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North Korean dictator Kim Jong Un’s decision not to bomb the American territory of Guam was a strategically planned chess move.
It was a stalling tactic on the regime leader’s part to give the United States one last chance to strike a deal with North Korea – on North Korea’s terms.
And whatever Washington does in response will come with enormous risk.
Deal or No Deal with North Korea
If Washington declines to meet North Korea’s latest demands, then the regime could launch missiles at Guam in response.
Ignoring the demands would mean, in effect, risking American lives to prove a point.
But if Washington gives the North what it wants, then Uncle Sam would lose its biannual naval drills with South Korea – which have been in place since 1953.
Because that’s exactly what Kim Jong Un wants.
Stop the Drills and North Korea Says It Will Stop Building Weapons
Once again, North Korea is demanding that the United States and South Korea cancel and dispel their twice-yearly joint naval exercises in the East China Sea.
These drills have been a thorn in Pyongyang’s side for years.
You see, to North Korea, they are rehearsals for an eventual invasion – an overwrought taunt, right in North Korea’s backyard.
Washington and Seoul, however, have always maintained that the exercises are defensive in nature, nothing more.
And twice a year, after stating as much, the two nations have always returned to their regularly scheduled Asian Pacific war game programs.
But this year is different.
The United States and South Korea have never held their exercises amid such heightened tensions before.
Because North Korea’s never had this kind of leverage before…
North Korea’s Threats Are Less Empty Than They Used to Be
Twice in July, the isolated nation test-launched intercontinental ballistic missiles, or ICBMs, that can reportedly deliver nuclear warheads to targets thousands of miles away.
This came as a shock to American diplomats and military officials who, until that point, didn’t believe Pyongyang was capable of such advanced weapons creation.
“This is a big deal,” Jeffrey Lewis, director of the East Asia program at the James Martin Center for Nonproliferation Studies, told The Washington Post on July 4.
“It’s an ICBM, not a ‘kind of’ ICBM,” Lewis added, referring to the Pentagon’s initial misclassification of the missile as an “intermediate range” weapon earlier that day.
A little over a month and one more successful ICBM launch later, on Aug. 8, The Washington Post published a confidential U.S. intelligence report, which revealed that North Korea had produced a miniaturized nuclear warhead capable of fitting into one of the aforementioned ICBMs.
Again, shock and awe from some of the highest positions in U.S. defense and government.
“There were some officials both inside and outside of government who already believed that North Korea had the capability to mate a warhead to a missile, but it certainly wasn’t the consensus view," James McKeon, a policy analyst at the Center for Arms Control and Non-Proliferation, told WIRED on Aug. 8.
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Two days later, Kim Jong Un claimed the North would soon attack the U.S. territory of Guam to teach President Trump a lesson.
But Kim backed off on this threat on Monday (Aug. 14) – at least for a little while. And his decision to do so was North Korea’s latest chess move – a move from which President Trump will certainly have to learn.
President Trump’s Lesson: What to Keep and What to Let Go
“[Kim Jong Un’s decision to back off] is a direct invitation to talk reciprocal constraints on exercises and missile launches,” said Adam Mount, senior fellow at the Center for American Progress, according to the UK’s Telegraph on Aug. 14.
Indeed, the threat and subsequent pullback are incredibly timely, given that the annual naval exercises are due to kick off later this month.
Kim Jong Un appeared to reference the joint drills Tuesday (Aug. 15), saying he would “watch” U.S. actions “a little more” before making a decision about whether to launch missiles at Guam.
Critics of maintaining the exercises this year say they could needlessly provoke North Korea at a time when tensions are simultaneously high but arguably favorable for the United States.
Kim seems willing to talk – at least about what he wants from a possible U.S.-North Korea deal.
But Daniel Pinkston, a professor of International Relations at Troy University in Seoul, claimed that calls to reduce or suspend the naval drills are misguided and that they risk increasing, rather than reducing, North Korea’s threat.
"It would be reckless and irresponsible, considering North Korea's behavior," Pinkston told CNN today, pointing to the regime’s uptick in weapons testing this year.
Either way, Washington will have to make a decision.
And either way, Washington has a lot of potential downside.
How to Profit from U.S. Defensiveness
With the United States backed into something of a diplomatic corner, it will have to tread carefully.
Money Morning Chief Investment Strategist Keith Fitz-Gerald is quick to point out that Kim Jong Un is a “wild card,” so trying to imagine how conversations or deals with the dictator might play out before arriving “at the table” is a fruitless endeavor.
Knowing and accepting this fact will be hard for traditional diplomats, Keith adds, “who depend on some small degree of logical behavior and incentive recognition.”
So what does this mean for you and your money? Believe it or not, there’s potential for massive upside even in times of crisis. We’re talking upside to the tune of 355%. We’ll explain…