A week has gone by since the North Korean nuclear test. The major capitals of the world have been busy crafting a response. World politicians and pundits alike have been busy speculating on the significance of the test and are reacting with dire predictions.
The U.N. (Useless Nations) is busy crafting nuanced language and tepid responses to a nation and leader that is universally decried as a major nuisance. Behind the facade of concern is the usual suspects protecting their own interests. The Russians and Chinese are giving lip service to the United States and Japanese concerns over Dear Leader however, they react with clear resistance to any suggestion of decisive action against North Korea.
In order to get a real sense of the significance of the North Korean test on the United States one only need look at Wall Street. The money capital of the world reacted with a big yawn. In a week in which North Korea joined the nuclear club the Dow Jones Industrial average made a new record high.
The results were similar in Europe as the Financial Times Stock Exchange reached a five and one half year high as did the DAX index in Germany. The Nikkei in Tokyo reacted with a bit of a dip on Monday however it also finished the week up over 167 points to recover quite nicely.
Oil continued its decline and gold and platinum both had a relatively quiet week. The only major market that seemed to be a bit nervous was the U.S. bond market as the thirty year treasury yield finished the week at 4.93% which was up about 20 basis points. This was more as result of inflation remarks by Fed members than it was to any goings on regarding North Korea.
So the bottom line is that the really big money around the world reacted almost without notice to the North Koreans. That reaction comes from knowing the following. According to the CIA World Fact Book, the Republic of China exports go to the following places by percentage, US 21.4%, Hong Kong 16.3%, Japan 11%, South Korea 4.6%. When and if the North Koreans and Kim Jong IL threaten China's business plan, then the Chinese will squash him like the bug he is.
