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The North Korean Nuclear Crisis Poses 3 Immediate Risks to the U.S.

The U.S. Navy's top officer in the Pacific theater yesterday (April 27) told the Senate Armed Services Committee (SASC) that the North Korean nuclear crisis has escalated to its most-worrisome point ever.

The concerns U.S. Navy Adm. Harry Harris, Jr., commander of the U.S. Pacific Command, sketched out were essentially carbon copies of those that we've been telling you about here for the last four years. And Adm. Harris was surprisingly candid about three of the biggest risks that America faces – risks that we've been writing and warning about here, even though the Pentagon has been loath to even acknowledge them.

The risks I'm referring to:

  • North Korean Nuclear CrisisThat North Korea will succeed in its efforts to create sub-launched ballistic missiles – an achievement that will put the Mainland United States within range of the threats being made by Pyongyang's Kim Jong Un.
  • That China's militarization of the South China Sea – coupled with its lack of "transparency" (military speak for "we have no damned idea how far they will push things") – creates a major risk for America and its allies in the Pacific Rim.
  • And that China and Russia will succeed in creating conventional and nuclear-tipped "hypersonic" weapons – leapfrogging U.S. leadership (and stalled programs) in these areas, resulting in a new-and-real threat that the American military can't currently defend against.

Let me brief you on this admiral's testimony, since the North Korea nuclear crisis, the South China Sea, and the "hypersonic arms race" are all story lines we've been able to keep you ahead of.

And we'll start with the more immediate threat – North Korea.

The North Korean Nuclear Crisis – a Contrarian's Long-Held Perspective

We first started talking about Pyongyang's weapons program back in February 2013 – in a report featuring the headline: "If This Stock Doubles, Thank North Korea." Aerojet did just want we expected. And we're still following the stock.

In the four years since – and until very recently – Pentagon officials and media pundits have been highly dismissive of the North Korean nuclear threat. Their reasoning: The "Hermit Kingdom" missiles lack the range and guidance systems to "hit" the U.S. mainland.

We adopted a "contrarian" viewpoint.

Range, I argued, is a relative term. And the advances North Korea is making with sub-launched ballistic missile technology (SLBMs) could make this a moot point. If not us.

As we detailed several weeks back, a North Korean test launch in early February employed something called a "cold eject" launch system. In other words, compressed air or compressed gas is used to "fling" the missile out of the submarine and on its way – before the missile's rocket engine ignites.

I spent decades covering the global defense and aerospace sectors, so when I saw this, I immediately recognized the technology for what it really is: It's the technology that submarines use to launch ballistic missiles.

If you think back to the Cold War, the nuclear threat truly escalated when the United States, the Soviet Union, and others perfected the sub-launched nuclear missile. That's what made it possible for each side to "park" ballistic-missile subs (known as "boomers" in Navy parlance) far enough off their rival's coast to make them hard to detect, but still close enough to put every single major city within striking distance.

The Pentagon played this down – just as it did last April's successful test launch of a missile from a submarine.

I saw this lack of candor as a mistake – and said so both times.

Nor has the Pentagon been publicly forthright about some of the other technical advances North Korea has made with its missile program – advances we detailed in last month's report, "According to These 'High-Tech Forensics,' It's Time for Washington to Tackle North Korea's Nukes."

One of the specific "advances" we mentioned – better solid-rocket fuels, as evidenced by "forensic" study of the images taken of rocket-engine tests. Melissa Hanham, from the Center for Nonproliferation Studies, analyzed photos of rocket-engine tests and deduced from the color of the exhaust flames that this three-stage weapon is being designed to hit the U.S. East Coast. And by "measuring" photos of the missile itself, and analyzing where it's being carried, the KN-08 Rodong-C missile is designed to hold enough fuel for a range of 7,200 miles – enough, if perfected, to make good on North Korea's Easter 2016 threat to hit Washington.

Specifically, Harris said the Pentagon isn't just worried about launch-launched ICBMs, but also the submarine weapons the North Koreans are developing. And he said he's also troubled by the solid-fuel advances Pyongyang is making.

"Aggressive rhetoric since the New Year strongly suggests North Korea will not only continue to test these proscribed systems, but is also likely to attempt a first launch of a similarly prohibited intercontinental ballistic missile," he told Senate members.

I'm telling you this not to boast (well, okay, maybe a little), but to underscore that the research we do, the analysis we engage in, is all designed to keep you ahead of the curve – by bringing you the insights we believe are important for you to know.

Adm. Harris was also surprisingly open about the "hypersonic weapons threat" – something we've also been talking about here for years, and which we detailed in several key reports last year.

The "New" Arms Race

As Adm. Harris saw it, the hypersonic threat and the South China Sea issue are part-and-parcel of China's new military aggressiveness.

"China's military modernization cannot be understated, especially when we consider the communist regime's lack of transparency and apparent strategy," he said. "China is committed to developing a hypersonic glide weapon and advanced cyber and anti-satellite capabilities that present direct threats to the homeland.

Must See: This small $6 U.S. defense firm with a new top-secret technology could help the Pentagon stop a Chinese sneak attack dead in its tracks. Read more…

We've been talking about the South China Sea issue – where China is now constructing artificial islands and turning them into military bases – since the summer of 2012, which was years before the topic hit the mainstream news headlines in this country.

And we told you about China's Internet Army – and its intent to "hack America" – at about the same time.

Harris is right – Beijing is flexing its muscles, especially in the China Sea region.

The South China Sea region is home to 1.5 billion people. It also has bountiful fishing grounds, vast energy deposits, key military bases, 50% of the world's tanker shipments, and five of the top 10 shipping ports on earth. Indeed, more than half of the world's merchant fleet shipping passes through the Straits of Malacca, Sunda, and Lombok – and most of that continues on to the South China Sea, say researchers at the Center for Naval Analysis and the Institute for National Strategic Studies.

The U.S. Navy uses this area to travel to its bases in Southeast Asia.

The East China Sea spat is smaller – both geographically and in terms of the players (only Japan and Mainland China have competing claims here). Right now, however, it's the more dangerous of the two – thanks to Beijing's officially decreed air defense zone.

Hypersonic weapons will play a role here. China has developed a hypersonic anti-ship missile known as the "carrier killer" (the Dong-Feng 21). The purpose is to keep U.S. aircraft carriers – the floating airfields the Pentagon uses to project U.S. force to remote regions – at bay.

That's a "tactical" weapon. But as we detailed in a huge report late last year, both China and Russia are developing strategic weapons known as "hypersonic glide vehicles," or HGVs. These are super-fast, nuclear-tipped strike weapons – but which are highly maneuverable… unlike conventional ICBMs. That makes them almost impossible to shoot down – at least with current technologies.

Every summer for the last two decades, the United States and its allies send their top aerospace experts – military and civilian – to Huntsville, Ala., for the Space & Missile Defense Symposium.

The key topic at this year's gathering? You guessed it – hypersonic weapons.

Indeed, during the first two days of this year's symposium, "The Wedge" was mentioned "in almost every speech" made by the U.S. military's top missile commanders, Defense News reported.

The United States had the lead in hypersonic weapons – but has backburnered its development programs and is risking losing its technological lead. It also needs to develop laser weapons and electromagnetic railguns for defensive purposes.

These advances are igniting a "New Arms Race" in hypersonic weapons that the Pentagon must acknowledge.

That's not happening – yet.

But here's what we do see happening next.

Next Up

Clearly – and now the Pentagon says it, too – the North Korean nuke threat is both real and urgent.

It's one that's been permitted to grow, to advance, for a number of years.

Taking the politics out of this (I'm looking at the issue, the technologies and the threats, not the personalities), it seems like U.S. President Donald Trump has demonstrated a proclivity for initially taking a very tough, hard-line stance on issues like this one – and then adopting a less-aggressive position. It gives him a fallback, which may well be a good thing in a realm like this one.

Late last week – and even at the start of this week – it seemed as if a military strike was imminent. Now it's more of a wait-and-see situation. If Kim Jong Un pushes things too far, a military strike by U.S. forces is something we could see.

Ideally, it would be good for Washington to lean on Beijing to lean on Pyongyang more than it has to date – putting the onus more on China than the United States.

Adm. Harris told Senate members that the financial sanctions imposed against North Korea haven't deterred the nuclear program. And he candidly told committee members that he's "skeptical" of Beijing's willingness to quell North Korea's nuclear ambitions.

Even so, he said he's become "cautiously optimistic" following recent talks between President Trump and Chinese President Xi Jinping.

One key point: In any talks with Beijing, Washington must take care not to allow the planned Korean deployment of the U.S. Terminal High Altitude Area Defense (THAAD) anti-ballistic missile (ABM) system to be surrendered as a "bargaining chip."

China hates this deployment of the world's most advanced ABM system, worrying that it will give the U.S. military an "early warning" of China-launched missiles, which would give America a "first-strike" capability.

We've had you ahead of the curve on all these critical stories.

And we'll keep you there.

Editor's Note: This story originally ran in Bill Patalon's elite subscription service, Private Briefing – where he regularly shares insight on investments that have seen 217 double- and triple-digit peak-gains since 2011. You can get access for just pennies a day. Learn more

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About the Author

Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.

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  1. DennisBartholomew | April 28, 2017

    What are the 10 best pot stocks for 2017

    • Dave Zeiler | May 1, 2017

      Dennis,

      Thanks for reading Money Morning. I believe this story will answer your question.

      Cheers,

      Dave Zeiler, Associate Editor, Money Morning

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