When news broke late Sunday night that North Korean dictator Kim Jong Il had died, there was pretty much an instant sense of uncertainty and nervousness in Asian markets. The reason for this unease is not hard to ascertain; North Korea is a desperately poor country with a huge military. If the new leader, Kim Jong Un cannot quickly cement his power and authority, there is the threat and risk of civil war, military provocation against South Korea and/or Japan, and a continuation (or escalation) of the brinksmanship that Kim Jong Il used to keep world powers ill at ease.
What will this change in power mean for the markets, both in Asia and in the United States?
Markets Generally Hate Uncertainty
It was not surprising to see markets in South Korea and Japan sell off on the news of this change in North Korea. More than anything, markets hate uncertainty and there is now a gigantic red question mark where North Korean policy is now concerned. To that end, it is perhaps a bit surprising that gold was barely up as of early Monday morning.
To read the full column, please follow this link:
http://financialedge.investopedia.com/financial-edge/1211/Kim-Jong-Ils-Death-And-The-Markets.aspx#axzz1h0AbjDPb
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