Hot Commodity
The Obligatory War for "Precious" Resources
The world is again at war. This time it is waged over scarce resources. In recent centuries, wars were fought primarily over ideological differences, but now we revert to our primal tendency to fight over tangible goods.
This is an issue of economics that stems from a multifaceted industrial revolution.
Advanced countries now require increasing amounts of rare earth metals to build microprocessor chips and AI data centers for technological advantages in weaponry and data processing. On the other hand, the third world is still in the early stages of electrification and transitioning to cleaner fuels.
The competition for scarce natural resources is creating demand that far outweighs existing supply. All while the world’s currencies are simultaneously being destroyed by government mediocrity and central bank malfeasance.
Systemic currency devaluation has made resources considerably expensive to acquire. The global economic system is designed to artificially pump the valuations of financial assets, but this inflation extends to all goods. Indefinable amounts of debt will be used in this resource feud between the global east and west at the expense of stable money.
The “new space race” is not a cold war of niche scientific advancements; it’s a hot war for critical resources desperately needed to mass produce essential industrial technology.
The technological edge is the shiny prize, but commodities are the means to achieve it. Intellectual property and patented technology are no longer important militarily or in business when diplomacy, espionage, and brute force financial acquisitions are used to obtain the newest innovations.
The real trouble is building the stuff. Anyone can easily find the method for creating the latest and greatest microprocessor plants, but the logistics of finding the materials needed or the power generation required to run the thing are insane.
These multibillion-dollar chip plants are worthless without the necessary neodymium for high-performance magnets or the terbium and dysprosium for fancy optical devices and lasers. Honestly, I didn’t even know half of these elements existed before researching this stuff. I had to pull out a damn periodic table.
The point is that these elements are extremely difficult to obtain, and we will be somehow convinced that we should go to war for these unobtaniums. Notably, China has amassed a strategic monopoly over the procurement of these rare earth metals, which supposedly necessitates substantial economic warfare by the United States.
Now I am not a hardline opponent of, nor am I an advocate for, tariffs on foreign goods. I have expressed before that global trade is inherently skewed because of manipulated exchange rates. Thus, for most advanced nations, it’s actually preferred to source raw materials from foreign nations with shittier currency. Outsourcing is generally a nonissue for Americans who enjoy the privilege of having the world reserve currency. We obtain most resources abroad, so why does it matter that China owns the procurement of these resources?
It appears evident that the United States is losing its monetary supremacy as well as its position as the primary manipulator of commodity markets.
In the past century the United States has been allowed the privilege of centralizing the marketplace for trading and pricing the world’s natural resources. The U.S. dollar and its debt-based derivatives have zero inherent value, yet everything is priced in dollars. It’s all relative value. If you can manipulate the supply of money in tandem with the supply/demand factors of commodities, you can establish whatever currency value is most beneficial.
Simply put, the money we work for is only worth its relation to basic resources like wheat, corn, copper, and oil. The price of those goods is not just determined by their own relationship of supply and demand but also their association with competing currencies.
Everything is comparative, so the ownership of resources and their exchange rate means supreme authority of global prices of all essential goods.
CME Group is the most important institution in global finance, and most people don’t even know who they are or what they do. The Chicago Mercantile Exchange (CME) is the confluence of the New York Mercantile Exchange (NYMEX) and the Commodity Exchange (COMEX) to create a centralized marketplace for trading commodities. It is the world’s largest operator of financial derivatives for trading agricultural products, currencies, energy, precious metals, and the futures/options of nearly every commodity on earth.
This organization facilitates the manipulation of markets by Wall Street and our own government. This is where free markets and supply/demand valuations go to die. They dictate what crops we grow on our farms, what kind of gas we put in our cars, which country we source raw materials from, and how much inflation we see or feel every single day.
Our government subsidizes the domestic production of very specific raw materials that ensure the stable value of our currency relative to the rest of the world. These resources dictate the value of the dollar and its exchange rate with foreign currency and exports. The food we grow is intended for stable markets, not consumption. The oil we pump out of the ground is for foreign trade, not for domestic use.
