Is chess non-violent war?

Does the player who doesn’t make the last mistake usually win?

After the game

the king and pawn go into the same box

Italian proverb

The more captured opposing pieces the less risk

and vice versa

Do some football running backs fake left and go right

to mislead the defense to commit in the wrong direction?

All warfare is based on deception

…when able to attack we must seem unable

when using our forces we must seem inactive

when we are near, we must make the enemy believe we are far…

when far away, we must make him believe we are near

Sun Tzu

What Hyperinflation reads like; "Venezuelan shoppers amass outside seized stores" "Venezuela Stock Market Up 454% for the Year"

"As soon as Dorisbell Pena received a text message informing her that President Nicolas Maduro seized control of a nationwide chain of appliance stores Friday, she rushed to the nearest outlet in the hopes of finding what's become one of the scarcest items of all these days in Venezuela: a bargain.

A 34-year-old teacher, Pena has watched as the price of a new stove she needs has doubled in recent weeks to 40,000 bolivars even as her 2,500 bolivar-a-month salary stays the same.

"I've got to take advantage of this opportunity today because tomorrow the prices keep going up," Pena said while huddled among friends on the concrete sidewalk outside the Tiendas Daka store in the eastern Caracas neighborhood of Bello Monte.

She's not alone. At 1:30 a.m., shoppers were still arriving to join the hundreds who began amassing in the afternoon after price inspectors said they found evidence of "usury" and Maduro ordered the chain's "occupation." In a televised address Friday night, the president vowed to reopen the stores Saturday and unload their stock of plasma televisions, washing machines and other seized merchandise at "fair prices."

..."I heard the owners of this store don't even live in Venezuela, they're in Miami," said Solano, a 49-year-old salesman of engine varnish...

"Leave nothing on the shelves, leave nothing in the warehouses," he said. ...he also ordered the military to shut down businesses found hoarding products or speculating on prices.

The Friday night frenzy, described by one bargain hunter as an "organized looting," cut across Venezuela's normally insurmountable political divide — a reflection of how near-record 54 percent inflation and shortages of basic goods such as milk and toilet paper are affecting all families in South America's biggest oil producer.

Come nightfall, National Guardsmen, some brandishing assault rifles, helped maintain order..."

http://news.yahoo.com/venezuelan-shoppers-amass-outside-seized-stores-134255341.html

"Venezuela Stock Market Up 24% For Week -- Up 454% for the Year

Athenian money…defined a pattern
which was to repeat in other empires which were to follow
dominance of trade
influx of gold to balance exports
public wealth
liberty
overconfidence
the discovery of loosely managed money
as a stimulating solution to stagnation in an economy near its zenith…
before finally the emptiness of the monetary promise was exposed
leading to rapid national collapse

 

Paul Tustain

The Venezuela Stock Market is now up 454% for the year to date in bolivar terms, though only 278% in official rate dollar terms because of a February devaluation, but still making it the best performing stock market in the world."

http://www.laht.com/article.asp?ArticleId=1145054&CategoryId=10717
.
.

What does Quantitative Easing mean?

When national debts have once been accumulated to a certain degree

[there has never been] a single instance

of their having been fairly and completely paid

The liberation of the public revenue...

has always been brought about by bankruptcy

though frequently by a pretended payment [through inflation]

Adam Smith

Moral philosopher and Father of Modern Economics

If Germany’s central bank suspended the right
to redeem gold backed Reichsmarks during World War I
and 170 Reichsmarks bought an ounce of gold in January 1919,
why did an ounce of gold cost 87,000,000,000,000 Reichsmarks
in November 1923?

Ponzi finance units must increase its outstanding debt

in order to meet its financial obligations

A transition occurs over the course of an expansion

as increasingly risky positions are validated by the booming economy

that renders the built in margins of error superfluous

encouraging adoption of riskier positions

Eventually, either financing costs rise

or income comes in below expectations

leading to defaults on payment commitments

"frequently by a pretended payment [through inflation]"

Hyman Minsky

 

The United States is doing the same thing, except we have the world's reserve currency at the moment.  When Venezuela's currency becomes worthless, the population will most likely adopt the US Dollar as a means of commerce, much like the black market does currently.

 

Next up may be Argentina, Vietnam or some other more centrally run nation who are functionally bankrupt as we are, but without the military firepower and financial infrastructure.  Having oil and other commodities priced in US dollars is key to maintaining a better position than Europe, Russia and China.

