The Investment Seed that Helped North Korea
Enter the Nuclear Power Club
A Special Alert for Dynamic Market Alert
by Todd Schoenberger
Editor, Diligent Investor
October 9, 2006

I'm beginning to sense another wave of geopolitical activity as we wake up this morning to news that North Korea has successfully detonated a nuclear bomb in an underground testing facility.  American officials haven’t been able to confirm the blast, but according to the United States Geological Survey, a tremor of 4.2 magnitude was detected on the Korean Peninsula.

The test, which took place on Sunday at 10:30PM New York Time, is disturbing because it is another episode of a brazen President dismissing threats from the United Nations.  Just two days ago, the U.N. Security Council warned the North Koreans that any test would lead to severe consequences, and that followed sanctions from the missile test that took place in July.

Just like Iranian President Mahmoud Ahmadinejad and his country’s uranium-enrichment program, the United Nations Security Council has tried to flex its muscles that it means business when it tells a country to stop production of nuclear weapons.  Instead, the Security Council leaves with egg on its face and is fast becoming irrelevant as nothing more than a group of people who receive free perks while meeting in New York City.

Now, the North Koreans have been inducted into a very privileged group — the nuclear power club.  Like it or not, the North Koreans are one of only eight countries to successfully test a nuclear bomb.  And, as one of the most arguably unstable countries to possess the mass destructive weapon, everyone needs to be worried.

OPEC Says Oil is too Low

There’s another huge problem developing in the world that, unfortunately, is going to be printed in the back pages because it doesn’t seem as dire as the North Korean test: OPEC members are cutting production.

The eleven members of OPEC have scheduled an emergency meeting for today to discuss falling oil prices because they believe oil priced at $60 is too low.  Can you believe this?  Too low compared to what? 

The eleven member organization includes a couple of America’s biggest enemies: Venezuela and Iran.  And, if they are thinking oil is priced too low, then they will do whatever it takes to spike prices so they can increase their revenue streams to do who knows what.

How will OPEC lift prices...by cutting production.  Speculation is the eleven members are going to cut daily supplies by 4 percent.  A 4 percent cut equals just about 800,000 barrels a day, and add that figure to the already 170,000 cut announced last week by Nigeria and Venezuela, and you quickly have a daily supply number that equals daily demand.

Currently, the world consumes 84 million barrels of oil a day and the world is pumping 85 million barrels out of the earth each day.  If there is a total production cut of 970,000 barrels, the supply and demand numbers become virtually equal.

Now, consider the antics taking place in North Korea, or better yet, just think if oil demand jumps in the next few months — what do you think is going to happen to the price of oil?

Well, it definitely will move higher and appease our enemies, which will permit them to push further with whatever anti-American or anti-Israel mission they want and fund proxy armies, like Hezbollah.

This is why oil is the ultimate weapon — not nuclear bombs. One has to wonder if North Korean leader Kim Jong-il is looking to cut a deal with Chavez or Ahmadinejad and hand over some of these nuclear “secrets” for a slice of the oil distribution pie.  After all, the North Koreans can use the money and they hold the recipe for the secret sauce that all of these other countries so desire.

According to the Washington Post, Bush administration officials were on conference calls late into the night with other world leaders to figure out what to do with North Korea.  This is a dire situation that needs to be resolved immediately or the world will quickly become a ticking time bomb.

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North Korea Drops the N-Bomb

Copyright 2006, The Taipan Group, LLC, Diligent Investor, and Dynamic Market Alert, 808 St. Paul St., Baltimore, MD 21202
All rights reserved. No part of this report may be reproduced or placed on any electronic medium without written permission from the publisher. Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed.