Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

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