Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

April 20, 2017 | A Slow March to Nuclear War

Sean Brodrick

Sean is the natural resource analyst. You can read his thoughts on gold, oil and other natural resources at EdelsonInstitute.com

My mom blames President John F. Kennedy for my Uncle Jimmy’s first marriage.

It was October 1962. President Kennedy went on TV and told a stunned America that there were Russian nuclear missiles in Cuba. He explained he was going to blockade Cuba until the missiles were removed. And he made it clear the U.S. was prepared to use military force to neutralize this threat.

That was the Cuban Missile Crisis. I don’t really remember it. I do have a vague memory of my parents watching TV. A LOT. My dad was a newspaperman, so at least he got out and got fresh news on what was happening every day.

Mom, though, was stuck at home, with a colicky 2-year-old and a blaring idiot box scaring the bejeezus out of her all day long. And that’s when my Uncle Jimmy asked my mother about his girlfriend. He was thinking of popping the question.

I’ve told you about my large, extended Irish family in the past. I wrote a column, “Standing on the Shoulders of Immigrants,” for Money and Markets. Mom and her brother Jimmy were two of 13 children.

Thirteen kids! My maternal grandmother was exhausted for most of her adult life.

Here’s a photo of the “kids” in the days of good times and bad suits.

That’s my uncle Jimmy in the front row, on the far right. My mom is right beside him. Today, five of “the kids” are still alive.

Anyway, Jimmy asked my mom if he should propose to his girlfriend. Mom’s answer: “The world could end tomorrow! Of course you should marry her. Marry her right now!”

But the world did not end. President Kennedy skillfully negotiated us out of the crisis. The Russian missiles were withdrawn. Kennedy got a lot of praise for that.

What many people don’t know is the U.S. then withdrew nuclear missiles based in Turkey. So the Russians got something out of it, too. That’s how negotiations work.

Here’s something else the world doesn’t know …

There were six separate incidents where the Cuban Missile Crisis almost triggered nuclear Armageddon. If not for the actions of brave men who went against standing orders and procedure, you wouldn’t be reading this today.

Those men include unsung heroes like Vasilli Arhipov and Stanislav Petrov. Russians. They saved the world. You can read about that here.

My point is, there is a lot that could have gone wrong in the Cuban Missile Crisis. I mean, besides Uncle Jimmy marrying a “witch.”

Jimmy shouldn’t complain so much. He got three good kids out of it.

Anyway, fast-forward to today. There is something going on right now that could end a lot worse than Jimmy’s marriage.

And buddy, you won’t believe just how badly things could go.

***

We are on what experts are calling “a slow march to nuclear war.” Specifically, we’re on the brink with North Korea. It’s a desperate backwater of a country that has nuclear weapons. It’s ruled by a tin-pot tyrant with delusions of grandeur.

Robert Litwak of the Woodrow Wilson International Center for Scholars says this is “the Cuban missile crisis in slow motion.”

And President Trump is ratcheting up the pressure. He sent Vice President Mike Pence to the Korean Demilitarized Zone to say: “We’re going to abandon the failed policy of strategic patience.”

Maybe playing tough will work. I don’t have a crystal ball. I do know that both South Korea and Japan are in range of North Korea’s nuclear missiles.

I also know that President Kennedy accomplished a lot by statecraft, when hawks all around him were urging him to push the big red button.

And I do know that there is the potential for the worst to happen.

What if — WHAT IF — Kim Jong-un, dictator of North Korea and president of the Bad Hair Club for Men, believes his own hype?

What if he gets pushed so far, he thinks he has nothing to lose?

What if he hits Tokyo with a nuclear missile?

Never mind the devastation to poor Tokyo. Can you imagine what that would do to global markets? To the global financial system?

Sure, we’d wipe North Korea off the face of the Earth. But that’s little consolation.

These thoughts — these awful possibilities — must be running through the heads of global investors right now.

And that’s why gold showed such strength recently when tensions with North Korea cranked higher.

Now for the really bad news: North Korea isn’t the only potential crisis facing the world today.

Take your pick: Iran … ISIS … Russian hackers … Mexican drug gangs … and enough rogue nuclear weapons to outfit the Devil’s own arsenal.

What assurance do you have that the people in charge will make the right decisions when the crisis hits the fan?

Let’s hope for the best. And for the worst, there’s gold.

Gold can’t be destroyed by fire, flood or plague. It CAN survive the complete collapse of a financial system. I’m not saying that’s what’s going to happen. But if you want to play it safe, own gold.

The fact is …

  Central banks can’t print gold, whereas, eventually, the value of every paper currency will go to zero.

  Gold has a well-earned reputation as the ultimate safe harbor.

  Gold is eternal. Unlike my Uncle Jimmy’s marriage.

Also unlike my Uncle Jimmy’s woes, there are some problems that can’t be solved by a trip to divorce court. Some bad decisions have permanent consequences.

Just something to think about as the world skates on thin ice toward the future.

All the best,
Sean Brodrick

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

April 20th, 2017

Posted In: The Edelson Institute

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*