Saturday, December 12, 2009

Rare earth metals shortage

William Tahil, research director at Meridian International Research, says that there is insufficient lithium available in the earth's crust to sustain electric vehicle manufacture in the volumes required, based solely on Lithium ion batteries. To power a world automobile fleet in the size required to achieve needed cuts in oil consumption, would merely be switching dependency on one diminishing resource to another.
Although in my opinion the main driver of the commodity bull market is loose monetary policy (via low real rates and currency weakness), the supply situation is also a supportive factor for higher commodity prices in the long run.

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