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China's #1 Weapon Against the West: Rare Earth Elements

Written by Alex Koyfman
Posted June 20, 2019

Dear Reader,

What you don't know can and will hurt you.

The periodic table of elements contains 17 metals, known commonly as rare earth elements, which today present the biggest existential threat, perhaps ever, to the future of Western civilization.

I'm not going to get into the technical details here.

At the end of this article, you'll have the opportunity to check out a strategic report on which elements these are and what makes them unique.

All I want to do right here, right now, is give you a basic overview of the problem we're facing today... a problem that has quietly been developing for almost three decades, right under our blissfully ignorant noses.

Rare earth elements, or REEs, are what science and industry know as "technology metals."

As Essential to the 21st Century as Oil Was to the 20th

The reason is that every modern piece technology, from the phone in your pocket to the GPS satellite circling in the sky over your head to the guidance system in the U.S. military's newest cruise missiles, is critically dependent on this family of metals to function.

Without REEs, the complex, solid-state circuits that make these modern wonders work would not be possible.

REEs are, put plainly, the key building block of today's high-tech, digitally enhanced world.

Our biggest economic and strategic rival, the Chinese were well aware of this long before wireless technology and the internet became staples of our day-to-day lives.

And for the last 30 years, they have been hoarding the production of this family of elements.

Today, China is by far the world's biggest producer of these metals.

REE

Our own demand for these metals, which has grown to enormous proportions over the course of the last quarter-century, relies on Chinese suppliers for more than 80% of its annual supply.

China's Trump Card

It's a bigger threat than any other presented by the world's only other superpower. More so than China's military capabilities. More so than China's manufacturing capacity. More so than China's active and highly successful electronic espionage efforts.

All of these threats, compared to China's stranglehold on REE production, are mere nuisances.

For years, the media has buried the story, but now, as Trump's trade wars heat up, people are finally starting to take notice, and the headlines we should have seen during the Clinton administration are starting to make their rounds.

Just last week, an article in Forbes stated:

China has played a new card in its trade dispute with the United States. It has threatened to limit the flow of rare earth elements. Essential in all sorts of products from mobile phones to satellites, oil-drilling equipment to defense hardware, rare earth materials are important, and Beijing’s threat is not an idle one.

Just one day later, CNBC published an article titled:

“Why rare minerals like neodymium have become China’s wild card in the trade war with Trump”

Two days after that, Wired magazine jumped on the trend with a piece called:

“ARE RARE EARTHS THE NEXT PAWN IN THE US-CHINA TRADE WAR?”

A coupe weeks before that, back in May, Yahoo Finance published an article with the ominous title:

“Rare Earth Metals: China’s ‘Nuclear Option’ In The Trade War”

It's Only News If You Haven't Been Paying Attention

But go back a few pages in the search results, and you'll see that over the years, more specialized media outlets have been pounding the table about this growing crisis.

Almost a decade ago, in March of 2010, the Institute for the Analysis of Global Security, a D.C.-based nonprofit think tank, published an extensive study on the subject called: “China’s Rare Earth Elements Industry: What Can the West Learn?”

The answer to that question, apparently, was little to nothing.

Nobody heard the warnings back then because our consumer electronics prices were stable. All was good. Nobody seemed to care.

It allowed China to quietly grow its exports by more than 90% in a mere four-year stretch between 2014 and 2018, raising its global market share on the elements to a staggering 95%.

Never mind our iPhones and wind turbines. Never mind our sleek, scary-fast Teslas, super-thin laptops, and stylish smartwatches.

The business end of our national defense, our fighter planes, our stealth bombers, our surface-to-air missiles, and our spy satellites all depends on REEs the same way your body depends on oxygen.

Without this class of elements, we're back in the analog age, which for the DoD means complete and total shutdown.

Not So Fast

Though your instinct may be to blame Trump for his economic saber-rattling, the truth is, the Chinese have been biding their time, waiting for the perfect moment to weaponize this monopoly.

Perhaps Trump's cavalier attitudes and brash manner may have escalated this situation, but the critical moment would have arrived either way.

Make no mistake about it: This is a crisis. But right now, there may be a light at the end of the tunnel.

Remember that strategic report I mentioned earlier? In a moment, you'll have the opportunity to check it out for yourself and learn more about what REEs are.

More importantly, however, you'll find out why this dark tunnel may have a light awaiting us at the other end.

You see, quite recently, a discovery was made that could change this entire dynamic...

A deposit of rare earths — maybe the biggest anywhere in the world (estimated to be over a quarter-trillion dollars in value) — located thousands of miles away from China's grip.

This deposit is buried in a frozen tundra at the edge of one of the world's most unforgiving regions.

A Canadian company owns it all, and it just might be enough to shift the balance of power away from the Chinese.

Access this strategic report right here, and learn everything you need to know about the problem, the potential solution, and the small Canadian mining company that holds the key.

Fortune favors the bold,

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Alex Koyfman

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Coming to us from an already impressive career as an independent trader and private investor, Alex's specialty is in the often misunderstood but highly profitable development-stage microcap sector. Focusing on young, aggressive, innovative biotech and technology firms from the U.S. and Canada, Alex has built a track record most Wall Street hedge funders would envy. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.

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