"Russian military presence in Syria"

"Russian military advisers are manning some of Syria's more sophisticated air defenses
– something that would complicate any future US-led intervention...

The advisers have been deployed with new surface-to-air systems and upgrades of old systems,
which Moscow has supplied to the Assad regime since the Syrian revolution broke out 21 months ago.

The depth and complexity of Syria's anti-aircraft defences
mean that any direct western campaign, in support of a no-fly zone
or in the form of punitive air strikes against the leadership,
would be costly, protracted and risky.

The possibility of Russian military casualties in such a campaign
could have unpredictable geopolitical consequences.

...The UN has put the death toll at more than 40,000 as the war continues to escalate.

War is cruelty

The crueler it is 

the sooner it's over

General William Tecumseh Sherman

Employed "scorched earth" tactics against the Confederacy

Turkish officials, who accurately predicted the Syrian regime would use Scud missiles
after several warplanes were shot down by rebels,
also believe President Bashar al-Assad has twice come close to using chemical weapons
including sarin, the nerve gas.

First, after the bombing of the regime's Damascus security headquarters in July,
which killed the president's brother in law
...and then last month, after opposition forces made significant gains.

The Turks and western officials say there are signs Assad sees chemical weapons
as another step in the escalation of force,
rather than a Rubicon-crossing gamble that could end his regime.

I don't care if I follow your rules, if you can cheat, so can I

I won't let you beat me unfairly, I'll beat you unfairly first

Ender Wiggin

Fictional Military Strategist

The US, UK, France and Turkey have warned Syria
that its use of such weapons would trigger military retribution.

But any such a response would be fraught with difficulties.

...The upgrades were supplied by Moscow,
which sees them as a bulwark against western-imposed regime change
and protection of a longstanding investment in Syria.

The country includes Russia's biggest electronic eavesdropping post outside its territory,
...and its toehold on the Mediterranean, a small naval base at Tartus.

...the air defence command, comprises two divisions and an estimated 50,000 troops
– twice the size of Muammar Gaddafi's force
– with thousands of anti-aircraft guns and more than 130 anti-aircraft missile batteries.

...recent Russian deliveries include Buk-M2 and Pantsyr-S1 (known to Nato as SA-22)
mobile missile launch and radar systems.

Reports of the shipment of the modern long-range S-300 have not been confirmed...

It is possible they have been delivered but are not yet operational.

...Sources familiar with the Moscow-Damascus defence relationship
confirmed the presence of Russian air-defence crews inside Syria.

...Such a dense, layered and overlapping air-defence system would require a huge air campaign,
heavily reliant on thousands of precision-guided missiles.

The robust Syrian defences, combined with Damascus's hand-in-glove relationship with Moscow,
and the fragmented nature of the opposition,
help explain why a US-led intervention – predicted as imminent for more than a year
...has so far failed to materialise,
and why there is little appetite for such a move in Washington and most other western capitals,
barring a major, verifiable use of chemical weapons by the Assad regime."

Guardian

If credit peaksdoes employment, globalization and peace?

 We have lent a huge amount of money to the US

so of course we are concerned about the safety of our assets

 

Frankly speaking, I do have some worries

 

Chinese Premier Wen Jiabao

 

US Insists China Fears Over Debt Unfounded

The Wall Street Journal

 

If Executive Order 6102, signed on April 5, 1933

let the Federal Reserve confiscate gold for $20.67 per troy ounce

and the government raised the price to $35 not long after

 

did the US government devalue the dollar by 41%?

 

The Gold Reserve Act of 1934…

changed the value of the dollar in gold

from $20.67 to $35 per ounce

 

This price remained until August 15, 1971

when President Richard Nixon

announced that the United States

 would no longer convert dollars to gold at a fixed value

thus abandoning the gold standard for foreign exchange

 

Wikipedia

Have the leaders of most emerging economies

essentially been stealing their citizens’ savings

by lending money to developed economies

to keep currency exchange rates relatively low

to encourage more sales of manufactured goods?

 

If global central bank foreign exchange reserves more than tripled

as the US dollar fell by ~50% since 2000

did Americans buy manufactured goods from foreign nations

with IOUs that are now worth about half as much?

 

Who is the largest holder of US Treasury debt?

 

What could happen

if a generation of underemployed, underpaid

educated and indebted young adults

become disillusioned by their elders’ financial mismanagement

and seek to identify and punish those responsible?

