Why Obama Should Address the Rare Earth Crisis

By: Jeb Handwerger | Tue, Sep 13, 2011
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"A little bread-and-butter support by Obama could provide an important boost for the rare earth industry."

There is a fast growing crisis to modern industrial nations posed by China's draconian and monopolistic maneuvers in the implementation of a quota system. With one specific bread and butter support by Obama, the rare earth industry (REMX:NYSE) could receive an important boost, providing jobs and facilitating the development of a new industrial sector.

One of our carefully researched rare earths stocks is the only domestic source not only of rare earths, but of the highly and truly critical heavy rare earths namely dysprosium and terbium, uniquely available right here in the U.S.A. Unlike Molycorp (MCP:NYSE) and Rare Earth Elements (REE:NYSE) in the U.S. and Lynas (LYSCF:ADR) , who control light rare earth deposits, which although valuable and advanced are not strategic and vital for our national survival.

Despite erroneous comments by one negative source possibly representing short sellers and competitors, the truth is that Ucore's (UCU:TSX.V; UURAF:OTCQX) Bokan Mountain is one of the highest grade world class heavy rare earth deposits with the only 43-101 compliant heavy rare earth resource in the United States.

Why is it so important that Gold Stock Trades highlights this American heavy rare earth source as a strategic asset? Consider that this mineral treasure trove hopes to develop a mine essential to the very defense of our nation such as guided missiles and highly top secret uses that are being kept under strategic governmental wraps.

Our country is in imminent danger of becoming a client of China. From the very time we allowed our native rare earth industries to be expropriated by the Chinese so many years ago, we are now on the verge of reaping the whirlwind reaped by our short sightedness.

China is shrewdly gaming us into positions of weakness and dependency. To ignore the global chess game being developed by China is close to an act of treason or at least malfeasance by our elected representatives.

It is a tragedy that we are selling our natural resource birthrights for a mess of Beijing pottage. America should reject any dependency on foreign nations whose motives are not based on altruism and only benefit their own interests.

A vital part of our high tech economy depends on rare earths components. It would be very welcome if Obama could emphatically declare an emergency Executive Order fast tracking American rare earth industrial development.

We must be bold and pick up the gauntlet that China is slyly throwing at us. It is survival time on a national level.

It is noteworthy that there is a huge presence of short sellers in rare earth and uranium stocks. It is more than curious the shorts have chosen close to every one of the stocks followed on our GST select list.

Attention must be paid to the consideration that these short sellers are wielding a double edged sword. Should only one positive news item come out in the burgeoning rare earth sector, the short sellers will be sent scurrying to cover with a consequent parabolic rise in the price of rare earth equities.

Obviously, the shorts must believe that the position represented by the case for rare earths is subject to criticism. They must feel that the rare earth case is being drummed without any basic substance to their story and are a long way from fruition. Of course, Gold Stock Trades differs. The shorts are skating on thin ice and once major reversals begin they will have to cover huge positions.

Therefore we would welcome Obama's long overdue positive comments on the importance of the rare earth industry to modern industrial American growth. Imagine the jobs and new industries that would be created by such Presidential approbations.

 


Disclosure: I am long UURAF and LSYCF.

Stay tuned for developments.

 


 

Jeb Handwerger

Author: Jeb Handwerger

Jeb Handwerger
http://goldstocktrades.com

Jeb Handwerger

I started reading charts at eleven years old. One day my father, a market trader and technician found his library of books on technical analysis mysteriously disappearing. He later found the textbooks under my bed. For many years day and night I studied technical analysis and charting, working and learning from my father who has over 50 years of trading experience. Technical analysis is my passion and love.

In 2001, I started noticing the junior mining stocks and gold as having a tremendous upside. For the past 9 years I have researched many juniors and have identified the major winners using technical analysis and finding top management.

I earned a Bachelors Degree in Mathematics and a Masters Degree. I learned most of my technical analysis from the school of hard knocks, managing real money for myself and for my family.

Constantly perfecting my craft, I have traded for two decades of success in many different markets. I have been asked to post ideas to some of my students who have taken my course in charting and technical analysis. I have made an excellent living trading stocks for myself.

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