Panic in Tokyo: The Rare Earth Metal Godzilla

Source:

". . .these metals 'will be for China what oil was for Saudi Arabia.'"

When the news broke in Tokyo, it was said that "Head Freds" at Toyota and Honda literally fell out of their chairs in shock.

According to a March 2009 UK Times report, "[It] has triggered what government sources in Tokyo said was an invisible tsunami of panic in Japanese industry."

Oddly enough, the same event happened five months earlier—in November 2007—with the same result. . .

According a November 23 article in The Straits Times, "Japanese government officials are scrambling around the world while companies are nearly on their knees begging foreign governments to sign partnerships."

What Had the Japanese in such a State of Panic?

Its old foe—China—had just served some revenge.

In a stunning turnaround, the Chinese Communist Party announced further export restrictions of a vital group of commodities. Without them, the Japanese auto industry would come to a screeching halt.

Why?

Toyota's hottest selling car—and its future—is the hybrid Prius. Each Prius contains roughly 40–60 pounds of rare earth metals.

We're calling them "Dragon Metals" (DM) because the Chinese account for 97% of global production. They literally own the market.



According to MarketWatch, "China is the Saudi Arabia of [Dragon Metals]. And like oil, [Dragon Metals] will flow to the highest bidder."

In fact, Deng Xiaoping said that these metals "will be for China what oil was for Saudi Arabia."

Japan's tech economy depends on these metals. They have identified 31 Dragon Metals, including lithium, that are vital to the future of the tech economy. Because Toyota plans to double the Prius' fuel economy, each car will require MORE rare earth metals than it does now. It all adds up to tremendous demand.

But with Every Crisis Comes Opportunity

And as an investor, this is where you can make a legendary fortune.

In fact, on August 26, I told you how to play the lithium market by buying for $1 a share. Today, it trades for $1.25. . .and has gotten as high as $1.50 since then.

But there are other ways to play the rare earth market. Following are two ways to play this situation:
  1. Invest directly into China's electric car market; and
  2. Invest in DM exploration outside of China.
The world won't sit by and become dependent on a vital resource like it did with oil and OPEC.

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