Tom Ashbook who is host of On Point always does an excellent job in news reporting and analysis. The following radio program aired yesterday addresses an extremely important subject for American economic growth, especially in the area of advanced manufacturing.
I have been tracking this story for a long time. The recent apparent slowdown of shipments of rare earth elements from China to Japan was alarming to me and might be an indication of future policies to use trace elements as part of diplomacy and manipulative economic power. This goes against the principles of free trade and is not in the best interest of America.
The NPR radio program highlights some of the dangers the US economy faces by losing base infrastructure, especially in the specialty mining business.
This radio program reminds me of a book published during the 1970s by Meadows and Meadows titled "Limits to Growth." The book used system dynamics, initially developed by Prof. Jay Forrester of MIT, to predict the shortage of minerals along with the rapid depletion of oil. Many of the predictions of the book were incorrect because the models did not properly take into account market forces of supply and demand and the innovation that comes about when prices increase.
Even so, Tom Ashbrook's program yesterday raises deep concerns that American business has overlooked the risks of international supply chains in a quest to maximize profit. I think many corporations will re-evaluate the reasons for sourcing critical materials from overseas sources, especially in support of advanced manufacturing.
Even in agriculture, a large amount of fertilizer comes from overseas. If these sources were cut-off, crop yields would decline by double digits.
A recent news article claims that Afghanistan contains $1 trillion in untapped mineral reserves. This is the article:
Risen, James, 2010. U.S. identifies vast mineral riches in afghanistan. The New York Times, Jun. 13.
I do not know the details of the report mentioned by the NYT, however, I am sure that in the future there will be a great discussion on mining and sourcing minerals in the US and worldwide.
Overall, this is an extremely important issue for the growth of advanced manufacturing in America.
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