Thursday, February 17, 2011

China once again signals plan to limit rare earth element exports

Rare earth elements (REE) - A nod is as good as a wink to a blind man, horse, donkey, country or world

Rare earth elements (REE) - when will I stop beating this dead horse?

Canadian rare earth element (REE) mining stocks move higher Wednesday on "signals" from China that it will be reducing REE exports

If you couldn't tell from the title, this is yet another discussion of world dependency on China for a critical resource in the form of rare earth elements, actually a misnomer because in reality they are not all that rare.

The signal mentioned in bold above was another statement yesterday from the Chinese government saying that the country will "reasonably set annual quotas for production and export" of REE. The million dollar question is exactly what this means? Obviously the stock market players in Canada don't know for sure because these REE mining stocks only moved higher and didn't surge higher.

But that is not really the point.

Dependency on others for aspects of our national well-being, particularly communist China, is a problem that I have mentioned many times before most recently on February 11 in an article China dependency - It's deja vu' all over again.

In the case of REE it is a problem that exists with no immediate solution due to nothing more than logistics and the fact that an industry can't go from a standstill to production in days or even weeks but in years.

It is a story of benign neglect and of purely economic decision making at the expense of national security.

The United States and the rest of the world are beholden on a China that is communist in some respects and capitalist in others. It is the capitalist China we rely on for the supply of rare earth elements (and the buying of our debt to fund our deficits) needed for so many things including systems used in defense industry products.

It is not that the United States doesn't have these elements in the ground. It is that we stopped producing them and China picked up the slack to the tune of 96% of the worlds supply.

Wake up America before it is too late and the headlines read that China has decided to slash exports or even stop them. Only then will people say "how did this happen?"

The short answer is that we will have let it happen. The United States and other countries are willingly and consciously providing China with the ammunition it needs for a global extortion plot.

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