Why would the US Military and the IEA have contradictory oil supply outlooks?

US military warns oil output may dip causing massive shortages by 2015

..."By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the [Joint Operating Environment report from the US Joint Forces Command]...

It adds: "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

The US military says its views cannot be taken as US government policy but admits they are meant to provide the Joint Forces with "an intellectual foundation upon which we will construct the concept to guide out future force developments."

...The Paris-based International Energy Agency remains confident that there is no short-term risk of oil shortages but privately some senior officials have admitted there is considerable disagreement internally about this upbeat stance.

Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world.

...Glen Sweetnam, main oil adviser to the Obama administration, admitted that "a chance exists that we may experience a decline" of world liquid fuels production between 2011 and 2015 if the investment was not forthcoming.

...The Joint Operating Environment report paints a bleak picture of what can happen on occasions when there is serious economic upheaval. "One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest," it points out.

Terry Macalister
 guardian.co.uk, Sunday 11 April 2010

Don’t make bets you can’t afford to lose when confronting an opponent with unlimited resources who can arbitrarily change the rules.

I don't care if I follow your rules, if you can cheat, so can I.

 

 I won't let you beat me unfairly, I'll beat you unfairly first.

 

Ender Wiggin

Fictional Military Strategist

Geo-Politics and business is Zugzwang

Zugzwang…describes a situation where one player is put at a disadvantage because he has to make a move – the player would prefer to pass and make no move. The fact that the player must make a move means that his position will be significantly weaker than the hypothetical one in which it is his opponent's turn to move.

A player whose turn it is to move who has no move that does not worsen their position is said to be in zugzwang.

In a chess endgame, being in zugzwang usually means going from a drawn position to a loss or a won position to a draw, but it can be from a win to a loss, or a substantial loss of material which probably affects the outcome of the game.

Zugzwang
Wikipedia

I have studied the enemy all my life
 
I have read the memoirs of his generals and his leaders

I have even read his philosophers…

I have studied in detail the account of every damned one of his battles

I know exactly how he will react under any given set of circumstances
and he hasn’t the slightest idea of what I’m going to do

So when the time comes, I’m going to whip the hell out of him

George S Patton

What does a carnivore look for in the face of its prey and why?

If mold continues to multiply after eating half a piece of cheese
what happens when demand exceeds supply?

Are there times when compromise isn’t appropriate?

Should you do what you need to whether you like it or not
sooner than later?

Is the definition of civilized changing again?

I don't care if I follow your rules, if you can cheat, so can I

I won't let you beat me unfairly, I'll beat you unfairly first

Ender Wiggin
Fictional Military Strategist

Why do survivors survive?

Is stability a legitimate reason to stifle justified dissent?

On Chess: Are chances better for players who more accurately calculate probabilities the farthest into the future?

Known and unknown
you were, are and will be pieces of varying value
in an infinite number of games

You may or may not be playing the games you think

If opponents don’t begin with pieces of the same number and value
and players can think they’re winning when losing
can influencing others’ thoughts enhance results
and vice versa?

Is chess non-violent war?

Does the player who doesn’t make the last mistake usually win?

After the game
the king and pawn go into the same box

Italian proverb

The more captured opposing pieces the less risk
and vice versa

Do some football running backs fake left and go right
to mislead the defense to commit in the wrong direction?

All warfare is based on deception
…when able to attack we must seem unable
when using our forces we must seem inactive
when we are near, we must make the enemy believe we are far…
when far away, we must make him believe we are near

Sun Tzu

Politics = Chess III

In chess, a fork is a tactic
that uses one piece to attack two or more of the opponent's pieces
at the same time,
hoping to achieve material gain
(by capturing one of the opponent's pieces)
because the opponent can only counter one of the two (or more) threats.

http://en.wikipedia.org/wiki/Fork_(chess)

If big print can give what fine print takes
can winning the wrong game lose the right one?

On Resource War

Calling All Future-Eaters

The human species during its brief time on Earth has exhibited a remarkable capacity to kill itself off.

 The Cro-Magnons dispatched the gentler Neanderthals.

The conquistadors, with the help of smallpox, decimated the native populations in the Americas.

Modern industrial warfare in the 20th century took at least 100 million lives, most of them civilians.

...Homo sapiens, as the biologist Tim Flannery points out, are the "future-eaters."

