Tuesday, December 28, 2010

Chinese Monopoly

It is funny how things work out.  The Chinese have designs on being a world power and mother earth has provided them the means in the form of rare earth minerals.  The Chinese are the world supplier of these minerals to the tune of 97%, which gives them a monopoly.  A monopoly is a very good thing if you desire power and money because especially if people cannot live without the item you have a monopoly on, which in this case is so very true.  Think about all the the things that you won't have if the Chinese turn off the tap on these rare earth minerals: computers, solar cells, nice new electric cars, exotic batteries, and a whole host of electronic stuff.  China is our crack dealing pimp and we are all going to be its crack ho's.  We don't have a modern world without these wonderful minerals and China is going to be completely in charge of the world's supply until either new sources are found or they are no longer needed.

This scenario is not as dire as one might imagine because it has happened before and it will happen again.  Think beavers, railroads, oil, and computer chips.  All of these were once monopolies, but by invention or a change in fashion, they were overtaken by something else.  Is it going to suck in the short term having a power hungry communist nation playing the tune to which we will all dance? Sure, but some smart guys some where will figure a way around it or find a new source for these minerals.  They will invent water powered batteries or some crazy thing that will make this all a thing of the past. In the mean time America better get ready for higher prices and shortages because China is playing the tune and we are all going to dance to it.

I wonder if Russia is going to play along nicely or are they going to strike some special deal with the devil.  I know we won't deal, but some of our multinational companies will and that should get us through.  I am sure it will have a chilling effect on the world market as doesn't all government intervention into the global markets.  I wonder if the Chinese will out smart themselves and end up shrinking the market for their goods or will they be smart and screw with it just enough to make an enormous profit.  Greed and power are powerful addictions, so I am betting they will screw it up in the end.  It is funny how we lead the world for so long, but now we are going to be kissing China's booty for the foreseeable future. 

Welcome to the future, better learn at least one dialect of Chinese.

2 comments:

  1. Rare earths are just a temporary problem.

    In a couple of years the molycorp mine will be in full swing.

    There's a couple of mines, one in the US AND the other in Canada that can process heavy rare earths. More money could ease the process/

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  2. Anon,

    Thanks for the input. I figured that the world wouldn't stand for a Chinese monopoly for long and it seems I am correct. It is just going to suck for a few years, which also isn't as bad as I thought. Again thanks for the input and keep it coming.

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