"These advances in ballistic-missile delivery systems, coupled with developments in nuclear technology ... are in line with North Korea's stated objective of being able to strike the U.S. homeland."
That report from the Pentagon brings some chilling news: North Korea is getting closer to its goal of building a nuclear missile capable of reaching the continental United States. Although the report didn't give an exact time of when such a threat would come online, it did say it could happen "soon."
While that news sounds ominous, is it really something America should be concerned about? In the grand scheme of things, is North Korea a serious threat, or simply a boon for defense contractors and their stocks?
The tantrum heard 'round the world
North Korea hasn't been on good terms with America for some time, but the tension that was already there skyrocketed in December, when North Korea launched a satellite into space -- proof that North Korea was actively pursuing long-range missile capabilities.
Following the launch, and the resulting sanctions from the United Nations, North Korea's leader, Kim Jong-un, grew more belligerent by responding to increased sanctions with escalating threats, including promises to destroy America and South Korea.
Understandably, South Korea responded by purchasing 30 attack helicopters from Boeing (NYSE:BA); actively pursuing fighter-jet options from Lockheed Martin (NYSE:LMT), BAE Systems (NASDAQOTH:BAESY), and Boeing; and carrying out military drills, despite protests from North Korea.
A barking Chihuahua?
Yes, the threats from North Korea sound bad, and South Korea's response makes it sound as if an out-and-out war could break out any second -- and that's partly true; reason and sanity aren't exactly Kim's strong suit. But how likely is it that such an attack would prove serious to America? Not very, I'd argue. North Korea's pursuit of a nuclear weapon is a threat; don't get me wrong, but America has been armed with nukes for years.
Moreover, thanks to Northrop Grumman's (NYSE:NOC) Global Hawk, Boeing's Ground-Based Interceptors, Raytheon's (NYSE:RTN) SM-3 defense system, and Lockheed's Aegis Missile Defense System, America's powerhouse of missile technology would be pitted against a nation that's still learning how to fire a rocket -- think of it as a Chihuahua trying to fight a German shepherd: One bite, and the Chihuahua's a goner.
So what's the big deal?
The idea that North Korea could destroy America is laughable, but that doesn't mean the threats should go unchecked. South Korea's military prowess, although superior to North Korea's, is not on the same level with the United States. More importantly, a war between the two countries wouldn't be pretty. Both have their respective backers -- the U.S. is allied with South Korea; China is allied with North Korea -- and though China has denounced Kim's threats and North Korea's pursuit of a nuclear weapon, they have been allies for a long time.
Consequently, while America may not see North Korea as a serious threat to American soil, it is a threat to the Asian region, and it could prove to be a catalyst for escalated tensions with China. As such, it's a situation that deserves to be closely monitored, although I think building a bomb shelter in the backyard is probably a bit excessive. And as bad as the situation could be, Kim Jong-un and North Korea are helping defense contractors at a tough financial time. So in some ways, we're looking at a glass-half-full situation.
Fool contributor Katie Spence owns shares of Northrop Grumman. Follow her on Twitter: @TMFKSpence. The Motley Fool owns shares of Lockheed Martin, Northrop Grumman, and Raytheon. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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