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Our Secret War With China |
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“Rare Earth Elements Will Be For
China What Oil Was For Saudi Arabia”
When the Chinese Premier comes out and
makes a statement like that, you know China is serious.
With global demand of these elements
skyrocketing and China hoarding their supply, prices can only go one
way. Our resource expert Dr. Russell McDougal calls this “the next
mania”, and has already recommended two rare earth element plays to
his
Resource Windfall Speculator readers.
You can learn more about these elements
and their profit potential
here. |
What do General Electric, Microsoft, Ford, and
Dell have in common? They are all end-users of rare earth elements (REE).
Without REEs, many of these companies’ products could not be
manufactured. Think iPhones, energy efficient motors, and seatbelt
sensors. Think wind turbines, compact discs, and LEDs. These, and a
myriad of other everyday products, contain minute quantities of REEs.
With names like holmium, erbium, and
neodymium, they are not easy to remember. But they play a vital role in
modern life and technology. Like any commodity, the prices of REEs are
dependent on supply and demand.
So here are the basics: Supply is constrained.
Demand is growing. And that means huge profits for investors who are
ahead of the curve.
Congressional Wisdom
I know ”congressional wisdom” sounds like an
oxymoron. But amid last year’s bailouts and giveaways, Congress did
something right. They passed the Rare Earth Supply-Chain Technology and
Resources Transformation Act of 2009 (RESTART). Here is a summary of
their findings:
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Many modern defense technologies cannot be
built without REEs.
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Significant quantities of REEs are used in
the production of green technologies that support reduced dependence
on foreign oil.
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The U.S. depends nearly 100% upon imports
for REEs.
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More than 95% of REEs for world consumption
comes from China.
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China’s ability and willingness to export
REEs is eroding.
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Pending Chinese legislation proposes an
immediate ban on the five “heavy” REEs and a restriction on the export
of all the other light REEs to a level well below Japan’s 2008 demand
alone.
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The U.S. has no active heavy group rare
earth production capabilities. Nor does the U.S. maintain a strategic
reserve of REEs.
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REEs should qualify as strategic materials
critical to national security.
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Beijing's Secret Bullion Mandate
How China's three-pronged "stealth attack"
on world gold supplies could corner the market for the next 10
years...
And the two "metals multiplier"
investments that could hand you 633% gains in 2010 - or 4,215% over
time.
But you must make your move right now.
Here's how to do it with zero risk. |
The China Syndrome
The Chinese produce 95% of the world’s REEs.
They consume almost two-thirds of their REE production domestically. So
this might seem like a natural place to invest. Forget it. The state
owned Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Company hasn’t gone
public. And it probably never will. One thing’s for sure. If China
continues to withhold REEs, deposits outside China will skyrocket in
value.
Getting on Board
So where can you cash in? Australia has some
of the richest rare earth deposits outside of China. South Africa used
to produce a large quantity of REEs. As prices go up, you can expect
many of those old mines to be reopened.
While U.S. production is virtually zero, a
mine in California is set to reopen in 2012. And expect more mines to be
opened domestically. The $1.2 billion Congress has authorized will see
to that. A lot of money will be made by companies that make up the
shortfall as China limits exports.
I asked IDE’s own Rusty McDougall for his
opinion on the future of REEs. He’s bullish. He said, “North America
will literally rebuild its rare earth capacities. We have a lot of
catching up to do, and enormous profits will be made by savvy
investors.” Rusty has his eye on the likely beneficiaries of Congress’s
RESTART act. Meantime, he suggests that investors look to Canada for a
number of exciting REE investments.
It’s hard to say exactly how much money stands
to be made in rare earth mining stocks. When I asked Rusty about this,
he said, “We’re in elephant country. Ten-baggers or more are entirely
possible.” For more specifics, see Rusty’s
Resource Windfall Speculator.
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