Economic Sanctions on N. Korea Pyrrhic Victory!

Economic Sanctions on N. Korea Pyrrhic Victory!

U.S. Placed New Economic Sanctions on North Korea. Beware of a pyrrhic victory!

One of the few strategies that the USG has done well is economic warfare.When the Soviet Union was dismantled in the 1980’s, one of the major instruments employed was to bankrupt the Soviet regime by forcing it to increase its expenditures for perceived military interests.

SDI [Star Wars] was more of a contrived scientific entity which was intended to intimidate the Soviet leaders into a military race which would inevitably bankrupt the Soviet Union.

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It worked.

During the ten year period of the Iran sanctions, every bank, legal and illegitimate was targeted by the US Treasury in order to force them to stop doing business with Iran.

It too worked.
Iran was forced to the negotiation table because they were hurting for cash flow and enduring an untenably deteriorating economy.

Now, the USG has placed Kim Jung Un in its crosshairs of economic warfare for which I am certain that North Koreans and their Chinese overseers are not prepared. I believe that if we were to succeed in taking down the financial elements of the ‘hermit state’, we will encounter problems far greater than what we have seen in the past.

Despite the pervasive belief that the past or present rulers of North Korea were crazy, they were and still are quite rational in garnering world attention whenever they saw fit.

For now, Kim, a young man trained in a Swiss boarding school, is garnering world attention by creating nuclear weapons which have some capability to reach across a small part of the Pacific Ocean. However, if Kim finds himself boxed in by a failing economy caused by our economic sanctions, then he may strike out against one of our closest allies.

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Kim is capable of storming over the Demilitarized Military Zone [DMZ] and overwhelm Seoul[SK] with very little effort but at a great cost in human lives.He is also capable of threatening his long perceived enemy, Japan, with some primitive form of missile system, if he so desires.

USG economic warfare is so effective that we are now entering a zone of unintended consequences which we have to understand thoroughly.

North Korea is exceedingly poor.

Our South Korean allies have been using North Korean cheap labor to make a variety of products for decades. China has made certain that from time to time, it can check Kim’s outlandish behaviors.
Yet, China fears one outcome more than any other.If North Korea were to disintegrate economically then the citizens will stream over the contiguous border and flood the already highly constrained Chinese economy, possibly forcing it too into bankruptcy.

As much as we think of China as a potential enemy, we are far more concerned that as one of the largest economic powers in the world, China, might also collapse, both politically and economically. This would create a massive deterioration of the highly connected world economy/power.

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An economic chain reaction would be initiated over which the USG would have no control.US economic warfare may garner us a pyrrhic victory. It will be exceedingly costly.

I strongly advise those who are initiating the economic war against North Korea spend some time to game out every possible consequence imaginable.We were not very successful in anticipating surprises—witness “Brexit”.

Cicero, the Roman orator cautions us as follows:

“Certain signs precede certain events.” 

 

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16 thoughts on “Economic Sanctions on N. Korea Pyrrhic Victory!

  1. Chia Cha

    I agree, US dollar is king of the world, supported because the cheapest world trade routes (those on sea) are controlled by US navy, and that navy is strongest, and US dollar is invested in all countries around world…

    (everyone accepted dollar because rich bastards controling those countries where got their class position upgraded internationally)… meaning rich in lesoto can order blond prostitute from NYC and give her dollars, and she would accept it, or he can buy house in NYC and order her there, even better… US is best seller of artificial class positions on world… And everyone still wants that given class positions even such financialization of economy destroys your native economy, who cares, as long as you can shag something on manhattan ….
    finanacialization means that you buy house on credit which was already built… meaning you do not house on credit which is new… meaning economy just go in debt without creating new value… meaning only someone bought new class position in oppossition to someone who does not have house :)))

    1. Chia Cha

      meaning you do not build house on credit, house which is then new*, meaning real value is added to economy…
      more value in capitalist economy is added when you artificially make number of houses scarce 🙂

      https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

  2. Iggy A

    I have some background in this area.

