Spekulatius

China will not be irrelevant in rare earth sue they have the cost advantage. I think the goal is to force other nations to buy their products containing rare earth elements because the rare earth metals won’t be available in sufficiently high quantities except for very high priority uses like defense for most counties except China.

Doge and cyber insecurity: https://www.bankinfosecurity.com/whistleblower-complaint-exposes-doge-cybersecurity-failures-a-28046 Disabling logging. Logins from Russia with valid passwords? Using external scraping tools… sound pretty bad to me. We may have all been hacked.

Bought a bit more PBR-A in my tax deferred accounts. I like to recycle the dividends I receive into more shares at opportune times.

I thought it was perfectly clear that China has banned all rare earth exports everywhere for now. What I don’t know is how they have banned products of rare earth exports. My guess is they they restrict for examples magnets (which are made from rare earth like neodymium etc) but not electric motors that are build with these magnets for example. So there will be likely a shortage and economic impact, but my guess is that it won’t be crippling for the west. Gettint rare earth production (mining and processing etc) will take years.

Fentanyl is fairly easy to make and there was an article in the WSJ that the supply chain shifted to India. Soon with the tariffs on ingredients, we will have a plentiful domestic supply, I am sure. The ingredients to produce fentanyl are commonly used for other purposes and I don’t think they are even forbidden to own.

The export controls (technically not an export ban, but practically right now they are) applies to all nations, not just the USA. It is possible that China puts rules in place to allow exports to certain countries , but that would almost certainly disallow trans exports to the US. While those are never perfect, they do restrict access. Right it seems that export licenses from China are almost impossible to get, and if your business has any sort of affiliation with defense, you can forget about it anyways.

While true, the $ value of minerals imported is fairly small. The odd lots podcasts mentioned ~$170M last year from China. Even if prices 10x, its $1.7B - rounding error on the overall scheme of things. This is just arrow the Chinese shoot in the trade war exchange. It costs them very little and creates a problem that costs the adversary way more to address.

You should be worried if the treasury secretary tells you to stop worrying. https://finance.yahoo.com/news/treasury-secretary-scott-bessent-to-americas-biggest-ceos-stop-worrying-121627070.html

More free speech: Wasn’t MAGA compliant enough in this case. But people here complain that a comedian In Britain did got fined 800 GBP for publishing a “funny” clip on YouTube involving “gas the Jews” and that’s supposedly the end on free speech there…

Yep, making more enemies before going to war seems to be the Art of the deal. It doesn’t sound like the Art of War. The Boeing delivery cut is another escalation in the trade war. Trump admin answered by cutting China off from NVDA H20 chip. Some industries are rapidly decoupling between China and the USA. I think the semiconductor industry and equipment producers are particularly exposed here. AMAT and Intel for example have a huge business in China. 5 years from now, it will be much smaller. https://www.reuters.com/technology/nvidia-expects-up-55-billion-charge-first-quarter-2025-04-15/

Agreed, The total value of rare metal imports in the USA was only $170 M last year. of course direct products like magnets are probably 10x that amount , but even that it small. The relatively small value of these imports makes it likely that significant stockpiles exist and any major shortage is unlikely near term. Greenland is not really that valuable from a mineral exploitation perspective in the near term. Unforgiving climate, ice caps and the remote location without infrastructure makes it hard to explore and expensive to exploit. There have been a few mines for fluorides materials etc, but they have been closed down a decade or so. There are certainly resources there, but that’s the case in many place including the USA itself if we search thoroughly enough .

I bet the $150B in claimed savings don’t pass an audit either and at are probably closer to $50B. After all Elon claimed $1B in savings (later revised to $830M) for a survey that nobody knows anything about.

Yes China being an autocratic state with little rule of law is one way to depress a currency but it’s not necessarily currency manipulation.

The key to rare earth is not so much mining, it’s processing. Thats all you need to know about rare earth. I think rare earth Export controls are an Ace card that the Chinese kept in their sleeve for a time they need it and that time is now. It will be very clear in the next few month that the West doesn’t really have a solution , so I expect shortages. I also think that the Chinese will use export of their rare earth as a tool to incentivize trade cooperation for selective countries- at least that’s what I would do if I were in their shoes.

