China cornering the market on rare earth elements

Warning: adult language!



Put this in the "unintended consequences of the anthropogenic global warming hoax" bin. There is no doubt we should diversify away from petro-fueled middle eastern countries for our energy sources--for national security and economic reasons. But the transition should be orderly and measured. Because if the carbon-reducing extremist crowd has their way, the US will be plundered into the abyss.

Green technologies actually require natural resource elements that must be mined--tons of it, in fact. They are unfamiliar to most, except for those who can recite from the Periodic Table of the Elements. Rare earth elements (REE) like Neodymium, Lanthanum, Terbium, and Dysprosium are used in diverse applications as solar, wind, and eletric car batteries. The problem is China controls 97% of the world's supply of these REE.

http://www.independent.co.uk/news/world/asia/concern-as-china-clamps-down-on-rare-earth-exports-1855387.html

So while China may outwardly reject carbon credit proposals, which aim to punish violators of carbon-emission thresholds (the "polluters"), they have hedged themselves by ensuring they control the components necessary for enabling green technologies.

"This is chess, it ain't checkers!"

Good news, bad news...

The good news is that oil and fuel prices have backed down, as I predicted recently. Further good news indicates Americans are driving less, reducing our carbon emissions. The bad news is that the reduced tax revenue from fuel sales has left the federal and state governments even more cash-strapped.

Another gem I saw on the news is that our superhero Governor has mandated all non-emergency response state employees will now earn the minimum Federal wage of $6.55 an hour. That paycheck should really help pay the variable mortgage about to reset--not.

The US is a mess, and a recent trip by a friend to Australia illuminates the growing gap, as the land Down Under is experiencing a bull market in natural resources, fueled by booming economies in China and India. Australia is clean, modern, and their citizens are in good spirits, buoyed by a tourism boom as well. Kinda reminds me of us in the late 90's.

Meanwhile, China and India are aggressively securing energy and natural resources, acquiring equity stakes in suppliers, setting the stage for the US to be forced to buy at spot prices.

The Fed has to continue printing dollars in order to sustain an unsustainable balance of economic growth and fiscal responsibility. A money manager quipped that he senses the public believes we're in the late innings of this recovery, which is true--but not when you consider it's a 7-game World Series, not a one-game wonder. In other words, we should continue to have record foreclosures and bankruptcies for a couple more years before we turn this tanker around. The good news is that equity prices should rebound a year before the actual bottom, as the stock market is a forward discounting mechanism.