Last Updated : 02 April 2013 at 17:10 IST
Jim Rogers is unsurprisingly short on North Korea and long on North Korean coins. Last Saturday, he, through his assistant, bought 13 North Korean coins from a collection of 20 one-ounce gold coins featuring mostly century-old North Korean generals.
“At some point down the line, North Korea will cease existing as a country. Then the value of the coins will go up,” Rogers had said previously and famously. “Coins and stamps are the only way I can invest in North Korea.” he had said.
“He wanted to buy more, but we only had 13 [gold coins] left,” said a representative of state-owned Korea Pugang Coins.
The company had put on sale gold coins at the rate of $2,015 even as silver coins' prices ruled at $70 a piece. Neither Jim, nor his assistant were immediately available for comments.
The question, however lingers:
What would cause the downfall of North Korea? Guessing history is a thankless job. But if you can guess the markets, you can guess history.
North Korea—a riddle, wrapped in mystery, inside an enigma-- is a land of nursed delusions. Behind an iron curtain, the country reportedly survives on aid. But it may not be quite so, says a retired officer of Indian Foreign Service.
“North Korea is pretending that it is starving and thereby eliciting sympathies from around the world. The food they receive in aid actually helps them divert their resources to pursue nuclear ambitions.” he said.
That is one of the reasons why North Korea continues to remain clam. If you have a starving population you can hardly keep them tamed and preserve them in delusion.
“Besides, the army of North Korea and its leadership is firmly behind Kim Jong-un, the third generation leader of North Korea.” the IFS hand said.
There can never be a people revolt in North Korea as long as China remains supportive of the North Korean regime, he pointed out. Because China is the main arms supplier to North Korea, the power of North Korean army and its leadership and thereby the power of Kim Jong-un is a function of China's support for North Korea.
Now, this cannot continue for ever.
China, had to take a firm stand when North Korea threatened the US with nuclear strikes. If Pyongyang continues to be an irritant, then China may choose to dilute the support it gives to North Korea. Now, if this occurs in the context of thaw in US-China relationship, North Korea runs an increasing risk of losing its status as Beijing's pet.
But that scenario would mature only when US would decide it had enough with its Asia pivot. That is again an unlikely scenario unless something to the effect of a depression strike US forcing it to cut down its military spending drastically. This in turn depends a lot on the Eurozone economic situation and China's well being as an economic super power along with the prosperity of BRICS nations.
That is the broader picture.
But any outrageous moves by North Korea—like firing of a missile etc to Sourth Korea--would antagonize Beijing completely. They may withdraw support to the North Korean regime and one could see a domino effect culminating in the eventual displacement of North Korean supremo. Perhaps that explains the current stalemate limited to rhetoric by both Koreas. Given the delicate situation and gigantic stakes involved, it is important who would fire the first bullet and who does not.
Ultimately, the nation of delusions may probably be its own killer.
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