The only manipulation that China does is having very strict controls for moving money out. Those keep the currency high not low. We also know that China intervenes when the Yuan-USD peg breaks towards the downside. The Yuan never was a freely exchangeable currency either. The Peg itself tells us that the Chinese currency exchange rate versus the USD is managed, but it does not tell us in which direction. The likely reason why they do so is because they want to make life simpler for their manufacturing sector which now does not need to worry about exchange rate changes. However, now with US- China trade being sharply reduced due to traffic, I think there is a significant chance, that the currency Peg to the USD doesn’t make sense for them, which means they may change their Peg towards a basket of currencies most likely.

Because Trump thinks that appeasing Russia allows him to make a deal. Making a deal appears to be a goal in itself for Trump, regardless of the outcome or result.

Neither of these solve the rare earth issue.

There is more opportunity to learn skills in manufacturing than in retail but it depends on the specific situation. In many manufacturing business, there isn’t much skill development either. A motivated and smart individual can find opportunities everywhere. I ran a search for manufacturing jobs in my area and Raytheon for example pays $19.5 for a manufacturing associate , which is more or less an entry level job, requiring high school degree only. In realty , people with high school degrees often can’t do simple math and can barely read, so more often than not, those positions get filled with either people who have some college (and then quit) or have a prior job in a similar field. Those jobs require an US passport, which means that it’s related to military business (otherwise, US person would be sufficient).

Because people actually have to work on factory floors. Some jobs in manufacturing are more like service jobs. These are the supply chain guys, admins, HR etc. They never see the factory. But many jobs are actually factory floors jobs. This includes engineers too. Ever worked 8 hours straight in a clean room? I have. Can’t wear make up or have long fingernails (those will punch through gloves) which already kills the job for 1/3 of the women at least from the get go. I run equipment myself (to troubleshoot processes and issues. You need to walk the floor because not all the date gets to your Remote Desktop.Some work is off shift too, because factories run 2 shifts and sometimes 3 so you get off hour issues. Nit that many people want these jobs because manufacturing jobs actually don’t pay that well, Even for factory operators/ workers with some skills can often find easier strive jobs for the same money because the gap between manufacturing jobs and service jobs has closed significantly the last few years. Heck out what a manufacturing associate makes- quick google search ~$20/ h give or take. My son made more than that jobbing at restaurant in his last year in high school. He made almost as much jobbing in our local supermarket. These jobs are also much easier. I have seen quite a few manufacturing tech leave for service jobs for the same or more money, sometimes times working at restaurants, retail, state jobs (much better benefits) and what not. This is not the fifties or 60’s anymore where manufacturing jobs paid much better then service jobs. That story was over 25 years ago and even more so since COVID-19 which lead to a huge bump in lay for service jobs but not for manufacturing jobs. people really don’t want these jobs any more and companies have trouble filling them, Maybe if they pay much more than they do now, but I do not see this happening.

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I think it’s very likely that China’s consumption will go much higher.

The economies would have recovered without WW2. In fact the Nazi cam to power at a great time was great time, when the economy had bottomed anyways in 1933, as other countries In Europe showed. The Nazis turbocharged it with infrastructure spent (the Autobahn network was build and doubled up as a logistics networks for the German army within Germany) and later defense spending. However, even without this stimulus, I think the German economy would ah e recovers albeit slowly.

@John Hjorth One of the guys indeed looks like Trump

I think their idea of belt tightening and mine are quite different. What is interesting is the mentioning ChatGPT as a therapist. I saw a stat that therapy and personal advice is one of the most popular use cases for the AI chatbots. Thats somewhat scary if you are a therapist.

Germany survived losing two world wars, but it wasn’t pretty and a lot of people lost everything. 1929 is not an experience I would look forward to either - 2008 was good enough for me. It took many years to come back from 2008 for many people. Surviving is not thriving. i think there are times to play offensive but I think now is not such a time. Now is a time to be extremely flexible like a trader if that suits you, or play defense if this is not your cup of tea. This is particularly true if you are older and have a hard to to come back from a severe hit to your nest egg.