Lesson for Generals and Economists: It is Resources and NOT Toilet Paper Money that Counts

China Said to Widen Its Embargo of Minerals – NYTIMES.com

HONG KONG — China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of those materials to the United States and Europe, three industry officials said on Tuesday.

Rare Earth Mineral

So what is a Rare Earth Mineral

A rare earth mineral is a mineral which contains one or more rare earth elements as major metal constituents. Yttrium is found in almost all rare earth minerals. Rare earth minerals are usually found in association with alkaline to per-alkaline igneous complexes, in pegmatites associated with alkaline magmas and in or associated with carbonatite intrusives. Perovskite mineral phases are common hosts to rare earth elements within the alkaline complexes. Mantle derived carbonate melts also are carriers of the rare earths. Hydrothermal deposits associated with alkaline magmatism contain a variety of rare earth minerals.

The majority of rare earth minerals are mined in Asia, with China producing 93 percent of the world’s supply, and more than 99 percent of the most valuable supply. – Wikipedia

So where is it used?

Yttrium ( /ˈɪtriəm/ IT-ree-əm) is a chemical element with symbol Y and atomic number 39. It is a silvery-metallic transition metal chemically similar to the lanthanoids and has historically been classified as a rare earth element. The most important use of yttrium is in making phosphors, such as the red ones used in television cathode ray tube displays and in LEDs.^[5] Other uses include the production of electrodes, electrolytes, electronic filters, lasers and superconductors; various medical applications; and as traces in various materials to enhance their properties. Yttrium has no known biological role, but exposure to yttrium compounds can cause lung disease in humans.^[6] – Wikipedia

The Big Number

The Big Number

Will China go on a World Domination spree?

Like all nations who once (or presently) enjoy being on top of the world, bored by being successful, seek to entertain themselves by going on a world domination spree.

History is there to prove it and its the nature of man to dominate. China is now the hub for manufacturing nearly everything. This is because they are efficient at producing goods at lowest of costs. This has led firms to shift production to China. Which in turn has lead to transfer of loads of product knowledge to China in a short time.

I will let this video speak for itself.

Will China go on a World Domination spree?

Like all nations who once (or presently) enjoy being on top of the world, bored by being successful, seek to entertain themselves by going on a world domination spree.

History is there to prove it and its the nature of man to dominate. China is now the hub for manufacturing nearly everything. This is because they are efficient at producing goods at lowest of costs. This has led firms to shift production to China. Which in turn has lead to transfer of loads of product knowledge to China in a short time.

I will let this video speak for itself.

Americans Love to Hate

May that be due to the color of the skin, size of your toe or length of your fingernail, an average American will find a reason to hate you.

Take the following example (Monsters and Critics)

Washington – Americans are ‘impatient’ to see China slim its huge trade surplus, which is fuelling anti-China sentiment in the United States, the top US finance official said Tuesday.

Treasury Secretary Henry Paulson’s warning came at the start of a US-China economic summit in Washington, where the US is seeking to ease trade tensions and prod China to boost imports from the US.

‘Our policy disagreements are not about the direction of change, but about the pace of change,’ Paulson told the opening session. ‘Americans have many virtues … but we are also impatient.’

Pressure in the US Congress to punish China, the world’s fastest- growing economy, is running high as Paulson and Chinese Vice Premier Wu Yi began two days of talks.

Many US lawmakers view China as an unfair trade partner that keeps its foreign exchange rate artificially low to boost exports and has killed hundreds of thousands of US manufacturing jobs.

Now that is a bit unfair don’t you think. It rather demonstrates the hypocrisy of Americans (as if thats news) but how? Allow me.

By the early 1970s, as the Vietnam War accelerated inflation, the United States as a whole began running a trade deficit (for the first time in the twentieth century). The crucial turning point was 1970, which saw U.S. gold coverage deteriorate from 55% to 22%. This, in the view of neoclassical economists, represented the point where holders of the dollar had lost faith in the ability of the U.S. to cut budget and trade deficits.

In 1971 more and more dollars were being printed in Washington, then being pumped overseas, to pay for government expenditure on the military and social programs. In the first six months of 1971, assets for $22 billion fled the U.S. In response, on August 15, 1971, Nixon unilaterally imposed 90-day wage and price controls, a 10% import surcharge, and most importantly “closed the gold window,” making the dollar inconvertible to gold directly, except on the open market. Unusually, this decision was made without consulting members of the international monetary system or even his own State Department, and was soon dubbed the “Nixon Shock“.

Wikipedia

So, basically US blasted the Bretton Woods system when it could not repay in gold.

The point being, US “reserves” the right to act in its self-interest, while others do not. An interesting ethnocentric logic. Iraq and Afghanistan are prime examples of the application of this logic.

In the end I leave you with this… The Spoof

Americans Love to Hate

May that be due to the color of the skin, size of your toe or length of your fingernail, an average American will find a reason to hate you.

Take the following example (Monsters and Critics)

Washington – Americans are ‘impatient’ to see China slim its huge trade surplus, which is fuelling anti-China sentiment in the United States, the top US finance official said Tuesday.

Treasury Secretary Henry Paulson’s warning came at the start of a US-China economic summit in Washington, where the US is seeking to ease trade tensions and prod China to boost imports from the US.

‘Our policy disagreements are not about the direction of change, but about the pace of change,’ Paulson told the opening session. ‘Americans have many virtues … but we are also impatient.’

Pressure in the US Congress to punish China, the world’s fastest- growing economy, is running high as Paulson and Chinese Vice Premier Wu Yi began two days of talks.

Many US lawmakers view China as an unfair trade partner that keeps its foreign exchange rate artificially low to boost exports and has killed hundreds of thousands of US manufacturing jobs.

Now that is a bit unfair don’t you think. It rather demonstrates the hypocrisy of Americans (as if thats news) but how? Allow me.

By the early 1970s, as the Vietnam War accelerated inflation, the United States as a whole began running a trade deficit (for the first time in the twentieth century). The crucial turning point was 1970, which saw U.S. gold coverage deteriorate from 55% to 22%. This, in the view of neoclassical economists, represented the point where holders of the dollar had lost faith in the ability of the U.S. to cut budget and trade deficits.

In 1971 more and more dollars were being printed in Washington, then being pumped overseas, to pay for government expenditure on the military and social programs. In the first six months of 1971, assets for $22 billion fled the U.S. In response, on August 15, 1971, Nixon unilaterally imposed 90-day wage and price controls, a 10% import surcharge, and most importantly “closed the gold window,” making the dollar inconvertible to gold directly, except on the open market. Unusually, this decision was made without consulting members of the international monetary system or even his own State Department, and was soon dubbed the “Nixon Shock“.

Wikipedia

So, basically US blasted the Bretton Woods system when it could not repay in gold.

The point being, US “reserves” the right to act in its self-interest, while others do not. An interesting ethnocentric logic. Iraq and Afghanistan are prime examples of the application of this logic.

In the end I leave you with this… The Spoof