

What do you think?

Life has taught me !!!! up is more likely than conspiracy.
All out nuclear war is in no-ones interest so no-one is likely to 'sign up for it'
If it happens its more likely to be by accident - one side thinking its under attack so retaliates, setting off a chain reaction.:(

BLB53

There are rumours tomorrow that North Korea will launch a couple more items into the sky

There is a very well-known investment market saying which goes ‘Buy the Rumour, Sell the Fact’. This is founded on the forward looking human psychology which influences market behaviour.

If something positive is anticipated by a set date then buy now ahead of the announcement. It also follows that, due to the herd instincts of the market, the positive story tends to gain its own momentum such that it is almost inevitable that on the day of announcement of the fact, this then causes disappointment.

spadoosh

I'd expect market turmoil.

Firstly it wouldnt just be between NK and US. NK stratergy should they be attacked by anyone includes attempting to level Seoul. Thats some 10 million people with rockets pointed at them.

The reason i think US hasnt attacked already is they can not guarantee a quick end to it. They have no chance with a ground invasion. Air and sea are the only options (missiles/bombs) and a good portion of NK hardware is well hidden (in bunkers).

If america go for the nuke option and attempt to eradicate NK, youre still looking at some response on seoul and other areas for that matter (they dont like japan much either).

The cold war is a non argument and certainly not comparable in my opinion. Firstly it wasnt a war it was an arms race. The economic suffering was huge howerver it was largely felt by one side.

As soon as a NK bomb touches seoul expec tthe markets to react badly. SK supplies quite a bit of refined oil in the region. I would expect their supply routes to halt. Japan isnt far away and they would also struggle with exports (NK has the second most submarines in the world). Youve got beijing and shanghai within a few hundred miles of NK border and a huge amount of products shipping in the peninsula in other huge cities. All of which will be more difficult to move or require more money to move pushing prices up.

If SK trade gets effected, thats samsung. They supply most power stations and huge parts of most nations infrastructure. Reduced supply always leads to increased prices. So oil and electronics will cost more at least int he short term. Reduced supply from the region will push prices up globally in all aspects of the economy. Lets say china cant get oil from SK so they have to buy from russi, russia jack up their prices because they can and suddenly europe is paying more.


NK are playing the game and hold the trump card imo. Trump cant do anything without putting Seoul up as bait. The economic and political fallout of that means Trump is restricted to not so subtly tweeting about china.

Look at the markets for the likes of Ukraine and tell me war doesnt effect markets. Thats a tiny scale war in comparison to what would happen on the korean penninsula.

North Korea is surrounded by the 2nd, 3rd 11th and 12th largest GDP's in the world and you expect stock markets not to react if nukes are dropped?

As an example. I would expect Apple shares to take a dip. A lot of their products are manufactured inthe region and any issue round there will disrupt their supply chain. Being a luxury good, in times of war it will be of lower priority so it will effect sales.

Where as hanwha corporation is a SK explosives and defence company (traders really but a good portion of explosives and defense). I imagine their stock would rocket, quite literally.

CommyTooper

spadoosh wrote: »

I'd expect market turmoil............ I imagine their stock would rocket........

OK, silly season is over, and panto season isn't for another three months. Calm down.

Zola.

It is interesting times we live in, scary when you have two maniacs with obvious egos beating their own chests.

China appear to be well tied in with NK and seem to be telling NK to calm down only at face level, not sure whats really going on as they continue to fund them.

Part of me thinks its ironic and quite cheeky that the USA are the world police on nukes, and they are the only country to ever drop them on people.

sourcrates

CommyTooper wrote: »

OK, silly season is over, and panto season isn't for another three months. Calm down.

What ? .........Just like that !!!!!!!!!

Reaper

NK loves to make dire warnings without basis in reality. Trump has now started to do the same.

But ignore the rhetoric. North Korea has no reason to start a war and the US has no credible military options open to it, as nicely described in this BBC story: http://www.bbc.co.uk/news/world-asia-41095772

The simple fact is countries that possess weapons of mass destruction do not get attacked, those that don't are vulnerable. Hardly a great lesson to teach the world when trying to encourage nuclear non-proliferation but sadly true.

sourcrates

Zola. wrote: »

It is interesting times we live in, scary when you have two maniacs with obvious egos beating their own chests.

China appear to be well tied in with NK and seem to be telling NK to calm down only at face level, not sure whats really going on as they continue to fund them.

Part of me thinks its ironic and quite cheeky that the USA are the world police on nukes, and they are the only country to ever drop them on people.

During the Korean war in the 1950`s, china came in on the side of the north, US and commonwealth troops were actively engaged in a war, against China.
Thankfully, in the 60 odd years since, china has been cultivating much better links with the west, and its a very different country today, than it was then, but they do still fund the NK regime, so i think more pressure needs to be brought to bear on china to end kims suicidal slide to destruction.

Any of those missiles goes off course and lands somewhere it wasn't intended to.......well you know how itchy the yanks trigger fingers can get.

Kim is playing a very dangerous game of brinkmanship, against a US president who is almost, as insane as he is.