‘War is likely coming in a matter of months’by Jim Rickards
At this point, there are only four possible outcomes of the U.S.-North Korea confrontation over nuclear weapons:
1. Kim Jung Un stands down and gives up his nuclear weapons program.
2. The U.S. and China combine forces to decapitate the Kim dynasty and force regime change in North Korea.
3. Preventive attack on North Korea by the U.S. before March 20, 2018.
4. The U.S. accepts a nuclear-armed North Korea and relies on containment and deterrence to constrain its actions.
Based on public statements of U.S. officials, my recent meetings in Washington with the director of the CIA and the national security adviser and other sources, I estimate the degree distribution of those possible outcomes as follows:
1. Kim stands down: 10%
2. Regime change: 20%
3. War: 70%
4. U.S. lives with nuclear North Korea: 0%.
Here are the likely market moves as the prospect of war becomes clear: Dollars, euros and Swiss francs will rally at the expense of emerging-market currencies. U.S. Treasury bonds will rally in price, pushing yields lower.
Gold will rally strongly, well past the $1,325 level, and then push higher.
Curiously, U.S. stocks may rally after an initial pullback when the shooting starts. Defense contractors, tech companies, commodities producers, utilities and energy companies should all rally.
Source: Defense and Technology Alert
http://thecrux.com/rickards-the-deeper- ... asia-trip/
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