Some interesting news on the Rare Earth front, courtesy of our friends at The Atlantic and Slashdot.
This article from The Atlantic showcases the “Project Phoenix” rare-earths mine in the United States which may provide an alternative to the Chinese stranglehold on these strategically and economically vital materials. But as some posters on Slashdot noted, the Chinese monopoly on rare earths also comes from owning rare-earth mines in other countries. What if the Chinese decided to buy this one, too? What would the political implications of that be?
Another note in the Slashdot article: recycling of existing rare earths may turn out to be a significant factor. If it takes a ton of dirt to come up with a cellphone’s worth of magnets, there’s something to be said to just ripping that magnet out of an old cellphone.
You can’t recycle things to get real economic growth, stabilize prices or do any such rational thing.
Paul Krugman and the brilliant Keynesian economists will tell you that you need to go deeper into debt to grow the economy (debasing living standards in the process).
So close down the existing mines, that are paid for (or being paid for), and open up new, capital-intensive ones, that will cost eons of money to build, and put the bill on the taxpayers’ credit card.
In fact, pray for an imaginary hostile alien invasion, which will really accelerate deficit spending and add even more trillions to the national debt, according to Krugman (never mind if the use of the debt is for no productive purpose, and in fact, damns future generations’ living standards):
Paul Krugman’s Cure For Economic Woe: An Alien Invasion
http://www.outsidethebeltway.com/paul-krugmans-cure-for-economic-woe-an-alien-invasion/
That’s actually not true at all, your description of keynesian economics fails hard. If anything recycling is a substantial untapped section of economic growth. The reason you spend in a deficit time is to avoid a massive fall. To keep dollars moving they need to come from the private sector or government. When the private sector falters the government has to pick up the slack.
For the record though government spending doesn’t debase living standards, all proof shows the opposite in fact because of the way government spending is handled usually.
Yes, okay – LOL.
Double the number of Federal Reserve Notes in existence to finance deficit spending (i.e. finance government bloat), and see what happens to living standards.
Wait…we’ve done that, except only more so!
If you double or triple the supply of Federal Reserve Notes, their value RISES, right? LOL
The national debt was about 1/3 the level it is NOW back in 2006 (or, 6 short years ago).
Let’s spend and indebt ourselves to prosperity!
National debt: http://z5.ifrm.com/5902/67/0/p1036223/us_debt_graph_2020.jpg
http://ilene.typepad.com/.a/6a010536583aff970b014e5fa3666a970c-popup
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/von%20havenstein/Austrian%20Money%20Supply.jpg
https://seekingdelta.files.wordpress.com/2011/02/qe2-returns.gif?w=630&h=505
Here’s Keynesianism described succinctly in an Onion parody video:
Should The Government Stop Dumping Money Into A Giant Hole: https://www.youtube.com/watch?v=JnX-D4kkPOQ
Xeranar: “…the government has to pick up the slack” to keep dollars moving. Please consider that for the government to keep dollars moving it must either: 1) Acquire those dollars from the private sector by tax, fee, or buggery, or 2) Borrow those dollars, which must be paid back with interest (the which will be taken from the private sector by tax, fee, or buggery), or 3) Print the money, which devalues the money, which…is just plain buggery. I need a kiss.
If you were hoping to win some sort of prize for Completely Off Topic Comment of the Week, then congratulations, you’ve won.
@Pch101..ok that the second thing this week I have agreed with you on..This is scary stuff..lol.. Next thing you know you will have convinced me to by a Mitsubishi automobile.
Actually, my reply was on topic.
JB’s column speaks of opening new mines to extract rare earth metals, along with the fact that there’s a massive amount of components previously sourced from rare earth metals that have gotten tossed away.
In fact, much of what China (and many other governments) are doing now to try and keep their economies from melting down is building massive projects that are speculative at best, and incredibly wasteful at worst (see articles on China’s “ghost cities”).
“Next thing you know you will have convinced me to by a Mitsubishi automobile.”
Friends don’t let friends buy Eclipses.
“Actually, my reply was on topic.”
You must have this place confused with Zero Hedge. Last I checked, Paul Krugman was an economist and columnist, and had no involvement in the mining business.
Let’s agree on the “friends don’t let friends buy Eclipses,” and leave it at that.
Paul “Enron Advisor” Krugman as he is known professionally.
Completely false.
The cost of recycled Aluminum, for one, is a fraction of the cost of native aluminum as it uses about 1/20th as much energy to produce.
The dollars saved can be used more productively elsewhere and the energy savings, which are huge, result in lower energy prices – itself an economic benefit to the rest of industry.
Reprocessing spent uranium from nuclear reactors would follow a similar logic. Reduce the amount of waste that needs to be buried by about 95%; obviates the need for enriching uranium ore – which is expensive and somewhat energy intensive; can produce extraordinary energy output from a tiny amount of material.
Recycled plastics reduce oil imports, cut energy use, etc., etc., etc.
It’s free money.
Recycling (assuming it costs less than making new stuff) means you’re doing more with less. That means great efficiency. That means growth.
DeadWeight Your brand of neocon bs is really getting old around here. This is a site for auto enthusiasts! If you cant comment about cars or the auto industry then go away and dont come back! Your crazy rants are inappropriate here, and they are really starting to piss people off and/or chase them away. Go hang out with your fellow neocon haters on one of their sites……please.
