Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.
China is tightening its grip on rare earth metals again… and it could cost America dearly.
We already know that China holds 97% of the rare earth market — the very materials that power your iPods, cell phones, and computers.
But it’s the Middle Kingdom’s latest move to cut exports by 72% that has America up in arms.
Put simply, we need the supply or we are screwed.
Electronics could start disappearing from shelves… Products that depend on these materials would see prices skyrocket, possibly bankrupting the very companies that depend on these sales… Green technologies would suffer… And strategic and defense weaponry (guided missiles, for example) wouldn’t be produced as quickly.
The impact on electric batteries and motors would be crippling. Toyota’s Prius depends on 2.2 lbs. of neodymium in the hybrid’s electric motor and 22-33 lbs. of lanthanum in the car’s battery pack.
And there are still plans to double production of the Prius from one million to two million units. But it’ll never happen without rare earth supply. The President can call for a million electric cars all he wants, but they all depend on available rare earth supply.
It’s the same story with wind power; turbines use massive amounts of rare earth. Right now, all of those rare earth materials are coming from just one place: China.
All of this demand will no doubt send prices for rare earth metals soaring.
“Foreign countries should calmly and logically think about this and develop their own mines for their own needs. Our resources are diminishing. And we need these minerals for our own use,” said one researcher from China at a recent conference in Beijing.
There is a bill in the works — the Restart Act — that could reignite the rare earth sector on American soil through loan guarantees and a stockpile of rare earth.
We have possible deposits in Idaho, Wyoming, and Alaska — giving us hope that U.S. rare earth production will get us by. And we can always get a little help from Greenland, Canada, and Australia…
But the clock is ticking. Developing new mines can take years. And it’s not as if the crisis is a ways off. It’s already here.
And it’s the reason we like stocks like Hudson Resources (HUD.V) and Lynas (LYSCF.PK) so much.
Another one we have our eye on is the coming IPO from Molycorp, a company described as the only rare earth minerals producer in the Western Hemisphere. Its Mountain Pass mine (for which it has plans to reopen and expand) is one of the world’s largest rare earth mines outside China.
Think about jumping on this IPO. It could skyrocket if they can make up for the supply shortfall.
But rare earth isn’t the only opportunity out there…
We’re confident that our editors will give you at least one or two investment ideas to mull over through the weekend. You can find those below.
Stay Ahead of the Curve,
Ian L. Cooper
The Ten Commandments Of Trading: Ten Rules for Profitable Trading
Editor Christian DeHaemer tells readers about the ten rules of trading and explains why his favorite stock of the year is up 441%.
Barack’s Peak Oil Confession… Almost Sent a Nation into Panic
Energy and Capital Editor Ian Cooper takes a look at new peak oil admissions, and what the White House and BP still aren’t telling the public.
Obama to Offshore Drilling: Not Off Limits, but With a Catch: The Gulf Drilling Ban Extended
Editor Keith Kohl offers the latest details on Obama’s new drilling moratorium.
The New Offshore Oil Paradigm: Why I’m Bullish on Offshore Drilling Contractors
Wealth Daily Analyst Adam Sharp searches for offshore drilling plays amongst the fallout from the Gulf oil spill.
Washington’s Other Undeclared War: Congress’ Secret Offensive
Right now, every one of us is danger of losing our hard-earned savings as the war for American retirement rages on… But there are options for savvy investors. Don’t miss this report.
Don’t Sell Your Junior Gold Stocks Just Yet: Why You Can Expect Long-term Rewards
Editor Greg McCoach discusses why selling shares of junior gold stocks might not be the best idea right now, despite a downturn in the market.
Peter Lynch’s Stock Market Investment Advice: Finding the Elusive 10-Bagger
Wealth Daily Editor Steve Christ breaks down Peter Lynch’s best investment advice on the trail of a 10-bagger.
A Cold War Blunder: How to Bank 180 Times Your Money
This Mongolian oil stock is up 413% since we recommended it. This is just the beginning of what could turn out to be a HUGE run. We’re talking thousands of percent gains here. Read the full report now, before this outfit’s share price hits the ceiling.
Investing in Green Stocks: 7 Green Stocks to Buy on the Next Market Slide
Green Chip Editor Jeff Siegel reveals his top seven green stocks to buy the next time the market slides.
A Beginner’s Guide to Fundamental Analysis: A Heavyweight’s Handbook to True Wealth
Wealth Daily‘s Steve Christ takes a look at fundamental analysis and explains how the heavyweights have used it earn a fortune.