    It was likely NK would do something this year to take advantage of the US election and trouble in Europe.

    It was reported Obama’s sanctions specifically mentioned the NK leader. Anybody familiar with Korea would know that’s a big deal to them. That it is something they could make a big deal out of given the Cult of Personality thing.

    I haven’t been paying attention to Korea for a few years. I have a vague memory of some headlines about economic/food trouble. — If the North is hurting more than its usual starvation —- we stand a good chance of seeing them do something big this year – by which I mean —- murdering some people — South Koreans, Japanese, or Americans.

    Bush Jr could have collapsed the North – but he blinked.

    In his 2nd term, he got China to finally agree to banking sanctions that experts had always said were necessary hard currency flows for Pyongyang to keep the elites happy.

    Something about North Korea’s reaction seemed out of character to me. They sounded shrill and weak in their bluster. North Korea does not posture weak…

    And I hit a winning streak on educated guesses: I predicted the first ICBM test since the original in 1998. Then the first nuke test. Then a return to blood-letting. I predicted it would likely be a return to DMZ shoot outs – and it was – but at Sea, not land.

    I also predicted NK would collapse before 2010 started. I didn’t think Bush Jr would back down…. but he did. I can’t say I blame him. NK is pathetically weak and pathetically dangerous…

    The one and only big card they have left to play that they haven’t in a long time is —- Kill Americans or Japanese. It would not surprise me if they tried that before our presidential election…

    Especially now that Obama has publicly insulted the Kim clan’s current head by name….

    And the timing of this – and the fact Obama used his proper name – makes me add to the list of things that don’t make a lot of sense right now — unless the Establishment wants things to happen to turn American society into a pressure cooker this year…

    1. Chia Cha

      Dr. P explained you power of US financial sector. Look that, forget Bush.

      First of all NK is much stronger then Italy or Germany, and richer then Mexico.
      Mexico is joke, NK have own satellites in space, balistic rockets, nuclear weapons, and all that with 22M people, while Mexico have 140m. Capitalist Haiti, Mexico or Nigeria with 10B people each could not match up with NK in 500 years.
      Just some perspective should be given to light it up little more, USA cannot do anything to NK what China does not like, because then you have war with China. And then Putin is on move to decide is that going to be world war. USA is right now pulling testicles of Chinese so hard in SC sea, but Chinese do not give a dam.
      USA is provoking Russia, but Putin froze that up in Ukraine 🙂
      Now they think, lets knock knock little on North Korea 🙂

        1. Chia Cha

          minute 28:00, you need BE to serve coffe in starbucks …
          https://www.youtube.com/watch?v=c5458AROrLs

          and someone tells me stories about north korea, rofl…

  3. Rick

    Dr Steve, What’s your opinion on this book ‘The People vs Muhammad’ which became Amazon’s #1 Best Seller in ‘History of Religion & Politics’ and in ‘Church & State Religious Studies’ In July 2016?
    https://adinakutnicki.com/2016/07/06/the-people-vs-muhammad-is-the-nail-in-islams-coffin-spread-it-wide-far-videos-commentary-by-adina-kutnicki/

  4. James Moran

    Whether or not the world realizes it, a strong North Korea is vital. Their capacity for hilarity is sorely needed in these dark times (cough cough)…

  5. Chia Cha

    I have aplied to job in Bank of America, some position in London, job for Exotics and derivatives. I hope they will be greedy enough to employ me. Unless some idiot on lower position who does not get it, fail to notice my genius. Yes I wrote in CV that i hate capitalism… and that i refuse to write CV in a way who they like it. But hey who knows. Maybe they are not so stupid. I said that I will not work for less then 250,000 per year.

  6. Learn From History

    Big Ponzi Scheme.? …creatio ex nihilio…don’t worry Chia, Greenspan assured us that when we run out of money, “we will print more”.

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