With a world on the edge of chaos, China’s edge will bring about a great bull market in gold.

A Sharp Rise In Gold Is Inevitable
Stephen Leeb:  “
The case I’ve been making for gold is inseparable from my belief that China and the East will continue to play an ever larger economic role on the world stage at the expense of the U.S. and the West. In previous interviews I’ve focused on various reasons to believe the East’s rise is unstoppable and therefore a sharp rise in gold is inevitable, even if short-term dips may lie in store…

Here, probably inspired by Memorial Day weekend, which evokes thoughts of Americans all over the country packing up the car for a long weekend at the beach or in the mountains, I’m offering yet another reason for betting on China: the battle of electric vehicles (EVs). It contains in microcosm much of the reason for China’s edge over us as the 21st century proceeds, an edge that we seem helpless to challenge.

For most Americans, readers, EVs are virtually synonymous with Tesla Motors, the U.S. maker of EVs headed by Elon Musk, founder of Pay Pal and Space X and an entrepreneur of boundless confidence and ambition. Even if you’re not particularly interested in cars, you may have noticed that Tesla – which has yet to turn a profit – has been in the news lately as its market cap has roared past that of traditional car manufacturers like Ford. In fact, for many Americans, Tesla has become an iconic symbol of U.S. tech. It is the company which will show the world who really is in charge when it comes to next generation energy products.

Meanwhile, I’d bet that most readers have never heard of the Chinese company BYD, which also makes and sells EVs. While Tesla may have all the glamor and name recognition for now, BYD and other Chinese EV makers have some more substantial pluses, starting with their ability to use a more efficient type of engine as a result of China’s greater access to certain critical resources.

Two types of engines can be used in making EVs. One is an induction engine, which, just as in an induction stove, creates its own magnetic field. The other is based on permanent magnets (PM), which come with their own powerful magnetic field. The PM engine is the superior choice, as it’s both lighter and more efficient than the induction engine and results in better performance.

The catch is that permanent magnets – which beyond cars have many other critical uses, including their role in advanced military technology – aren’t easy to come by. That’s because they are made from the hard-to-mine, hard-to-process materials known as rare earth metals. And not just any rare earth metals, but heavy rare earth metals, which are the ones that are truly rare. 

And that’s too bad for the U.S. and for Tesla, because – in contrast to China –we’ve languished when it comes to developing rare earth metals. China starts out with the indisputable advantage of having the world’s largest deposits. But beyond this natural endowment, China is the only country with the capabilities of bringing the mined ore through the complex series of steps needed to transform it into the end product, permanent magnets. When rare earth ore is mined, the heavy rare earths among them need to be separated out. Because rare earths are radioactive, the separation and subsequent processing require enormous care and expertise. The supply chain that transforms rare earth ore into a usable product has at least seven or eight links. It’s a difficult, messy, and expensive process, but the end result is an energy source that is essentially limitless and virtually free once you deduct the costs of getting there.

Coming back to the battle of the EVs, lack of access to rare earths and permanent magnets has forced Tesla to use the induction engine in its cars. Chinese manufacturers of EVs mostly use PM engines, giving them a big edge in producing cars that perform better. …..More Here