Red Alert: How China’s Growing Prosperity Threatens the American Way of Life

The book, Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, by Stephen Leeb and Gregory Dorsey, ought to be a wake-up call to every American who has an interest in the future of our nation. Mr. Leeb spoke about his book and this topic on MSNBC yesterday and his data shocked the round-table at which he sat. As was I.

Here’s one statement that prickled the hair on the back of my neck. China possesses 97% of the world’s mine-able rare earth metals and it alone has the processing capability to extract these sought-after metals. For those who slept through high school chemistry, rare earths are used in aerospace components, nuclear batteries, ceramic capacitors, lasers, X-ray machines, PET Scan detectors, and in many high-tech weapons systems.

The chart above ought to be a wake-up call to all of us. The United States has fizzled out in its quest to locate and process rare earths. Get this: the global supply of rare earth elements could be wiped out by 2012. Yes, 2012, next year. In an op ed in Natural News, editor Mike Adams writes:

The problem with the supply of rare earth elements is that demand has skyrocketed over the last decade from 40,000 tons to 120,000 tons. Meanwhile, China has been cutting its exports. Now, it only exports about 30,000 tons a year — only one-fourth of the demand the world needs. In order to build more “green” technologies, the world will need 200,000 tons of rare earth elements by 2014, predicts The Independent. Yet China now threatens to drop exports to exactly zero tons by 2012.


What is most ironic about this whole scenario is that the U.S. is finally realizing the benefits of green technologies- wind turbines, solar panels, hybrid car batteries and fiber optics- yet each of these depends on rare earth metals, the ones that the U.S. does not have nor are we seeking them. What happens next year if China shuts us off? Will that end our push for green technology and force us back to the Dark Ages of fossil fuel usage?
Interestingly, China is prepared to take the #1 position in the world in alternative energy by 2012- as it becomes the world’s top manufacturer of solar panels. China has been dumping thousands of solar-desalinization panels into Saudi Arabia in the past year or so and has become one of that nation’s leading trade partner. The Saudis realize that their long dependence on petrochemical production is limited and have therefore opened up two giant solar electric plants. The kingdom has already persuaded investors to put more than $3 billion into plants to make components for solar panels in the western petrochemicals hub of Yanbu and its east coast counterpart, Jubail. Further, the government has plans to create up to 15,000 jobs in the next decade by nurturing a solar industry, from solar farms to assembly plants, to factories that make raw materials.
Saudi Arabia?  Yes, Saudi Arabia. With help from China, not the United States.
Caroline Geck, Library Journal, says of Red Alert:
Economist Leeb (Game Over: How You Can Prosper in a Shattered Economy) argues that while U.S. officials and politicians engage in short-term myopic planning, endless legal maneuvering, scandals, and wartime investing that are crippling American economic viability, China’s government is run by visionary scholars with backgrounds in such fields as chemistry and engineering who are carefully analyzing the long-term, big picture. China is gaining ground as a superpower and attaining competitive advantage over other countries, especially the United States, by using its profits to invest in and control mineral commodities such as coal, oil, zinc, silver, and gold. These resources are becoming scarce, and the author argues that access to them will determine the standard of living for future generations. According to Leeb, the Chinese government recognizes the importance of these resources to key industries such as renewable energy and electronics and views the ability to accumulate them as proof of the country’s strength. He also discusses the global demand and supply of key resources such as water.
Two days ago, the GOP had its nth presidential debate- a debate centered on the topics of 9-9-9, immigration, religion, undocumented lawn-cutters, and other pap. GOP Congressional leaders, Cantor, Boehner, and McConnell give daily anti-Obama lectures. President Obama gives campaign speeches about jobs.
Red Alert: How China’s Growing Prosperity Threatens the American Way of Life. Do any of these people get it? If not, then my grandsons may be facing a future war with China. After all, that’s one thing that this nation does well and often.

14 thoughts on “Red Alert: How China’s Growing Prosperity Threatens the American Way of Life

  1. War with China? Realistically, there is no scenario I can imagine in which that would result in an American victory. I’m not being “unpatriotic” in the least when I say this. Just realistic. Assimilation by China?…that is much more realistic…global evolution is inevitable.
    No matter how you deal the cards or try to stack the deck, we are playing a holding game now…the 21st Century will see the rules change totally. China cannot impose it’s system on the rest of the planet, but a homogenized and radically different concept of nationality is the way we are going.