There are clear incentives to grow endless acreage of corn and soybeans, not because people love to eat corn and soybeans, but because the CME Group dictates that those crops give a highly consistent yield for certain acreage with the right government subsidization. All of the processed food and ethanol gasoline is just a byproduct of supply glut.
The tendency to produce and consume massive amounts of petroleum is not just for simple energy and transportation usage. Oil is endless, so it’s the perfect arbiter of constant foreign trade and stable currency. Our consumption of petroleum-based pharmaceuticals, plastics, and clothing is just another “choice” shoved down our throats.
Our landscape, our occupations, and even our eating habits are dictated by overproduction of specific raw materials that have an easily manipulated supply. It has nothing to do with inherent consumer demand. If that were the case, you would see fields of organic fruits and vegetables lining American interstates instead of canola. You would see store shelves full of handmade American products instead of plastic crap from Southeast Asia.
We truly crave locally made, quality goods, but we have been force-fed a bunch of cheap nonsense that degrades our health so our government can pretend that we have stable money. The reality is that our currency has inflated into absolute obscurity that only affords state-mandated products full of cheap commodities manipulated by Wall Street.
This is the true nature of our economy.
However, this only works for resources of which the supply can be controlled. We produce massive allocations of the world’s oil, grain products, and technology (software), so we can dictate prices and keep our currency somewhat level with the rest of the world. Any resources we can’t produce domestically can be outsourced to an undeveloped nation with piss-poor currency or nonexistent political autonomy.
The global economy continues to work for us if the correct levers of militaristic and financial antagonism are pulled timely and regularly to keep resources cheap. “Cheap” meaning ideally priced relative to our dying currency.
This is why China’s monopoly of rare earth metals is concerning. The United States does not have the leverage to manipulate the market of these resources. We do not have a strategic supply nor reliable procurement of the resource and fiddle with the supply/demand factors to manipulate the price. China has cornered this market of commodities while simultaneously subverting the global monetary system where the dollar remains supreme.
The war of resources is not merely waged with a capricious arms race for technological capabilities. It is a monetary war waged with the hoarding of precious metals and favorable currency pairs. Fiat currency is dying as the relative values become too egregious to ignore. The eastern nations are storing metric tons of gold in their vaults and making pivotal trade deals to establish their own monetary system and commodity exchange.
Why wouldn’t they?
The current system is clearly a detriment to their foreign trade and domestic purchasing power. They understand the trends of new technology, so they hurried to acquire the resources necessary to build the infrastructure independent from U.S. financial pressures. Some might say that we have done the same thing in the past.
I don’t know if their intention is malicious and they intend to make us adversaries in a war of advanced weaponry. I’d say it’s more likely they intend to make us customers.
Personally, I don’t need any dysprosium.
I don’t care if Microsoft doesn’t have enough neodymium to build massive data centers that steal drinking water from my state and make electricity prices unreasonable.
I certainly do not want my own government’s aptly named Department of War to have unlimited access to terbium to build a bunch of autonomous drones to drop bombs on foreign nations.
I understand the need for our country to produce its own resources or at least have access to freely trade for materials it cannot produce itself. Nevertheless, the things that are important to me, and I assume most people, fall under the categories of food, water, building materials, and energy.
Perhaps we should devote more efforts to subsidizing or at least incentivizing the domestic productions of those things over rare earth metals that will be used for more self-guided missiles and needless AI microprocessors.
A commodity is defined as a thing that is useful or valuable. These mysterious rocks in the ground don’t have any tangible value except for their ability to better our lives. If these things are used to destroy or enslave us in some AI-driven nightmare of endless consumption, maybe they’re just not that valuable.
Regardless of any manipulated valuations from some corrupt mercantile exchange, we choose the value of any given resource on this Earth. And if something starts to look ridiculously expensive, try pricing it in gold or silver instead of U.S. dollars.
The saying goes that you are what you eat. But they also say that you reap what you sow. Therefore, if we sow what CME Group determines is the best low-risk return on investment for a stable exchange rate of global currencies…
What does that say about us?