Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Ethereum EIP 1559 and Raven Coin - 21st Apr 21
Gold, USDX: The Board is Set, the Pieces are Moving - 21st Apr 21
World Economies Need to Find a Lot More COPPER! - 21st Apr 21
DogeCoin CRASH! Time to Start Mining BOODGIE Coin! Crypto Mania 2021 - 21st Apr 21
Pausing Stocks and Gold Fireworks - 21st Apr 21
Precious Metals and Miners Start of New Longer-Term Bullish Trend - P2 - 21st Apr 21
Looking For A Mortgage Broker? Here Is How To Hire One - 21st Apr 21
Amazon AMZN Stock PRIMEDAY SALE! Trend Analysis - 20th Apr 21
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets - 20th Apr 21
Stock Market Phase Two Projection - 20th Apr 21
Are Precious Metals & Miners Starting A New Longer-Term Bullish Trend? - 20th Apr 21
Inflation: First the Gain, Then the Pain… - 20th Apr 21
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model - 19th Apr 21
Gold - You Can Win a Battle, but Still Lose the War - 19th Apr 21
Will Interest Rates Rally Further Push Gold Price Down? - 19th Apr 21
Gold Fireworks Doubt the Official Inflation Story - 19th Apr 21
YuanPay Team Discuss The Process Of Crypto Diversification - 19th Apr 21
Central Banks May Ramp Up Gold Buying - 18th Apr 21
How to Get Rid of Driveway Weeds With Just WATER! 6 Months later NO Weeds, Ultimate Killer! - 18th Apr 21
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS - 18th Apr 21
Einvestment Fund: What You Need To Know About Investments - 18th Apr 21
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

As China Stock Market Corrects, Rare Earth Crisis Takes Center Stage

Commodities / Metals & Mining Jan 10, 2011 - 01:45 PM GMT

By: Jeb_Handwerger

Commodities            History is replete with seemingly unexpected and catastrophic appearance of events that nobody saw coming.  In the old days, we have Biblical prophets who sounded clarion alarms.  Now we are past the age of prophecy.  As in historical watersheds, we suddenly find ourselves congealed in the volcanic ash of a modern Vesuvius eruption, which leads us to scratch our heads of how in the world did we come to this point with rare earth supply fears?


    Where were all the environmentalists who are aware of how rare earths are used in clean energy?  Where were the technology companies whose profitable patents are dependent upon?  Did not the most scholarly minds at our most eminent universities hear the honking of the black swans floating for all to see? I guess not.  Our academicians, business leaders and legislators were enjoying their own Rip Van Winkle reveries, while The Chinese were wide awake co-opting the rare earth arena taking control of over 97% of the world’s supply.

           It is easy to accuse The Chinese of using rare earth quotas as a form of tactical diplomacy.  However, the fault lies not in the stars but in ourselves.  We closed our rare earth production facilities years ago-in effect forfeiting the very means of manufacture to a competitor giant who no longer is sleeping.   Now they can claim that they are setting up quotas so they could prioritize their own domestic needs.  In reality highly profitable technologies are dependent upon the use of the 17 unique elements and China is trying to get a larger share of the mobile, computer and green technologies, especially now as China begins preparing for an economic slowdown from hawkish monetary policies.          

Since November, China has shown an inverted v top and is now failing at the 50 day moving average for the second time in danger of crashing through the 200 day moving average.  Wars are no longer fought on battlefields, they are fought in boardrooms.  Now China wants to take advantage of its 20 plus years of being the sole provider of heavy rare earths and monopolize a commodity whose demand is growing rapidly. 

           China at one point has looked abroad for rare earth projects and may start doing so again.  Recent legislation in the U.S. may bring more of a domestic awareness, but it is very late.  Many of these mines outside China are years away from development, especially the critical heavy rare earths in which there is no separation facility outside of China.

           The United Stated for all its vaunted scientific know-how, with all its battalions of university savants, long ago left the heavy lifting to China.  It reminds me of Rome who invited the Visigoths to enter the gates.   

           We are akin to a nation of Sonny Liston’s who never saw Ali’s knockout punch coming.  It may be hindsight to accuse our politicians and our leaders of malfeasance, not understanding the vital need of these elements by our industrial giants in the latest cutting edge technologies such as Apple for their Iphones and I-pads, GE for their wind turbines and GM for their hybrid cars and numerous applications in the US defense industry such as night-vision.     Meanwhile, our nation careens blindly seeking the way out of this morass.  The age of prophecy is no longer with us where Elijah can guide us out.  Sadly, we reenter a race which once was ours to win  as the major developers of rare earth technology decades ago and now we find ourselves four to five years behind. 

           Out of a field of many contestants in the rare earth sector, there are perhaps one or two who are close to the finish line of producing outside China.  Investing in rare earth mining is completely different than gold or silver.  Rare earths become quite costly during the separation process and very few projects may be economically viable.  Although the mania phase is upon us and investors get caught up with all the speculative rare earths promising a dream.  I would stick only to the ones who are advanced and have at least a 43-101 compliant prefeasibility study.       In late December,  I came out with a report on rare earths as I saw signs of an immediate cut in quotas.  Notice the huge volume coming in to rare earths stocks immediately after the export quota reduction.   I would wait for a secondary buypoint for long term investors.

Grab your free 30-day trial of my Members-Only Premium Stock Analysis Service NOW at:
http://goldstocktrades.com/premium-service-trial

By Jeb Handwerger

http://goldstocktrades.com

© 2010 Copyright Jeb Handwerger- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules