Meraglim Blog

Rare Earths Are Not Rare but They Are Strategic. Will China Cut Them Off?

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

You’ve heard about “rare earths.” These are 17 chemical elements with names including cerium, erbium, europium and other little-known metals.

Certain rare earth minerals are formed from combinations of these rare earth elements. Despite the designation as rare earths, they are not actually that rare. In fact, some are quite plentiful in the Earth’s crust.

Some are far more plentiful than copper. The “rare” designation comes from the fact that while they may be plentiful in quantity, they are found in extremely low concentrations. This means a huge amount of ore and expensive mining processes are needed to extract even a small amount of these substances.

While they have had various uses over the decades, rare earths today are critical in the manufacture of fuel cells, nickel-metal hydride batteries, plasma screens, fiber optics, lasers and other high-tech applications. Electronic vehicles, mobile phones and telecommunications systems would be impossible to build without them.

China is responsible for 90% of global production, which makes them a potent weapon in the U.S.-China trade wars. The U.S. dominates the trade wars because we import far more from China than they import from us, which means China cannot match the U.S. when it comes to tariffs.

China cannot dump their Treasury note holdings on the markets without devaluing their own position and risking an account freeze by President Trump. As a result, China must use more unconventional weapons.

According to this article, China is now threatening to cut off rare earth exports to major users such as Japan and South Korea, both allies of the U.S. Over time, Western powers can replace rare earths purchased from China, but there could be major manufacturing disruption in the meantime.

This is one more example of the unintended consequences of a trade war and how the consequences cannot be limited to just adding up tariffs on one side or the other.

Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

 

 

IF THE SCIENCE IS NOT ON YOUR SIDE, JUST TRY THREATS

It’s clear that good science does not support the extreme claims of the climate alarmists. Yes, there is such a thing as climate change, but it’s slow, difficult to predict and almost impossible to model because of the complexity of the process. The climate alarmists have grabbed most of the headlines for the past ten

Read More »

WHY TRUMP WILL WIN REELECTION: NOT POLLS OR PUNDITS; JUST COMMON SENSE

Political analysts use polls, betting odds, historic trends and other inputs to make their (usually wrong) political predictions. We all remember that “experts” said Hillary Clinton would win the presidency in 2016 (they gave her a 92% chance on the morning of the election), and that the UK would vote to “remain” in the EU

Read More »

HERE’S ANOTHER ELITE WITH ANOTHER PLAN TO TAX AWAY YOUR WEALTH

The elites never rest when it comes to devising new ways to take your money through taxes, inflation or outright confiscation. The latest Trojan horse the elites are riding to take your money is climate change. The climate does change over long periods of time for reasons that are not well understood except that they

Read More »

KRUGMAN SHOWS HE KNOWS LITTLE ABOUT ECONOMICS AND LESS ABOUT FINANCE

We already knew that Nobel Prize winner Paul Krugman knows almost nothing about economics. Now, we see from this article that he knows nothing about banking either. Krugman claims that the repeal of Glass-Steagall and the actions of banks in general were not the cause of the 2008 financial crisis. The conventional wisdom is that Lehman Brothers,

Read More »
Scroll to Top