Investors are notoriously skittish, and global-scale political news has a tendency to be some of the scariest of all. In the light of recent tensions between the United States and North Korea, the major equities indexes saw some dramatic declines.
A new post linked from www.twitter.com/rockwelltrading makes a case for why investors might now be feeling a bit braver. With the shock of the initial events having worn off, some are starting to see the current bit of detente as a continuation of a strange situation that has prevailed for many years.
A Longtime Thorn in the Side of the Global Community
North Korea’s saber rattling is nothing new, after all. For decades now, the dictatorship has made heavy use of dramatic pronouncements and boasts about its willingness to flex its military muscle. While the country has certainly made disconcerting progress toward the development of intercontinental ballistic missiles and nuclear bombs small enough to sit atop them, this is not to say it will ever be eager to use them.
In fact, North Korean leader Kim Jong Un is forced into a delicate balancing act on a daily basis. Even more so than the father and grandfather who preceded him, he needs to be able to keep much-needed goods and aid flowing into the country to sustain the lives of his subjects. With an inexorable opening of eyes toward the country’s real position on the global status ladder, North Korean citizens are becoming much more aware of how its leadership has failed them for so long.
Investors Are Now Readier to Live with a New Level of Menace
North Korea’s threats might still be disconcerting, but they also need to be seen in light of the insecurity and increasing helplessness its leader feels. While investors were rightly put off by the intensity of the recent exchanges, they have started to come around in terms of recognizing that business might just continue as usual. As a result, some analysts now expect that even a carefully calculated display of force by North Korea might not rock the markets as violently as the recent threats and responses seemed to do.