{"id":99912,"date":"2016-12-22T08:37:26","date_gmt":"2016-12-22T13:37:26","guid":{"rendered":"http:\/\/countingpips.com\/?p=99912"},"modified":"2016-12-22T08:37:26","modified_gmt":"2016-12-22T13:37:26","slug":"china-russia-global-terrorism-trump-has-his-hands-full","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/12\/china-russia-global-terrorism-trump-has-his-hands-full\/","title":{"rendered":"#China, #Russia, Global Terrorism, #Trump Has His Hands Full"},"content":{"rendered":"
December 22, 2016<\/div>
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By\u00a0Peter Epstein, CFA, MBA \u00a0 EpsteinReseach.com \u00a0\u00a0epstein.peter4@gmail.com<\/a><\/strong><\/p>\n

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About a month ago, I posted an\u00a0article on\u00a0Ucore Rare Metals<\/a>\u00a0[TSX-V: UCU] \/ [OTC: UURAF], in which I highlighted the Company\u2019s emergence as a majority holder of a valuable technology to produce heavy rare earth elements\u00a0&\u00a0critical high-tech, green-energy metals\u00a0(\u201ccritical metals\u201d)\u00a0used by the US Department of Defense (\u201cDOD\u201d) and Department of Energy (\u201cDOE\u201d).\u00a0 I pointed out something that\u2019s well known by a number of US governmental agencies, but not by enough citizens, namely that China dominates the production & refining of many critical metals. This should be alarming, ongoing inaction by the US is unacceptable.<\/p>\n

In this article, I double down on the theme of\u00a0deteriorating relations with both China & Russia, and President Donald\u00a0Trump.\u00a0 I have no bones to pick with Mr. Trump, I\u2019m merely examining some of his policy initiatives.\u00a0\u00a0Spoiler alert, all roads lead to surging demand for critical metals.\u00a0 Why?\u00a0 First and foremost, there\u2019s the very significant decline in US\/China relations.\u00a0 Trump has proposed a 45% tariff on ALL Chinese imports, including critical metals the US and non-Chinese countries are so dependent on.\u00a0 China could use critical metals exports as a chess move in a potential trade war.<\/p>\n

Mr. Trump has upped the ante regarding protectionism and rebuilding America\u2019s middle class.\u00a0 This involves retrieving high-paying manufacturing jobs from Mexico & China.<\/p>\n

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Trump is steadfastly in favor of a revamped, stronger military complex that can operate in multiple hot spots at once.\u00a0 Without question, this entails a meaningful uptick in spending.\u00a0 When considering an increased military budget, it\u2019s important to realize that virtually all investments into the DOD, Homeland Security \/ National Defense, etc. will be for high-tech gear and munitions (including communications & transport<\/em>).\u00a0 The amount of critical metals used by the DOD in the past decade could be negligible compared to that used in the next decade.<\/p>\n

Importantly, since last previous article, Trump has questioned the, \u201cOne China\u201d policy whereby the US recognizes China, BUT NOT Taiwan.\u00a0 I won\u2019t go into the details or take sides, suffice it to say that\u00a0China is pissed off<\/em>.\u00a0 And, China is not sitting idly by, it recently seized a US underwater drone (and later returned it<\/em>) in a provocation that demonstrates that country\u2019s resolve in facing the US.\u00a0 China is also behaving in an aggressive manner by building\u00a0strategic military installations in an area of the South Sea that\u2019s contested by several countries.<\/p>\n

Regarding Russia, for months leading up to the Presidential election Hillary Clinton seemed to have it out for Russia.\u00a0 When she lost, many thought the rhetoric would dissipate.\u00a0 It hasn\u2019t.\u00a0 Notably, Russia is in a tough spot, it\u2019s one of the largest oil and natural gas producers on the planet.\u00a0 The collapse in oil price is killing them.\u00a0 Putin might not mind a little bit of war to pick up the economy.<\/p>\n

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Notice that\u00a0Russia & China<\/a>\u00a0are forging closer military ties,<\/p>\n

\u201cA major feature of China\u2019s and Russia\u2019s defense and geo-strategic interests has been rising levels of official support for each other\u2019s security, increasingly pitched as common defense concerns.\u00a0 China and Russia have been accelerating their joint military drills including holding their\u00a0first joint naval drills conducted in the South China Sea this year.\u201d<\/em><\/p>\n

In the end, what\u2019s (potentially<\/em>) bad for the US is good for military contractors.\u00a0 As goes the DOD budget, so goes the budgets of many countries around the world.\u00a0 However, make no mistake, the US is far from the only country looking for security of critical metals supply.\u00a0 After selling to Russia, how many other countries would China supply before sending material to the US?!?\u00a0 There\u2019s lots of talk about US\/Russia relations being the worst since the Cold War in the 1960\u2019s, but US\/China relations are no better, not this bad since the 1970\u2019s.<\/p>\n

