Uncertainty

Just last night and previous daily wraps I have talked about the speed and seriousness of world events coming in on a near hourly basis. The latest escalation on the Korean Peninsula comes after a few strange events including the recent US AirCraft Carrier Battle group which has unprecedented security, being shadowed by a Chinese diesel attack submarine that surfaced within torpedo distance of the US aircraft carrier. Remember China is one of North Korea's only diplomatic and trading partners. If you look at the past of wars such as the Iran/Iraq conflict, the Soviet/Afghanistan war or Vietnam, superpowers have long financed and backed proxy wars using other countries. In Iraq/Iran, the US backed Iraq while the Soviets backed Iran in a war in which the soviets wanted to break their southern landlocked territorial limits. The US financed Afghanistan against the Soviets and the Soviets backed the North Vietnamese while the US fought on the side of the South Vietnamese.

Whether or not the “Contrail incident” was an airliner or as a Jane's Weekly analyst thought, an ICBM launch, there is no disputing the Chinese sub incident, or the North Korean's showing off their new Uranium centrifuges last week. Also the US has been conducting war games with South Korea recently.

If anyone is a current subscriber to Stratfor, I'd like to hear from you. All of these events are meant to send a message. Things like this are not coincidence. With the world in economic upheaval, this is a dangerous time. The speed and depth of incidents over the last month have definitely concerned me as I do not remember such a time in recent history in which so many corners of the world are locked in diplomatic, economic and now military confrontations.

The one thing the market hates, “UNCERTAINTY” and there's plenty of that to go around and more emerging nearly every hour. This is why they say, “When the missiles fly, it's time to buy”. It's not a specific reference to the economics of war, but rather a reference to the removal of uncertainty. We have one more POMO today that is just about to end. I'll be updating shortly.