Stansberry Research: Could Your Investments be Affected by the North Korean Summit?

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In the latest installment of their weekly podcast, the Stansberry Investor Hour, Stansberry Research discusses East Asian policy. The weekly show, which focuses on issues related to investment advice and world financial markets, once again proves its worth with an insightful look at the delicate geopolitical situation. In addition to the show’s hosts, Buck Sexton and Porter Stansberry, the episode features guest Stephen Yates, former deputy national security advisor to Vice President Dick Cheney.

 

Company History

Before diving into the episode, let’s first take a look at Stansberry Research, the company responsible for its production. Founded in 1999 by Porter Stansberry, the financial information publisher has a reputation for forward-thinking advice that pushes the envelope. They’ve found a substantial audience with a subscriber base of over 500,000 people. In addition to weekly podcasts, the company produces numerous newsletters and a host of other investment advice. Porter Stansberry originally operated the company as a one-man show almost twenty years ago. These days, over twenty analysts make up the team, each with a unique take on markets both domestic and abroad.

 

Diversity in NYC High Schools

This week’s episode opens with a discussion of recent comments by New York City Mayor Bill de Blasio. He voiced a desire to place a higher priority on diversity in some of the city’s elite public high schools. Host Buck Sexton attended one of the schools in question. He rejects the need for such a priority, stating that the schools have traditionally been merit-based institutions. Porter Stansberry agrees that schools are most successful when they offer an equal playing field based on academic abilities.

 

North Korean Summit

The podcasters then shift to a discussion of the summit meeting between Donald Trump and Kim Jong-un. To add an expert perspective to the discussion, the hosts welcome guest Stephen Yates. Yates brings a host of insights to the discussion thanks to his experience in the White House and resultant knowledge of East Asian geopolitics.

At first, the speakers focus on the summit itself. The two heads of state met for a one-on-one exchange of ideas, which is in contrast to past communication between the two countries. Representatives of the U.S. and North Korea traditionally conduct their relationship through back channels and third parties. President Trump aimed to lift the veil on North Korea’s priorities while simultaneously expressing the goals of the United States. Even a more complete understanding of the North Korean leader would have been a positive takeaway.

In the past, the United States’ relationship with China aided in negotiations with North Korea, as the two East Asian countries maintain a cordial relationship. This newfound ability to connect without China’s involvement, however, has opened the door to a host of new diplomatic negotiations.

 

Historical Relationship with North Korea

Stephen Yates provides a first-hand look at the changes to North Korean policy over the years. When Stansberry Research hosts asked Yates about past attempts to connect with the country, he claims that they were successful because of the political climate at the time. However, past nuclear disarmament deals fell apart, partially because of China’s influence and the unreliability of the North Korean leader. With those aspects in mind, Yates characterizes the present-day meeting as an unprecedented opportunity to accomplish shared goals and open up communication between the countries.

 

Relations Between U.S. and China

Inextricably related to the North Korean summit is the relationship between the United States and China. Historically, China has acted as one of the sole U.S. connections to North Korea and has encouraged the separation between North and South Korea, as it served Chinese interests. With hostility between North Korea and the U.S. beginning to thaw, along with newly-imposed trade restrictions on China, the hosts wonder what is in store for relations between the two superpowers.

Yates states that the relationship between the U.S. and China has been historically complicated owing to China’s ascending status in recent decades. He likens their former relationship to that of a parent and toddler, wherein it’s incumbent upon the parent not to react to every tantrum. Traditionally, the United States has been lax toward China when it comes to issues of trade, recognizing that their status as a burgeoning world power confers upon these certain leniencies. But as the political situation in Asia changes and negotiations between the U.S. and North Korea chip away at China’s influence, Yates forecasts that we may see a shift in United States policy toward China. Though he thinks this shift unlikely to culminate in a trade war, it will certainly affect world economies and the way we invest in international markets.

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