What do you think the consequence would be to the global economic order if one of its three pillars just crumbles away? The bond and stock markets would flush down the toilet; the major financial houses would unravel at the seams; the U.S. real estate market would collapse; unemployment would skyrocket; government services would become inoperable. Moreover, how do you think the United States would maintain its awesome military establishment in the midst of a cataclysmic depression?
As I stated, the outcome depends on what Kim Jong Il intends. If he refuses a resolution short of nuclear capability (which they already have, in any case - so I mean declared capability) then there's simply nothing to be done but accommodate that. The whole reason we're ostensibly going to war in Iraq is to prevent a similar intractable scenario. I fully expect a negotiated resolution of some kind by whatever route; as mentioned, I'll be shocked otherwise.
This current crisis still have 4-6 months to play out. During that time, there will be at least 3-4 more steps of escalation and counterescalation. There is a possiblity of internal N. Korean power struggle because people inside the N. Korean regime are not suicidal albeit ruthless.
If America can convince many in N. Korean leadership the certain annhilation when they cross a certain line in the sand and back it up with credible military deployments, N. Korea can accomodate real concessions, not the nominal vow to "freeze development" while they continue development in the third country like Pakistan, Libya, or Iran just as Germany did after WWI to evade the Versailles treary.
I can envision a situation like Cuban missile crisis or Ax murder incident in 1976 where America was fully ready to go all the way to the finish. And N. Korea backs off and settles the conflict with U.S.
However, if N. Korea openly and blatantly flaunt their finished nuke, all the consideration of economy will go out to the window however many business leaders wail about it.
I do not rule out negotiated settlement of some kind if N. Korea do not openly cross the nuclear threshold. But it will be after a major scare. N. Korea does not go away without one.