The situation with North Korea, which was seeing significant progress throughout the course of 2019, has been almost entirely pushed to the sidelines, as President Trump and his administration has been forced into an all out defensive position, due the ongoing impeachment proceedings.
This has frustrated North Korea, who have stated that they "are no longer bound by nuclear test commitments" and have thus begun to resume their programs of old.
And even though it is highly likely that President Trump won't be impeached by the Republican controlled Senate, and given the fact that the odds are now favoring the likelihood that he and the Republican party will win re-election, this does not change the reality that the political divide, which is possibly the greatest it has been since the American Civil War, is only going to grow, not shrink moving forward.
These recent proceedings have been effective in bogging down the Trump administration, but as can be seen from the deteriorating situation with North Korea, it has come at a cost, regardless of which side of the political aisle you find yourself on.
In other parts of the world, the news has been no better, as seen with the recent violent hostilities between the United States and Iran, which for a moment stood on the brink of an all out shooting war and of which still stands on the precipice, with only a spark needed to re-ignite the conflict.
Finally, throughout the course of 2019 we had the ongoing trade wars between the United States and China, which racked both countries economies, hitting key sectors and forcing governments on both sides to take action, supporting the industries that were hurting most.
However, even though that situation has settled down and progress is now being made in regards to future trade deals, China has once again found itself in a dire situation with the recent outbreak of the deadly coronavirus, which has forced the country to lock down millions of people and place countless under quarantine.
Additionally, it appears that the virus is not contained and reports have indicating that it is spreading across the globe, with cases already being reported within the United States.
In response to this chain of dire events, the Bulletin of Atomic Scientist, who are responsible for maintaining the infamous "Doomsday Clock" have held a press conference, taking to the airwaves to address these concerns, plus many others that they believe pose a threat to humanity.
Their decision to adjust the "Doomsday Clock" to 100 seconds from midnight should not have anyone up in arms and panicking, as it does not mean that the world is going to end overnight, however, it should be taken as a dire warning and not completely and utterly ignored.
As stated by the Bulletin of Atomic Scientists;
“Humanity continues to face two simultaneous existential dangers—nuclear war and climate change—that are compounded by a threat multiplier, cyber-enabled information warfare, that undercuts society’s ability to respond. The international security situation is dire, not just because these threats exist, but because world leaders have allowed the international political infrastructure for managing them to erode.”
This adjustment brings the clock to its closest point to midnight since it was created in 1947, with the next closest being 2 minutes from midnight in 1953, during the height of the cold war, in which the threat of all out nuclear war was at a fever pitch.
(Chart source, Oilprice.com)
Markets across the globe were rocked today, with this announcement, plus the outbreak in China causing widespread fear throughout exchanges, with oil, luxury goods and travel shares taking the biggest hits.
(Chart source, goldprice.org)
Meanwhile, gold and silver bullion, while increasing slightly in price throughout today's trading session, have not fully reflected these new heightened risk levels.
Hopefully, moving forward the "Doomsday Clock" will turn back in time, as global risk levels and fears once again recede.
However, for the time being the risks are out there and are currently something that need to be accounted for in the short to medium term, until cooler heads once again prevail and the dangers are contained.
Move forward with caution and keep both eyes and ears open, volatility will likely only increase as we move throughout what I believe is going to be a very tumultuous 2020.
- As first seen on the Sprott Money Blog