  2. …but a homogenized and radically different concept of nationality is the way we are going

    But, do any of our leaders or want-to-be leaders understand any of this? Are we THAT insular so as to be myopic in our vision of the future? If so, then we are finished as a nation. Perhaps we already are.

  3. I would say that anyone who is in power or wants to be involved in politics at this time who understands any of this would prudently be keeping their opinion to themselves, because to speak the truth is social suicide.
    I am certainly not a fatalist, I am truly a futurist. I was born in 1950, but I sort of wish that I had been born in 2000 because I find the incremental rate of change we are living through so exciting…The world today is so radically different than the world I was born in. I want to see and be a part of what comes next!

    1. What? You missed the 60’s? Oh, that’s right: If you remember the 60’s, you missed them.

      Have any of you who lived through the 60’s noticed how the “revisionists” have tried to change the true historical facts? (The idiot “Common Sense” comes to mind. I used to call him Preacher Man as he was always using the Bible as his material source. Don’t get me wrong, I think it’s a great book with lots of helpful hints, but it’s still fiction. Now I call him Sgt. Price from the Stalag 17 movie. It seems to fit him so much better.)

  4. I find it pretty bizarre that the “revisionists”, which you refer to, try to change current events…In other words, as Richard Pryor once said, “Who you gonna believe? Me? Or your lyin’ eyes!”

  5. M_R, how about calling Kaptur’s office and ask then if the Congresswoman
    supports the Dylan Ratiagan amendment to the Constitution to forbid all lobbying money and any contributions to any member of Congress? I am sure
    that you can find the Amendment at

    1. No more contributions from Super PAC’s, Union PAC’s or Corporations (they’re people too, don’t ya know)? Not even the Koch brothers? If I could have sweet dreams like that, I’d sure sleep a lot better. Instead of these Mud induced “China replaces OPEC” nightmares.

      China is doing so well economically because the Chinese government doesn’t play nice with their own citizens. Let’s face it, you have to maintain a minimum ratio of “output per person” to GNP. Japan learned it, India is starting to learn and the Europeans just won’t believe it.

      The United States has stayed in the game so long because we had most of the money and our technology advancements. Now some greedy and stupid politicians have changed our own rules; welcome to the 2nd (so far) greatest recession/depression in U.S. history.

  6. You can’t make these generalizations about China…not playing “nice with their own citizens” in the context of the emergence of China from a middle age feudal state into the monster it has become in only 70 years…there was a World War, Maoism and the transition to another hybrid political system and economic model in an extremely short, historically speaking, span of time. This is change in fast forward. We observe and try to catch our breath and analyze before all of our finely crafted and carefully interpreted culturally arrogant assumptions are proved wrong again.
    China went through all of the stages of rebellion, adolescence, self destruction and is beginning to mature while we are trying to figure out our own operating system.
    Yes, in it’s emergence as an industrial power, China created an ecological nightmare beyond our ability to imagine, but that’s the strength of China, now they are at the forefront of Green Power and working hard to be the world leader in Green Energy.
    Perhaps for us, the real problem is a xenophobic inability to understand the psyche of the Chinese. We are so rigid, they have a culture that has survived by knowing how to bend in the wind.

    1. A little (Toledo, Ohio) economics lesson:

      Suppose the United States government took over the U.A.W. Now suppose the benefits are cut to the bone. And the hourly wage is $2.00 per hour. That’s not too bad considering your standard of living is way low and you live with several other family members (parents, siblings, etc.).

      Now imagine a real country where the factories are actually controlled by the government. This country would have a massive excess of G.N.P. because its’ citizens use so little of the G.N.P. (by law or otherwise). Because you can produce automobiles so cheap, you can still ship them across the Pacific at a profit. You can even send them into the Automobile Heartland of America (known today as the Rust Belt).

      Now along comes an American consumer, Tony, who needs a new car and shops down on The Central Avenue Strip. Tony sees two identical cars except the much cheaper one is from China. Tony opts for the cheaper one because he’s saving to build a new house (not on the East Side).

