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Smart Money Taking Stake in Rare-Earth Metals

by Cris Sheridan. September 21, 2009
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Given our present day circumstances most people wouldn’t even conceive of placing smart money and the US government in the same sentence, however, when it comes to the ultra high-tech forward-looking branch of the Department of Defense Advanced Research Project Agency, or DARPA for short, most investors should take special note. Why? Well, other than developing the predecessor to our modern day internet (the ARPANET), DARPA is the synthesis of collective genius, well-secured government funding, and secretive military/scientific technology understood by, a reasonable measure, 0.00001% of the current population. Here’s their mission statement via their website (http://www.darpa.mil/mission.html):

“DARPA’s mission is to maintain the technological superiority of the U.S. military and prevent technological surprise from harming our national security by sponsoring revolutionary, high-payoff research bridging the gap between fundamental discoveries and their military use.
Over the years, DARPA has responded to issues of national importance with new ideas and technology that have changed the way wars are fought and even changed the way we live. “

I guess the internet might be a good example.

Now, in case you haven’t been paying attention, China currently produces over 95% of rare-earth metals (REMs for short) and has also reported that they are going to either reduce or cut-off all shipments for domestic consumption. After having a nice run-up of a few hundred percent, when this news broke to the wider market some REM companies doubled again in price. Needles to say, many of these small mining companies are currently due for a pullback.

However, what caught my attention is when I found out that the Dept of Defense was awarding contracts to certain REM companies to work with DARPA for the development of high strength aluminum-based alloys, which are specifically formed by combining REMs with aluminum and nickel to create both exceptionally strong and light materials that have far-reaching military and civilian applications.

If we define “Smart Money” as those who see trends develop long before the average investor, then I believe DARPA clearly qualifies as such. I mean they did invent the internet after all…along with Al Gore, of course.

Copyright © 2009 Cris Sheridan
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Cris Sheridan | California, USA | Email

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