Markets Must Consider the Unimaginable

Market participants are sometimes forced to consider what no one wants to think about. It is not only an unpleasant experience, but you find yourself in a mental state that is quite uncomfortable. Still, when threats are being lobbed like bombs and when the world’s political elite are off in no-man’s land casting ever more heated words, then this realm must be entered, if only to consider the dreaded behemoth rising once again, and throwing the markets into the darkest of dungeons. I speak of war.

The current U.S. president can be somewhat erratic. However, he is not without purpose. North Korea has now engaged him, and the U.S., in a worrisome battle of words that keeps escalating by the day. I have faith in the rational behavior of Donald Trump, but when a sovereign nation, North Korea, actually threatens Guam with a “ring of fire,” then miscalculations become an ever-increasing threat. As author Margaret Atwood said, “War is what happens when language fails.”