The Contrarian

“In the investment markets, what everyone knows is usually not worth knowing.”


War With North Korea Is In The Air.

On April 26, President Trump invited all members of the Senate to the White House. You can bet it was not just to have coffee and crumpets.

According to several Republican Senators, it was a full Senate briefing on North Korea. We believe that was the first time a President ever did this at the White House. It was described as a “thorough accounting of the administration’s diplomatic and military options when it comes to dealing with Kim Jong Un.”

Well, that is unusual, and suggests that something important is being planned. The president wants to make sure he has the Senators on the U.S. side of any potential conflict. How rare! We congratulate him on that.

The U.S. Vinson fleet has been sent to the proximity of North Korea. China has amassed 150,000 soldiers near the North Korean border, apparently not to help but to threaten North Korea. We don’t think this is just a bluff.

If you listen closely to the rhetoric out of the White House people, they are serious. The ruler of North Korea has been called a “crazy fat kid” by Senator McCain. He (Kim Jung Un) is allegedly irrational. We don’t think it’s exactly proper to call the head of a country such names, but what the heck, he is thousands of miles away.

And we don’t agree that he is “crazy.” Actually, we know he is ruthless. But he is probably cunning as well. He may be a negotiator, like Trump. He may want to get the US to give financial aid, more oil on a regular basis, etc. in return for not using his nuclear weapons and pretending not to develop long-range ICBMs. It would be similar to what his family did 23 years ago.

Remember the agreement signed On October 21, 1994 between North Korea (DPRK) and the United States in which the DPRK agreed to changes in its nuclear program in return for supply of oil from the US? Apparently, that lasted for about 9 years. The DPRK probably intends to bring the confrontation to another such beneficial agreement. After all, for them it’s just a piece of paper.

The U.S. population is being told that a major strike against North Korea is a necessity because soon that country will be able to send a nuclear warhead to Hawaii. Perhaps they might even invade the islands. But there are many Koreans in Hawaii already. We love Korean food, but the increased demand would drive the prices up.

The preparatory talk is designed to get Americans to wave the flag and support a military strike. How dare he hit Hawaii, they’ll say! What will happen to all the beautiful hula girls, the Mai Tais we loved so much, and Waikiki?

But seriously, take this seriously!

The generals in the Trump cabinet are probably itching to show their stuff. They have been restrained for eight long years. Killing people with drones just doesn’t give the same thrill. We can just hear them say, “let’s give them hell.” The war industry will quietly say, “the check is in the mail.”

Actually, worse things can happen, such as the U.S. going into Syria and deposing Assad. It would be another Iraq. North Korea, like Albania, (remember “Wag the Dog”) doesn’t have a lot of friends. Iran, which doesn’t have a lot of fans, is a business partner, giving North Korea lots of nuclear advice. China has used the country as a thorn in the side of the U.S. But Xi now wants to show Trump that he is a friend of the U.S.

The great novel, Patriot Threat by Steve Berry, didn’t help North Korea’s image. The recent assassination of his half-brother via poison was a case of “bad publicity.” But what is a ruler to do when his half-brother playboy might want to depose him?

There are several hundred thousand people in the horrible prisons of North Korea, starving, being tortured, raped, and worse. They might like a war, providing they don’t get killed in the process.

The South Koreans might like the prospect of eventually merging the two countries again, after their ruler is gone. China might look forward to being on good terms with a unified Korea and not worrying about the alleged mentally-challenged neighbor playing with his nuclear toys.

The generals in the North Korea may like it as they are fed to the dogs when they screw up. We hate to think what happened to the guys in charge of the last missile that blew up. Dog food?

But the really big winner is the U.S. war industry. Imagine, they will have a chance to use all those beautiful weapons on real targets. Many rockets are probably past their expiration date and must be used up. A potentially successful war, the first one since World War II if you don’t count Grenada, would be wonderful for getting a new military spending bill through.

And finally, the most important question:  how can you and I benefit from this? After all, that is what investing is all about.

You can buy the war industry stocks, but it’s not without risk. Remember, the US president is also a target…of the radical left.

And if all goes well, we may not have to put any soldiers on the ground. Just bomb the hell out of their missile and nuclear facilities. Contrary to Bush Jr. and Rumsfeld, who killed hundreds of thousands of innocent Iraqi civilians in “Shock and Awe,” we don’t believe President Trump would target the population.

That would be humane…and smart. The whole world will hope for an uprising of the Korean people, deposing the ‘crazy fat kid.’ The US wouldn’t even have to engage in ‘nation building.’ That would be left to the South Koreans.

Then we send in McDonalds, Burger King, Pizza Hut, Kentucky Fried Chicken, etc. to finally give these people some ‘delicious’ food. Perhaps even Shake Shack would go. And in a few years, we can send in the medics to save these people from obesity, selling them the statins, convincing them that cholesterol is bad, and give them other drugs. Even our pharma industry will like that.

You see, everyone wins.  Except that “crazy fat kid.”

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