James Dines: Gold, Rare Earth, Uranium, and the Mother of all Bubbles

Rare Earth elements are essential for the production of modern technology — for instance, Toyota Prius drive motors rely upon dysprosium.  Phones, computers, and most modern electronic devices are also mostly in some way reliant upon Rare Earth elements, and as their name suggests, these elements are …well… rare.

China produces a staggering 97% of them, mostly from Inner Mongolia, and the Chinese have reduced their exports in the last year by 72% to keep these Rare Earth elements back for themselves and their own industrial usages.

As you might imagine, this has done tremendous things to Rare Earth element prices, with cerium oxide (used in self-cleaning ovens and many other catalytic applications) shooting up in price by over 2,600% in the last year.

James Dines talks about these fascinating elements in an interview with King World News, and is surprised that more people aren’t talking about this Chinese cut-off in supply, because soon the US Pentagon is going to become unable to build its Predator drones, without access to these Chinese Rare Earth elements, and Toyota may have to stop building the Prius.

Jeremy Clarkson should be happy then.

However, even if the UK government can survive all of the current hostility of the public sector unions — who are currently launching a blitzkrieg of sob stories such as why we need policemen to man mob-handed road-blocks to check people are wearing seat-belts — and even if the government can reduce its spending to a much lower level, to release funds for productive investment rather than consumptive spending, there may still be a shortage of jobs creation in the private productive sector.

This will be because new uncrowded entrepreneurial factories, funded by savings made possible by government spending cut-backs, may be unable to build anything that anyone wants without access to the Rare Earth elements, especially if these new factories try to pay for these elements with ever-increasing amounts of fiat paper pounds.

In the interview, Mr Dines also spends some time talking about uranium and gold and then describes the mother of all bubbles, which he says is the global fiat currency bubble. This is the best bit of the interview, which is why I have left it until last:

Are you teaching your children how to speak Mandarin yet?  Now may be the time to start.

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