In the past when civilizations went belly up through greed, mismanagement and the exhaustion of natural resources, human beings migrated somewhere else to pillage anew. But this time the game is over. There is nowhere else to go.

The industrialized nations spent the last century seizing half the planet and dominating most of the other half. We giddily exhausted our natural capital, especially fossil fuel, to engage in an orgy of consumption and waste that poisoned the Earth and attacked the ecosystem on which human life depends. It was quite a party if you were a member of the industrialized elite. But it was pretty stupid.

Collapse this time around will be global. We will disintegrate together. And there is no way out. The 10,000-year experiment of settled life is about to come to a crashing halt. And humankind, which thought it was given dominion over the Earth and all living things, will be taught a painful lesson in the necessity of balance, restraint and humility.
There is no human monument or city ruin that is more than 5,000 years old.

 Civilization, Ronald Wright notes in "A Short History of Progress," "occupies a mere 0.2 percent of the two and a half million years since our first ancestor sharpened a stone."

..."Whether human beings would still be a force on the planet, or even survive, is a moot point," ...Clive Hamilton in his book "Requiem for a Species...writes. "One thing is certain: there will be far fewer of us."

We have fallen prey to the illusion that we can modify and control our environment, that human ingenuity ensures the inevitability of human progress and that our secular god of science will save us. The "intoxicating belief that we can conquer all has come up against a greater force, the Earth itself," Hamilton writes. 

...We face a terrible political truth. ...Decisions about the fate of the planet and human civilization are in the hands of moral and intellectual trolls...

...lobbyists make the laws. Their public relations firms craft the propaganda and trivia pumped out through systems of mass communication. Their money determines elections. Their greed turns workers into global serfs and our planet into a wasteland. ...They cannot be reformed or trusted.

...We will either defy the corporate elite...or see ourselves consumed.

Time is not on our side.

...The future, if we remain passive, will be wrested from us by events.

Chris Hedges
Common Dreams

"German military report: Peak oil could lead to collapse of democracy"

German military report: Peak oil could lead to collapse of democracy

Peak oil has happened or will happen some time around this year, and its consequences could threaten the continued survival of democratic governments, says a secret Germany military report that was leaked online.

...the report from a think-tank inside the German military warns that shrinking global oil supplies will threaten the world's economic foundations and possibly lead to mass-scale upheaval within the next 15 to 30 years.

By some estimates there will be an average of 2% annual growth
in global oil demand over the years ahead,
along with conservatively a 3% natural decline in production
from existing reserves.

Richard Bruce Cheney

International trade would suffer as the cost of transporting goods across oceans would soar, resulting in "shortages in the supply of vital goods," the report states, as translated by Der Spiegel.

The result would be the collapse of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse," the report states.

That collapse could, in turn, cause many countries to abandon free markets principles...

Deals would be struck between oil-exporting and oil-importing countries that would fix prices and remove large amounts of oil from the global market place.

...the report also warns that the economic crisis caused by shrinking oil supplies and skyrocketing prices could be seen by the general public as a failure of market economics as a whole -- and with it, the political institutions that created those economic systems.

Public anger at the existing system would create "room for ideological and extremist alternatives to existing forms of government." Populations would fragment along political lines and "in extreme cases" this could "lead to open conflict."

Peak oil -- which refers to the moment when the world's production of oil begins to shrink -- is a controversial concept, but few doubt the basic logic underlying it: That eventually the world's finite supply of oil will run out...

If US mainland oil discovery peaked in the 1930’s,
leading to a production peak in the early 1970’s,
and world discovery peaked in the 1960’s,
when should global oil production peak?

With the report, Germany joins the growing ranks of Western governments apparently alarmed by the prospect of peak oil.

Last Sunday, the UK Observer reported that Britain's Department of Energy and Climate Change is refusing to release documents related to peak oil...

...a report from the US Joint Forces Command stated that "by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day."

 

If Iran and India cut a deal to deliver more Iranian oil to India
and reduce exports to China,
should China resort to military action to prevent it?

The report continued, "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

Daniel Tenser
The Raw Story

Would you rather live in the ascendancy of a civilization, or in its decline?

Sun Could Set Suddenly on Superpower as Debt Bites

...what if history is not cyclical and slow-moving but arhythmic, at times almost stationary, but also capable of accelerating suddenly, like a sports car?

Can non-random events cause random effects?

What if collapse does not arrive over a number of centuries but comes suddenly, like a thief in the night?

Great powers and empires are complex systems, which means their construction more resembles a termite hill than an Egyptian pyramid. They operate somewhere between order and disorder...

Such systems can appear to operate quite stably for some time; they seem to be in equilibrium but are, in fact, constantly adapting.

Does complexity increase the likelihood of complication?

But there comes a moment when complex systems "go critical". A very small trigger can set off a phase transition from a benign equilibrium to a crisis.

Complex systems share certain characteristics. A small input to such a system can produce huge, often unanticipated changes, what scientists call the amplifier effect.

The flapping of a single butterfly's wing today produces a tiny change…
…so, in a month's time
a tornado that would have devastated the Indonesian coast doesn't happen
or maybe one that wasn't going to happen does

Ian Stewart
The Mathematics of Chaos

Empires exhibit many of the characteristics of other complex adaptive systems, including the tendency to move from stability to instability quite suddenly. But this fact is rarely recognised because of our addiction to cyclical theories of history. The Bourbon monarchy in France passed from triumph to terror with astonishing rapidity. The sun set on the British Empire almost as suddenly. The Suez crisis in 1956 proved that Britain could not act in defiance of the US in the Middle East, setting the seal on the end of empire.

What are the implications for the US today?

The most obvious point is that imperial falls are associated with fiscal crises: sharp imbalances between revenues and expenditures, and the mounting cost of servicing a mountain of public debt.

Did Spanish money become worth less
after the Emperor borrowed against 100 years of future tax revenue
to pay for war against England?

Think of Spain in the 17th century: already by 1543 nearly two-thirds of ordinary revenue was going on interest on the juros, the loans by which the Habsburg monarchy financed itself.

Did France execute relatively the same strategy
with similar consequences not long after?

Or think of France in the 18th century: between 1751 and 1788, the eve of Revolution, interest and amortisation payments rose from just over a quarter of tax revenue to 62 per cent.

Nations are not ruined by one act of violence
but quite often, gradually, and almost imperceptibly
by the depreciation of their currency through excessive quantity

Nicolas Copernicus
Discovered Earth was not the center of the Universe

Alarm bells should therefore be ringing very loudly indeed in Washington, as the US contemplates a deficit for 2010 of more than $1.64 trillion, about 10 per cent of GDP, for the second year running...

...what is even more terrifying is to consider what ongoing deficit finance could mean for the burden of interest payments as a share of federal revenues.

...the fiscal position of the US is at present worse than that of Greece.

For now, the world still expects the US to muddle through...

...even if rates stay low, recurrent deficits and debt accumulation mean that interest payments consume a rising proportion of tax revenue. And military expenditure is the item most likely to be squeezed to compensate because, unlike mandatory entitlements (social security, Medicaid and Medicare), defence spending is discretionary.

If the US government dramatically increases Treasury debt issuance
while the rest of the world’s purchasing needs fall if global economic growth declines
should US long term interest rates eventually rise to attract investment?

It is, in other words, a pre-programmed reality of US fiscal policy today that the resources available to the Department of Defense will be reduced in the years to come. Indeed, by my reckoning, it is quite likely that the US could be spending more on interest payments than on defence within the next decade.

And remember: half the federal debt in public hands is in the hands of foreign creditors. Of that, a fifth (22 per cent) is held by the monetary authorities of the People's Republic of China, down from 27 per cent in July last year. It may not have escaped your notice that China now has the second-largest economy in the world and is almost certain to be the US's principal strategic rival in the 21st century, particularly in the Asia-Pacific. Quietly, discreetly, the Chinese are reducing their exposure to US Treasuries. Perhaps they have noticed what the rest of the world's investors pretend not to see: that the US is on a completely unsustainable fiscal course, with no apparent political means of self-correcting. That has profound implications not only for the US but also for all countries that have come to rely on it, directly or indirectly, for their security.

If Iran and India cut a deal to deliver more Iranian oil to India
and reduce exports to China
should China resort to military action to prevent it?

Australia's post-war foreign policy has been, in essence, to be a committed ally of the US.

But what if the sudden waning of American power that I fear brings to an abrupt end the era of US hegemony in the Asia-Pacific region? Are we ready for such a dramatic change in the global balance of power?

Judging by what I have heard here since I arrived last Friday, the answer is no. Australians are simply not thinking about such things.

I don't have a clue of what weapons
will be used in World War III
but World War IV will be fought with sticks and stones

Albert Einstein

...dramas lie ahead as the nasty fiscal arithmetic of imperial decline drives yet another great power over the edge of chaos.

Niall Ferguson is professor of history at Harvard University.

The ultimate result of shielding men from the effects of folly,
is to fill the world with fools.

Herbert Spencer
Coined the phrase “Survival of the fittest”

Chess I

The chess board is the world
the pieces are the phenomena of the universe
the rules of the game are what we call the laws of nature
the player on the other side is hidden from us

Thomas Huxley

Are the only two certainties
that there are at least two players
you and everything that’s not?

Think does not = Chess II

The great majority of mankind are satisfied with appearance
as though they were realities,
and are often more influenced by the things that seem than those that are.

Niccolo Machiavelli

If opponents don’t begin with pieces of the same number and value,
and players can think they’re winning when losing ,
can influencing others’ thoughts enhance results,
and vice versa?

If opponents think you have more influence and power,
do you?

"Workers recalled as North Korea prepares for war"

"A mass exodus of North Korean workers from the Far East of Russia is under way...

As the two Koreas edged towards the brink of war this week, it appears that the workers in Russia have been called back to aid potential military operations.

...North Korean workers had left the town of Nakhodka en masse shortly after the escalation of tension on the Korean peninsula earlier this week. "Traders have left the kiosks and markets, workers have abandoned building sites, and North Korean secret service employees working in the region have joined them and left,"...

..."North Korea's government sends thousands of its citizens to Russia to earn money, most of which is funnelled through government accounts," says Simon Ostrovsky, a journalist who discovered secret North Korean logging camps in the northern Siberian taiga. "Workers are often sent to remote locations for years at a time to work long hours and get as little as three days off per year." Now it appears that some kind of centralised order has been given for the workers to return home.

Russia's Pacific port of Vladivostok is thousands of miles and seven time zones from Moscow, but only around 100 miles from the country's heavily controlled border with North Korea. ...There are even two North Korean restaurants in the city. It is not known how many of the workers in other Russian towns have been called back to their homeland this week, or whether the exodus is permanent or temporary."

Shaun Walker

"ordered strikes on North Korea’s missile base if the North made any “indication of further provocation,”"

"The South Korean military went to “crisis status” on Tuesday and threatened military strikes after the North fired dozens of shells at a South Korean island...in the same area that a South Korean naval vessel, the Cheonan, was sunk in March, killing 46 sailors...

President Lee Myung-bak...ordered strikes on North Korea’s missile base if the North made any “indication of further provocation,”...

...The new clash came just days after an American nuclear scientist who visited North Korea earlier this month said he had been shown a vast new facility built secretly and rapidly to enrich uranium."

New York Times

Why is China restricting rare earth metals?

"Rare Earth in BlackBerry to Prius Underscores Alarm Over Supply

Rare-earth elements help give BlackBerrys their buzz, Toyota Priuses their battery power, and computer hard drives their spin.

The rare earths, a group of 17 metals including neodymium, lanthanum, cerium and europium, also have industrial and national-security uses, such as in petroleum refining, fiber- optics transmission, and military radar and missile-guidance systems.

The range of uses explains why U.S. lawmakers, officials in Japan and Germany and manufacturers of components that need these materials say they are alarmed by steps taken by China, which provides 97 percent of the world’s supply, to reduce exports by about three-quarters.

Components made with rare earths are so ubiquitous that they aren’t easily replaced, according to Jack Lifton, founder of Technology Metals Research LLC in Detroit, which advises investors in specialty metals. “Without anyone noticing, the rare-earth magnets have become overwhelmingly essential,” he said yesterday.

Rare-earth magnets account for 80 percent of the market for “permanent” magnets that retain their charge, up from zero in 1980, he said. They are in electric motors, small earphones and mobile phones. When a BlackBerry vibrates, a high-powered magnet made with neodymium is at work converting electrical power into mechanical energy.

“They are pervasive in our technology, especially in miniaturization of electronics,” Lifton said.

Automakers relying on neodymium-iron-boron magnets, used in power-steering equipment, “are concerned about long-term access to under-the-hood magnets because they import them from China and Japan,” Lifton said in a phone interview.

...While the elements aren’t as rare in nature as the name implies, they are difficult to find in profitable concentrations, expensive for Western producers to extract and often laced with radioactive elements. China has come to dominate the market because it has been able to produce the elements more cheaply and with fewer environmental restrictions than its competitors.