@DeadWeight Just out of curiosity, why don’t you use the writings of Paul Krugman to attempt to prove your points about Paul Krugman? The internets are full of Krugman, yet you link to some wacky “this is what Paul Krugman says” crazy town website. What you state as “facts” are pure mindless drivel. Here’s another clue, when you use TheOnion to back up your arguments you’ve pretty much jumped the shark.
I, for one, welcome our new alien overlords.
All Power and Glory to the Hypnotoad!
so what major *mechanical* items would be effected from a shortage? i dont care about miniaturized electronics.
Do you own a cell phone?
I would venture to suggest that anything you can’t build using Amish tools and production techniques would be threatened. That includes stuff like reissues of 1950s Fender tube amps as well as the Boeing Dreamliner, John Deere tractors, and microwave ovens.
The way machines are made now there’s no such thing as a mechanical part that doesn’t relate somehow to miniaturized electronics. EV’s are the extreme example of this.
EVs are low tech. The only use they have for digital controls is to keep LiIon batteries from becoming hi-tech blow torches. Unfortunately, they cannot prevent LiIon batteries from becoming hi-tech door stops. Otherwise, BEVs are pre WWI technology.
Permanent magnet motors (currently) require rare earths to build, Robert. I know the Volt uses one; not sure about other manufacturers.
edit: the Mitsubishi i-MiEV also uses a permanent magnet motor. So does the Brammo Enertia. I believe the Tesla Roadster does not, but I’m not 100% sure. No idea on the Nissan Leaf.
Just like the internal combustion engine, electric motors have improved a bit since WWI.
multicam said: “The way machines are made now there’s no such thing as a mechanical part that doesn’t relate somehow to miniaturized electronics.”
It would depend on a definition of “miniaturized electronics.”
We build purely mechanical devices. These parts do require machining, coating, etc., but those processes can be performed on old-school machines with a minimum of computerization. (They can be, but typically are not. However, there still a great many such old machines in service.)
“i dont care about miniaturized electronics.”
Carburetors and points ignition for you, then?
So can I assume you wrote this post with an abacus, or something running off of thousands upon thousands of vacuum tubes?
Verdict: It’s all Obama’s fault.
Unless it’s actually an intricate problem with complex nuances, suspended in a World Wide Web of politico-economic factors and dwindling resource issues.
It will be solved by dinner time, I’m sure.
I will have it fixed by 1pm at the end of my lunch…Have your people call my people..
Do you work at an MBB consulting firm?
There are two paths for American’s to choose:
1) The Communist path which China has gradually abandoned. Then nationalize rare earth mines and set prices.
2) The Capitalist path which is still “supposed” to be the American way. Then do nothing, assuming some American capitalists, in seeking for higher profits, will outbid the Chinese in purchasing these mines.
2a) If the above failed, there is still hope that some American capitalists, in seeking for yet higher profits, will find alternative materials.
There is a third way. The American way. Ownership by an American company (or in the case of China a Chinese company)
How is that different from my 2nd way?
Come on. Rare earths are not rare they are just easier to get in some places than others. A little googling will also net you results to show you that prototype electronics can and will eventually be built without them.
In the meantime once the prices get high enough to cost justifying opening up previously closed and new mines we will have the materials.
Short-term threat? Yes. Long-term threat? No.
I don’t know much about rare earth metals. I do know that zinc oxide is very important, because I saw Kentucky Fried Movie.
If I recall correctly, the Japanese decided that the thing to do was build a motor that doesn’t need rare earths.
Whether or not it’s as good as one build with rare earths, I don’t know. But it’s one way to be sure one isn’t at the mercy of a potentially unfriendly foreign power.
Building those motors isn’t really a big deal. Building one as compact & powerful as the press release from Toyota, now that’s a different story.
If the aliens do come just make sure you dont drive a Ford.
And stock up on Twinkies?
Isn’t Toyota working on electronics without rare earth metals?
An electric motor that didn’t make substantial use of rare earths in its construction, I believe… electronics (circuit boards, etc.) as we know them today are next to impossible to make without rare earths.
AC induction motors, such as those used in the Nissan Leaf, don’t use rare earth metals. However, they are not as efficient as motors using use permanent magnet rotors. This gap is supposedly narrowing with new generations of AC motors.
Either way, rare earths are indeed crucial in many applications. Until these new rare earth mines come into full operation over the next few years there is really no other choice but to use Chinese REMs.
Let’s keep in mind, REMs are freely available within China, they are only export limited. Their goal is for foreign companies to relocate their factories to within China that does most of the high-tech processing, this is already happening since China has locked down the REM export market.
I just joined for this!
I think there may be some confusion between rare earth metals used in nearly all electronics and rare earth magnets used in EV motors and computer hard drives. Maybe the confusion is all mine though. Does this mine produce both? Or are both types derived from the same metals?
Lastly, doesn’t the induction motor qualify for a motor that doesn’t use rare earth metals since it has no permanent magnets?
The Chinese are smart enough to put a monopoly together on rare earths? Color me skeptical. There very smart, ruthless capitalists who both buy and sell commodities. Best of luck for anyone trying to corner the market…
And if they do have any success, regulatory and anti-trust push back still exists…
If the owners have even a shred of patriotism, they wouldn’t sell the mine to China. But, since the $ is worth less and less by the day, it is a possibility.
considering that China’s currency is pegged to the dollar, a weaker dollar does not help if they are selling to the Chinese.
and ihatetrees: China has a near monopoly on rare-earth mining and refining, its the result of not having any environmental protection standards as well as a global price war in rare earths in the 1990s that made it uneconomical to mine most rare earths anywhere else but China.