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North Korea: Is the worst yet to come?

Analysis: An ailing "Great Leader," a regime against the ropes and a sense of nuclear impunity.

South Korean soldier
A South Korean soldier stands inside of the Military Armistice Commission conference room at the truce village of Panmunjom in the demilitarized zone that separates the two Koreas, July 14, 2010. North Korea has threatened "nuclear deterrent" should the U.S. and South Korea go ahead with planned military exercises this weekend in the Sea of Japan. (Kim Jae Hwan/AFP/Getty Images)

NEW YORK — North Korea has ramped up its rhetoric once again.

Yesterday, it promised a "physical response" if South Korea and the United States went ahead with planned military exercises this weekend. Today, North Korea went a step further, saying it would use "nuclear deterrent" and launch a "retaliatory sacred war" in response to the exercises in the Sea of Japan.

The exercises themselves are a reaction to the North's alleged sinking of the South Korean warship, the Cheonan, in March. The North vehemently denies the allegations and calls the military exercises "unpardonable" provocation for again being wrongly blamed.

Of course, North Korea routinely threatens war. This time may be no different.

But ever since stories of North Korean leader Kim Jong Il’s imminent demise after a stroke began circulating last year, Korea watchers have been reading into the regime’s every move.

A botched currency “reform” earlier this year, which led to suicides and bankrupted what passes for the middle class in the country, prompted the executions of several old Kim loyalists — widely viewed as scapegoats by outside analysts.

More importantly, it led Kim’s regime to issue an unprecedented apology, setting analysts to work weighing various theories, some of whom see a power struggle developing among the ruling elite, and all of which seem to suggest the regime may be on its last legs.

New Yorker writer Barbara Demick put it this week, “being a totalitarian regime means never having to say you're sorry.”

The U.S. heightened sanctions against North Korea go into effect on Sunday, and will target luxury goods purchases by the secretive elite that serve as the dictatorial state’s jailors. But don’t expect much to come of the move, which represents about the least the U.S. could do in retaliation for an act of war against its ally in the South.

What’s a few less magnums of champagne to a totalitarian regime that feels it can, with impunity, thumb its nose at the world after sinking — in South Korean waters — a South Korean warship, killing all 46 sailors?

Harrowing Scenarios

Chaos and mayhem behind Kim’s iron curtain has always been outside the reach of the international community — even years of international food and energy donations have failed to convince the regime to lessen its repression.

Surveillance satellites and the accounts of defectors who make it across the Yalu and Tumen rivers to China indicate that a network of gulags in the north of the country is going strong. Work almost certainly continues on the country’s plutonium and uranium based nuclear arsenal, and international aid agencies fear rural residents — thanks in part to the botched currency devaluation — may be nearing a level of destitution not seen since 1997, when famine killed up to 3 million people.

Now, however, it’s the events happening outside the North’s borders that have South Korean and American officials on edge. The attack on the Cheonan in March, coupled with the uncertain signals coming out of Pyongyang, may have been a game-changer. This week, Secretary of State Hillary Clinton and Defense Secretary Bill Gates both visited South Korea and reports suggest the two sides agreed that any future such attack would have to bring a direct military response.

"If the United States and South Korea do nothing should there be a further attack, the message they send is that the North's nuclear weapons give them the ability to act with impunity in the region,” said Ian Bremmer, president of the Eurasia Group, a political risk consultancy. “And China, meanwhile, genuinely feels it has lost whatever leverage it had on Pyongyang."