Geopolitical tensions do not have lasting impact on global markets. Not until the missile hits the fan.

The following scenario might be the basis for a ‘mock documentary’ that science-fiction film producers may wish to consider during my Aus-China Film Investment conference on Monday 4 Sept in Sydney, sponsored by HLB Mann Judd.

Key points. NK fires missile into disputed seas between Timor Leste and Australia, forces US president to resign, US Vice President takes over and global peace is within grasp.

  1. The North Korean/US stalemate continues. The US is unable to initiate military action – not until the 25 million civilians (hostages) in Seoul can be safeguarded from NK artillery retaliation.
  2. However, NK continues to provoke, while South Korea reminds the US that SK permission is required before any US military action takes place over the Korean Peninsular
  3. SK also reminds US allies (Japan, Australia etc.) the crisis is a test of the cost/benefit of a US alliance
  4. NK’s latest provocation is to fire a missile (non-explosive) – not at Guam but into the disputed seas between Australia and Timor Leste (formerly East Timor)
  5. NK claims the missile landed in waters belonging to Timor, which is not a US ally (So no ‘fire and fury’). Australia says otherwise but due to the 25 million SK hostages, the stalemate and Word War 3 continues. Fears of a market crash could ignite a market crash, but in any case, it will be short term
  6. Then rumours spread that NK has sold a dirty bomb to Islamic State. NK denies the rumour (smugly)
  7. UN sanctions means 20 million NKs are in dire poverty, verging on famine. However, not so for the 5 million NK elite and military
  8. Due to 3 generations of brain-washing, most NK’s blame the West/Japan for their suffering. They are fanatical and worship the young ‘Un and will fight and die for him. Should war break out, it will be brutal
  9. Only a Chinese oil embargo will bring NK to the negotiation table. With China non-committal, the US threatens a trade war if such an embargo is not implemented
  10. Global markets crash on worries of a trade war
  11. China wants to avoid a trade war as its ‘Belt & Road’ and ‘China mass consumption’ strategies are not yet developed enough as counter-weights to rely less on the US
  12. The US knows it will be hurt by a trade war with China, but also believes it will hurt China sooner and harder than the US due to China’s economic slow-down and debt deleveraging, while the US economy is currently on the mend
  13. China brings NK and US to negotiate. Fears of a trade war recede, markets recover
  14. NK agrees to end all missile launches but insists on keeping its nuclear weapons as a deterrent. It will permit full UN inspections
  15. NK also wants Trump to resign as President as part of the deal
  16. Trump agrees in the interest of world peace. It is presented as his greatest legacy to the world
  17. US Vice President Pence takes over, heals the wounds, and brings peace and bull markets back

Mock documentaries offer a lower production cost relative to feature films (eg. no need for expensive celebrity actors) but its success is dependent on how topical the subject matter is when the documentary is released.

The highest grossing documentary was Fahrenheit 9/11, which grossed $222 million worldwide on a production budget of $6m. (US gross was $119m, rest of world was $103m).

When it was released in 2004, China’s box office has practically zero. It is now almost as large as the US.

The inaugural Aus-China Film Investment Conference and networking event will be discussing film opportunities from China’s ‘mass consumer’ market. There are currently 70 delegates attending including more than 22 investors comprising venture capitalists, film funds & private investors.

Details at https://basispoint.com.au/events/aus-china-film-investment-conference/