How to North Korea-Proof Your Investment PortfolioPaul-Martin Foss
The ongoing war of words between North Korean dictator Kim Jong Un and US President Donald Trump has been escalating in recent days, with North Korea threatening to attack Guam with nuclear weapons, and President Trump threatening to unleash fire and fury that the world has never seen before. While some bombast is to be expected from those two men, there is an undeniable fear that they both could mean what they say. An all-out war between the United States and North Korea would be catastrophic and would result in thousands of casualties. Even in a best-case scenario with a relatively quick American victory, the cost in terms of human life and reduced trade would set the world economy back significantly. So what can you do to prepare your investment portfolio and hedge against that conflict?
The first thing to do is to increase your portfolio’s allocation of gold and silver. Gold and silver have always acted as stores of value in times of crisis and will continue to do so in any coming crises. Conflict with North Korea may be a causal factor in bursting the stock bubble, so the sooner you invest in precious metals the better.
The next thing to think about is increasing your stores of cash. Cash will serve you a lot better than stocks well in the event of an all-out war. You’ll obviously want to think through the tax ramifications of selling financial assets first before you make that move.
In the worst-case scenario in which North Korea is able to reach the continental United States with a ballistic missile and launch either a nuclear or an EMP attack, you’ll want to make sure that some of that gold and silver is held in your physical possession. In the event that you survive a nuclear attack, or in the event of an EMP attack, vast amounts of infrastructure will go down. That means no electricity for wide swaths of the country, no phones, no ability to pump gas, etc. It will be like going back to the 19th century in the blink of an eye.
The amount of societal upheaval will be tremendous, and it will last for quite a while. Being prepared by having some gold and silver coins and a decent amount of cash on hand to buy food and supplies is not a bad idea. This time around Kim Jong Un might just be crazy enough to do something foolish and dangerous.