There are a handful of mission critical REE, green energy & high-tech metals that could become difficult to reliably secure under certain adverse circumstances.\u00a0\u00a0It\u2019s no secret that in addition to an insatiable need for various REE, the DOD is front and center in the analysis and adoption of EVs for multiple end uses.\u00a0 This, combined with commercial and industrial uses of critical metals; electronics, could lead to a perfect storm of demand outstripping supply.\u00a0 Surely, multiple powerful industry trade groups are all over the security of supply issue, and multiple DOD agencies and think tanks are on the case\u2026. Alas, that\u2019s not true.<\/p>\n

This situation has been a US embarrassment for a decade or more.\u00a0 Yet, the risk of a serious confrontation has grown significantly in just the past 6 months.\u00a0 That\u2019s where Ucore comes in.\u00a0 Indirectly, Ucore will become a secure, US supplier of high demand metals to the defense industry, EV battery makers and global green-energy companies.<\/p>\n

Sourcing and processing\/separating critical metals outside of China\u2019s clutches is a tall order.\u00a0 But Ucore has answers, for example it can process oil sands (and other<\/em>) tailings, & coal ash,\u00a0pulling out valuable metals, while remediating toxic environmental wastelands at the same time.\u00a0 For industrial\/mining enterprises, this is a win-win proposition.<\/p>\n

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Polluting companies stand to share in the economics, of which Ucore would capture a large part of the cash flows.\u00a0 Urban mining is another avenue being pursued.\u00a0 Urban mining refers to recycling and reclaiming critical metals from spent catalytic converters and consumer electronics.\u00a0 This equates to\u00a0new production without mining, with critical metals production starting next year.<\/p>\n

Ucore Rare Metals’ [TSX-V: UCU] \/ [OTC: UURAF]\u00a0game-changing technology for separating individual critical metals\u00a0is faster, less energy intensive, generates fewer emissions and waste, does not use solvents or toxic chemicals, has a smaller surface and environmental footprint, requires less cap-ex and will enjoy lower op-ex<\/u>.\u00a0 The Company has a viable path, underpinned by potential profits that appear to be strong.\u00a0 Margins will have room to grow because the DOD, and nation-states the world over, interested in equipment soaking up critical metals are not particularly price sensitive.\u00a0 Ucore has never been in a better position, 2017 is primed to be a breakout year for the Company and its stakeholders.<\/p>\n

Disclosures<\/u>: The content of this article is for informational purposes only. Readers fully understand and agree that\u00a0nothing\u00a0contained herein,\u00a0written\u00a0by Peter Epstein, about\u00a0<\/em>Ucore Rare Metals,\u00a0<\/em>including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered, in any way whatsoever, implicit or explicit investment advice. Further,\u00a0nothing\u00a0contained herein is a recommendation\u00a0or solicitation to buy, hold or sell any security.\u00a0<\/em>Peter Epstein and Epstein\u00a0Research\u00a0[ER]\u00a0have never been, and are not currently, a registered or licensed financial advisor or broker\/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they\u00a0do not\u00a0perform market making activities. Peter Epstein and\u00a0[ER]\u00a0are not\u00a0directly\u00a0employed by any company, group, organization, party or person. Shares of\u00a0<\/i>Ucore Rare Metals\u00a0<\/em>are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks\u00a0can result in a 100% loss of invested funds.<\/em><\/p>\n

At the time this article was posted, Peter Epstein owned shares in\u00a0<\/em>Ucore Rare Metals\u00a0<\/em>and the Company was a sponsor of\u00a0<\/em>Epstein Research<\/a>.\u00a0Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he\u2019s diligent in screening out companies that, for any reasons, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful.\u00a0Mr. Epstein &\u00a0[ER]\u00a0are not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article.<\/em><\/p>\n<\/div>\n

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By\u00a0Peter Epstein, CFA, MBA \u00a0 EpsteinReseach.com \u00a0\u00a0epstein.peter4@gmail.com About a month ago, I posted an\u00a0article on\u00a0Ucore Rare Metals\u00a0[TSX-V: UCU] \/ [OTC: UURAF], in which I highlighted the Company\u2019s emergence as a majority holder of a valuable technology to produce heavy rare earth elements\u00a0&\u00a0critical high-tech, green-energy metals\u00a0(\u201ccritical metals\u201d)\u00a0used by the US Department of Defense (\u201cDOD\u201d) and Department […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-99912","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99912","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=99912"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99912\/revisions"}],"predecessor-version":[{"id":99913,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99912\/revisions\/99913"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=99912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=99912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=99912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}