Interview Question- What would happen to the world economy if US throws nuclear bombs at North Korea?
I was asked this in JPMC. Here's what I told them-
There will be capital flight from US as the confidence in the economy goes down because of fear of retaliation from North Korea and investors would flee to safer haven like Europe. This would lead to depreciation in USD.
After that, even South Korean won will take a hit as that region would be in frenzy.
Then they asked me what commodity markets would be affected.
At this point I fumbled and said all the sectors would take a hit. What could have been an ideal answer?
North Korea, led by chief financial officer Kim Kong Un, is ranked "worlds best economy" for the 49th year in a row. The United States, led by former dustpan vendor Janet Yellen, ranks 87th.
Can you elaborate on the answer? How would commodities be affected?
I can't say for sure what would happen capital wise, but I know that the commodity response would be wrong. There is a strong case to be made that this case would drag the world into a major war.
Provided that we don't throw the world into a nuclear holocaust, there are a handful of countries that would likely jump into war. China, USA, Japan, NK, and SK come to mind. Russia might hop in because they would see a chance to strike the USA when we're weak.
It's been so long since our country has had a "total war" that people forget about steel shortages and food shortages. This happened across the world.
War isn't cheap.
So, all these countries would be affected and what specifically do you think will happen to trade? Oil, steel etc?
The worse case scenario is a conflagration between China and the United States, destruction of the Japanese and SK economies, massive spike in energy prices, freezing of trade and capital flows and uncertainty for the next few decades.
Delilah12 I believe this question is a way for them to understand your thought process rather than to quiz you on how well you understand commodities in East Asia.
With this being said, my first thought is to think about the location of Korea as a whole. Korea splits the water between China and Japan. For this reason, I think it is safe to assume that a lot of trade routes to and from China, Japan and even Russia run through Korea's ports and/or the water surrounding Korea. North Korea itself is not a huge player in commodities, but South Korea, Japan and China heavily import commodities such as in crude oil, coal and iron ore. China and Japan also export a ton of steel. These are just points to keep in mind, but I think the important part in answering this question is demonstrating that you have the ability to think critically.
Yes, I should have talked them through what I was thinking. I really have low thinking on the feet capability in interviews and tend to blurt out stuff. I wonder if you know any work-around for that. :/
I can't tell you how to think, but what I can tell you is that it helps to take a deep breath and slow down. As you said, you should have talked them through what you were thinking. If you slow down and take the time to collect your thoughts, then you will be able to communicate them clearly. Relax. They do not want to see how fast you can answer the question, they want to see how well you can answer the question. Also, have confidence. You are at JPM in front of analysts, VPs and MDs interviewing for a high-paying and mentally-demanding job for a reason, so act like it and trust your thought-process.
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