Japan, the largest importer of Chinese rare-earth materials, has said China halted shipments to Japanese users last month after a collision in disputed waters between a Chinese trawler and the Japanese Coast Guard led to the fishing- boat captain’s detention. Chief Cabinet Secretary Yoshito Sengoku said Oct. 20 that the import situation “hadn’t changed” weeks after the captain’s release.

Chinese Delays

China said this week that it hasn’t suspended shipments to the U.S. and Europe, as reported on Oct. 20 by the New York Times. Chinese customs officials are delaying shipments by various means, such as imposing extra inspections, according to industry participants who spoke on condition of anonymity because of concern about Chinese reaction.

China’s 72 percent reduction in export quotas for the second half of this year, which it announced in July, and the customs delays since then are driving up prices.

...Prices have climbed sevenfold in the last six months for cerium oxide, which is used for polishing semiconductors, and other elements have more than doubled...

China accounts for about 36 percent of global rare-earth reserves, the largest share, and the U.S. is second, with 13 percent, according to the U.S. Geological Survey.

...Makers of catalysts for the oil-refining industry are among the major users of rare earths in the U.S....lanthanum, used to break down heavy crude into light crude...

Lanthanum also is used for nickel-metal hydride batteries that power hybrid cars...

...Commercial and military airplanes also use samarium-cobalt magnets for power generation...

...Neodymium-based magnets also are used in wind turbines..."

Gopal Ratnam

World Trade War 2010

"China to Halt Some Exports to U.S.

China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of those materials to the United States and Europe, three industry officials said on Tuesday.

The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West.

...“The embargo is expanding” beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.

They said Chinese customs officials imposed the broader restrictions on Monday morning, hours after a top Chinese official summoned international news media Sunday night to denounce United States trade actions.

China mines 95 percent of the world’s rare earth elements, which have broad commercial and military applications, and are vital to the manufacture of products as diverse as cellphones, large wind turbines and guided missiles. Any curtailment of Chinese supplies of rare earths is likely to be greeted with alarm in Western capitals, particularly because Western companies are believed to keep much smaller stockpiles of rare earths than Japanese companies.

China experts said on Tuesday that Beijing’s assertive stance on rare earths might also signal the ascendance of economic nationalists, noting that the Central Committee of the Communist Party convened over the weekend.

...Industry executives said there had been no signal from Beijing of how long rare earth shipments intended for the West would be held by Chinese customs officials.

...Word of the blocked shipments emerged from industry executives on Tuesday after an official China newspaper reported earlier in the day that Beijing planned next year to further reduce its annual export quota for rare earths.

The signals of a tougher Chinese trade stance come after American trade officials announced on Friday that they would investigate whether China was violating World Trade Organization rules by subsidizing its clean energy exports and limiting clean energy imports. The inquiry includes whether China’s steady reductions in rare earth export quotas since 2005, along with steep export taxes on rare earths, are illegal attempts to force multinational companies to produce more of their high-technology goods in China.

Despite a widely confirmed suspension of rare earth shipments from China to Japan, now nearly a month old, Beijing has continued to deny that any embargo exists.

Industry executives and analysts have interpreted that official denial as a way to wield an undeclared trade weapon without creating a policy trail that could make it easier for other countries to bring a case against China at the World Trade Organization.

So far, China seems to be taking a similar approach in expanding the embargo to the West.

Wang Baodong, a spokesman for the Chinese Embassy in Washington, said on Tuesday that the Chinese government was putting new restrictions on the mining, processing and export of rare earths to protect the environment. But he said that China was not violating any W.T.O. rules in doing so and that it was not imposing an embargo or trying to use rare earths as a bargaining chip.

“With stricter export mechanism gradually in place, outbound shipments to other countries might understandably begin to feel the effect,” Mr. Wang said in an e-mail. “But I don’t see any link between China’s reasonable rare earth export control policy and the irrational U.S. decision of protectionist nature to investigate China’s clean energy industries.”

...The Chinese government office that oversees rare earth policy...has emerged as a bastion of economic nationalism.

...China reduced in July its export quota for rare earths for the second half of the year by 72 percent. Exporters had only six weeks’ of quotas left when China imposed its unannounced embargo on shipments to Japan.

China is preparing further reductions of up to 30 percent in its 2011 quotas compared with quotas issued in 2010..."

Keith Bradsher
New York Times