North Korea must be one of the strangest sovereign States on the planet. Its official leader is dead, because Kim Il-Sung was supposed to live forever. The Party coped with his entirely inevitable event by pretending nothing had happened. Thus the current Supreme Leader of the country (his son Kim Jong-Il) is supreme and yet de facto at one and the same time.

This also makes it the world’s only communist State with a royal family. And what a family. Kim’s been estranged from his first wife for donkeys years. His first mistress was a former film-star; she was married when they met and so Kim instructed her husband to divorce his wife. His second was a naughty Japanese dancer, and the third his secretary. The Windsors seem tame by comparison.

Kim sports a hairstyle that would’ve guaranteed a place in the Ronettes were it not for his gender and colour challenges. His other trademarks are Elvis sunglasses and a white winter parka, and he has only recently begun making live appearances. Between 2003 and 2009, he made no public appearanaces at all, causing the CIA to ponder if North Korea might be the only place on Earth with two dead leaders.

The North Korean State has been at war with the South for nearly sixty years, because the Peace conference of 1953 didn’t actually get round to signing a peace treaty. Although many people may not realise it, the US maintains a large military force there. This may have something to do with the fact that North Korea has the fourth largest standing army in the world.

An astonishing one in four North Koreans is in the armed forces, making it easily the biggest industry in the country. If the US had a similar proportion called to the colours, its standing army would be a hundred and twenty million strong.

However, as this is clearly nowhere near enough of a defence against the invasive tendencies of the imperialist running-dog lackeys to the south, the Kims have given huge emphasis (and most of the country’s gdp left after the army had finished with it) to the development of a nuclear capacity. The chances are that it’s the army who holds the purse-strings – you can smell the odd clue in the last three paragraphs – and if that’s true, then its leaders seem a little slapdash.

For example, the country has carried out several missile tests, and these seem to be conducted on the loose principle of “let’s chuck it in the air and see what happens”. The last test in 2009 consisted of a rocket in three-stages, all of which narrowly missed reasonably important countries when the mission went wrong after about fifteen minutes. Soon after the launch, NK State Radio told the world this was to be a satellite, but that turned out to be just a prank after all.

In the light of this and other disturbing incidents, the international community recently got tantilisingly close to giving the North Koreans a huge amount of free energy in return for closing down and sealing its nuclear reactor. The talks went swimmingly until it came to the Koreans fulfilling their side of the deal, at which point they lost interest. Then in 2010 (as most of us know by now) one of their subs sank a South Korean vessel. It was probably another joke, or an exercise (“let’s see if our torpedoes work in real life”) or just the sub’s commander having a bad day. Whatever.

The south having salvaged the torpedo and noticed ‘Made in Pyonyang’ on it, the North Koreans denied any involvement in the incident. As a retaliation for this outrageous accusation, the communists closed all borders and mobilised its army. And that’s where we are today.

All politicians live in a permanent state of unreality, but to be fair, the spectrum is very broad. At one end is David Cameron (thinks he’s a Tory), in the middle is David Miliband (thinks he’s popular) and heading towards the other half of the rainbow are Gordon Brown, Vanessa Redgrave and Nigel Farage. Toppling off the very end four million light years away is Kim Il Sung II.

Most of the political community suffer from nothing more harmful than a belief they might be useful in some way; the North Korean leadership’s case is far more serious, in that they don’t show any awareness at all of being madder than a box of monkeys.

Now the diplomatic approach used by the West with regard to leaders in la-la land employs two screening questions before any action is taken :

1. Do they have anything we want?
2. Can they do us any harm?

If the answers are in the negative, no action is taken.

Thus you can ignore headcases when there’s no money or oil involved, no nuclear missiles, and no global economy at stake. Any two out of those four, however, and the US is going to be there (no matter where there is) faster than you could abort a North Korean missile test. So it is that Hillary Clinton has arrived on the spot to pledge loyalty to everyone she meets, and ensure the Chinese are on-message.

It’s pretty damned hard to figure out, most of the time, when the Chinese are on message, because they’re inscrutable and write funny. But they are smart. In private, the Beijing administration wishes the North Korean Kim dynasty would just go away. There’s no point wishing them dead, because that doesn’t seem to make any difference. Also the Chinese sabre-rattling days are long gone: they don’t need to do that any more, and it’s bad for business. By the time they get around to annexing Africa, the West will be too busy with another banking bailout to bother about it anyway.

Secretary Clinton said yesterday after meeting the Chinese that “they understand our problem with North Korea”, but it’d be odd if they didn’t, given that they’ve got it too. As yet, I can’t see any sign that anyone has a solution to any of this – any more than anyone knows what to do about Ahmadinnejhad in Iran, or Mugabe in Zimbabwe, Zuma in South Africa or the old veteran himself, Gadaffi in Libya.

As Reuters’ Hutchinson & Hadas wrote yesterday, it all ‘adds to the impression of a world out of control’. This is not a phrase investors like: there are enough steering wheels and brakes missing as it is. Both the South Korean currency (the Won) and stock markets have fallen 8% since the North started playing battleships for real, but this isn’t the issue for the West – because at 1.5% of global GDP, the South Koreans tick no boxes at all. The issue is, as always, business.

To be a little more serious in closing, we should ask why the North has chosen now to start being silly again. I suspect the answer is that Kim wants to ensure his third son succeeds him. To enable this process, he needs help to keep his People happy, the armed forces having turned out to be powerful, but a lousy export prospect. The West is financially worried too, and wants to keep Asia stable: so Kim figures that now is a good time for some blackmail – “You give me lots of beads for the masses, I promise to be a good boy”.

While the US and China may diverge on many things, they both agree on the need to avoid further North Korean belligerence on the peninsula….so this would seem like an easy way to solve the problem. Except that this is today’s solution becoming tomorrow’s even bigger problem. There has never been a needy dictator in history who didn’t keep coming back for more, and the regime in the North clearly thinks its piddling nuclear capacity makes it immune to attack.

We need to disabuse them of this deluded notion, and fast: otherwise next time, they might have a more than piddling capability.