China's Rare Earth Dominance: A Looming US Economic Crisis?

Summary

China holds the cards in the global economy, with potential to shut down the US economy within six to nine months by cutting off rare earth supplies, according to economist Stephen Hanky. He criticizes US economic policies under both Trump and Biden, including protectionism, tariffs, sanctions, and increased military spending, arguing they harm trade and create enemies. In contrast, China is opening doors to trade and has made it illegal for its companies to comply with US sanctions. Hanky believes the US trade deficit is a result of Americans spending more than they produce, not foreign manipulation, and the dollar's dominance remains strong. He highlights China's strategic advantage in critical minerals and its rapid advancement in AI. Hanky predicts inflation will continue to rise due to accelerating money supply growth, driven by commercial banks and recent shifts in Federal Reserve policy towards quantitative easing. He advises staying away from bonds, as interest rates are expected to climb, and sees a secular bull market for gold, potentially peaking between $6,000 and $7,000 an ounce.