UPI, New York, NY: In the coming months, North Korea may test a nuclear weapon, and even if it doesn't, it appears to have its annual production line of 2-3 warheads per year fully humming. Iran, meanwhile, has announced it will resume converting yellowcake into uranium-hexafloride, usable in making a nuclear bomb.
Sanctions on both countries and diplomatic fallout in both regions are likely — and military action possible (emphasize possible.) Add to this violence and increasingly sophisticated oil-supply disruption efforts in Iraq, anti-U.S. sentiment in Latin America, trade war talk with China, and possible defeats for the new EU constitution in France and the Netherlands.
What's a global asset allocator to do?
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Mission K-impossible
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North Korea is unlikely to be friendly or even reasonable and rational for several reasons. It has observed what happens to countries about to acquire
mass-destruction weapons, as in Iraq, and concluded it's all the more important to get them fast. It is tacitly supported by China, which, as “Bottom Line” has observed for several years now, is quite happy
with a situation in which Pyongyang is tweaking America's nose. And, unlike Iran, the regime is largely isolated economically and diplomatically: No
Gorbachevs here, only Stalin.
