By Charles Hugh Smith, DailyFinance

NEW YORK ( DailyFinance) -- It's the nature of major news stories to ebb and flow, rising to the headlines and then slipping out of the spotlight. But even if they fade from attention, a handful of long-term issues with the potential to disrupt the U.S. economy and global recovery will continue to play out throughout 2011. Despite the healthy jump stock prices made on the first day of trading this year, here are some stories that investors are better off not losing sight of during the next 12 months.

North Korea: After decades of stagnation and horrific hardship for its citizens, North Korea has reached a new and potentially dangerous juncture: Its aging dictator Kim Jong-Il is handing the reins of power to his son Kim Jong-Un, an untested leader with little military and political experience.
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Transitions of political power in closed societies ruled by dictatorships are notoriously unpredictable. Adding to the potential for unexpected crises is South Korea's abandonment of its policy of appeasing the North's saber-rattling. For the past 15 years, South Korea and its ally, the U.S., have responded to North Korean aggression with subsidies that included grain shipments and increased trade.

South Korean patience has finally run out, and now North Korea has hit a wall. The strategy of aggression that has always paid handsome dividends for it has finally run dry. The problem is North Korea has no plan B. Without subsidies from China and the West, its fragile economy has nowhere to go but down.

Now, South Korea has proposed a plan for peaceful reunion of the North and South, along the model of China and Hong Kong -- one country but two systems. But there can still only be one central leadership, and the South has made it clear that it won't be the North. North Korea may reject that model in favor of ramping up its aggression in an attempt to force more concessions from the South and its Western allies.

If the North pursues a strategy of increasingly bellicose and deadly military provocations, the chances for miscalculation and wider conflict increase dramatically. Such a conflict would greatly damage trade and diplomatic relations between China, Japan, South Korea and the U.S.