The “Writing on the Wall” is an idiomatic expression suggesting portent of doom or misfortune, according to Wikipedia. This expression is based on the story of Belshazzar's feast in the book of Daniel. During the feast, Belshazzar sees a hand writing on the wall which he believes is foretelling the fall of Babylon.
I reference this expression as it relates to the regime in North Korea and their desire to become a nuclear power. The rogue nation continues a major show of defiance to the international community as it fires a second ballistic missile over Japan, immediately after testing a nuclear bomb underground last week.
It is evident that Kim Jong Un has not seen the writing on the wall, and it is not clear that he even sees a wall. There can be no other logical explanation for his recent actions, which continue to escalate, raising the probability of a military conflict.
To some degree the international community does not see the writing on the wall, believing that there are no good options to resolve this crisis. More alarming is the belief that current UN sanctions will resolve this crisis.
As reported by CNN, “North Korean state media has yet to reference the launch, but a commentary published in the Rodong Sinmun newspaper Friday said "no matter how strong the pressure is, it doesn't work on us."
To some degree investors and traders continue to disregard potential chaos that could result from this conflict. Market sentiment continues to favor risk-on assets, resulting in new record closes for the major indices. At the same time market sentiment has shifted away from safe-haven assets such as gold. This sentiment seems to disregard current actions by North Korea and the global repercussions if this conflict continues to escalate and move to a new level.
The simple truth is that member nations of the free world do not fire missiles across another sovereign nation’s territory. The sad truth is North Korea continues to act in such a way that the inevitable writing on the wall is signaling an end to the regime of Kim Jong Un.
Wishing you as always, good trading,