The Market’s Blasé Reaction to Trump’s Nuclear Threats

In the wake of the recent hydrogen bomb test by the DPRK, US president Donald Trump has threatened a nuclear strike against the country. In a White House statement that was read out to the public, it was made clear that the president intended to use nuclear capabilities to stop the DPRK from further development.

“President Trump reaffirmed the commitment of the United States to defending our homeland, territories, and allies using the full range of diplomatic, conventional, and nuclear capabilities at our disposal,” the readout said.

The US and Japan were on the same page as they both denounced the test and called the country’s behaviour “destabilizing and provocative actions,” the statement read. Trump also added that the two countries will continue their commitment to a mutual defence cooperation.

North Korea on Sunday announced it had conducted a “successful” hydrogen bomb test, hours after two tremors were detected in the country.

“The hydrogen bomb test was a perfect success,” North Korean state television said, adding that the device was capable of being loaded onto long-range missiles.

As this tense situation unfolds it is clear that the US has run out of non-military options to suppressed the DPRK’s legitimate right to build a defensive capability against invasion by the largest superpower in the world. Sanctions have ceased to have the necessary impact on the DPRK’s economy that they once had. The DPRK has also shown little interest in coming to the negotiation table. The DPRK frankly has nothing to negotiate. Their right to build self-defence measures is non-negotiable.

The decades long attempt to destroy the DPRK via economic means has been a failure. The only result has been countless suffering on the side of the Korean people from economic sabotage by the US. This suffering, as horrible as it was, failed to achieve its objective in the end. The US continually tried to strangle the country’s economy while offering minuscule aid packages as a carrot to abandon their right to self-defence measures. The criminal nature of what the US has done to the DPRK since the end of the Korean War should not go unanswered.

As president Trump seems intent on provoking a nuclear war with the DPRK, the markets have seemed to react differently. A general calm seems to be about the Asian markets and Wall Street. Apparently, they don’t share Trumps’ apocalyptic rhetoric. They don’t believe that Trump is really willing to instigate a nuclear war. Without any actual plan of attack or any date set by the president, the markets see little reason to take his threats seriously. The markets prefer to simply keep on accumulating capital as usual. They don’t see a real threat.

This kind of reaction undermines the authority of the president. As he is talking war, the markets are reacting as though he is bluffing. Frankly, the markets have every reason to think that he is. Trump has already called an ultimatum against any further tests of intercontinental ballistic missiles (ICBM) and nuclear technology. The DPRK has completely disregarded the threats and continued down the path of weapons development.

The general consensus amongst the economic community is that there isn’t much chance of a nuclear war anytime soon.

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