      Now American Consumer Tony’s next door neighbor Sue, who works at Hydra-Matic (they make G.M. transmissions), gets laid off because American auto sales are down. Sue cuts back on spending, including eating out at the Tony Packo’s. Tony’s sales are so low he has to declare bankruptcy and the brothers from Burger King buy his restaurant. They agree to keep Tony on, but at a greatly reduced salary.

      Now Tony can’t afford to build that new house in Holland (home of Joe The Plumber). Now Joe The Plumber blames President Obama, and has to resort to making money by going to Tea Parties. This goes around and around because the American Government (both Republican and Democrat) has become so inept regarding global economics.

      Remember, politicians get elected, not economists, teachers, chemists, bloggers, etc. And remember, politicians are the ones who get to make the decisions (not blog commenters).

  7. This is news?

    Between the right doing everything possible to cripple the US economy, big business trashing the industrial sector, greedy developers destroying farmland, etcetera, what’s left of the US?

    The only problem is that the US citizenry will be too broke to buy anything.

    Maybe they’ll sell us heroin.

  8. NON, you have depicted a fairly caricatured view of what is going down with western economies…but I’d say your over simplification is missing a few very important points which separate the simplified reality from the real future.
    Let’s look at the I Phone and the deification of Steve Jobs…I will not dispute the genius of Jobs, but to present him as a champion of a new American economic model is totally false…and the trending of China as the economic threat it is portrayed as is not really accurate.
    Most of the worlds real heavy lifting and technological wizardry that makes the iPhone possible comes from Germany and Japan. The company, Foxxcon is based in Taiwan, but they are the ones who control the factories in mainland China which assemble the iPhones. This alone shows the interdependency of China and the rest of the world.
    So, the wholesale price of an iPhone is $179 US…$61 dollars go to Japanese workers who make the key iPhone components, $30 goes to German workers, $23 goes to South Korean workers and only $6 goes to the Chinese workers who simply assemble it. There are a few more dollars which are distributed to other countries who make some other components.
    I think it is interesting to look at the fact that Germany and Japan are not low wage countries. They are both countries that have wages as high if not higher than the American work force. They both ahve strong organized labor unions and strict pro labor laws that would be inconceivable to Americans. Mass layoffs are virtually impossible in either of these countries and the extremely strong yen makes japan a particularly expensive country to do business in. But despite these “obstacles’ both Germany and Japan lead the world in High tech manufacturing.
    What’s troubling about all this is that it completely upends the “conventional wisdom” about the global economy that has been sold to the American people over the past few decades. The conventional wisdom dictates that America’s loss of millions of manufacturing jobs was an “inevitable” part of economic globalization. And in any case, we’re told, U.S. manufacturers supposedly can’t compete these days, unless they move their jobs overseas, where they can pay lower wages.
    I am putting together more info now to explain these facts, but, the bottom line here is that it is intelligent business models and socialized planning which is the basis for this phenomena.
    Any comments?

  9. Further comments: While the American economy is hog tied by the obstructionists republican congress, Americans are brainwashed into thinking that the Euro Zone is a doomed enterprise. They are brainwashed into believing that anti unionism is the answer.
    Europe is a recent economic experiment. They are suffering from the toxic crisis fomented by the deregulated American financial market, but instead of being crippled by isolationist greed, Europe is proving that they can work as an entity to find solutions. The Euro will survive.
    The examples I provided in my last comment prove that an interdependent economic model exists now…it is the schematic basis for the future.
    An interesting aside:
    Q: Do you know which is the most rapidly expanding economy in Europe at the present time?

    Curiously, Belgium has not had a functional government for over a year now.

  10. more info…did you know that a tightly knit cluster of 147 interlocking corporate entities control over 40% of the Worlds wealth? There is a core or 1318 companies. Each of the 1318 has ties to 2 or more other companies and on the average they are connected to 20.What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the
    world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.

    When we further untangled the web of ownership, you will find much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

    China is entangled in this global web on interconnection and is as vulnerable as the rest of the world is to this creepy reality, it puts a lot of power into a small number of hands, but it also suggests that the
    governance of much of the world’s wealth is closely correlated, so one disaster could sweep like wildfire across them all.

Comments are closed.