Over the past two days, I’ve told you about two crises converging on the American economy. A potential military strike on Iran that could push oil past $100. And a tariff war that just entered a new phase of chaos after the Supreme Court blew up the legal foundation of Trump’s trade policy.
Today, I need to tell you about the third crisis. And I’ll be honest with you – this is the one that scares me the most.
Because unlike the first two, this one can’t be solved with a phone call, a diplomatic meeting, or a court ruling. This one is structural. It’s been building for 30 years. And America’s ability to defend itself depends on fixing it.
I’m talking about rare earth elements. And China’s absolute, undisputed, near-total control over the supply of them.
Let me ask you a question.
Do you know what neodymium is? What about praseodymium? Dysprosium? Terbium?
If you don’t, that’s fine. Most people don’t. But I guarantee you’re surrounded by them right now. They’re in your phone. Your computer. Your car. If you drive a hybrid or electric vehicle, you’ve got about two pounds of rare earth magnets in the motor. If you’ve ever had an MRI, the machine that scanned your body runs on rare earth magnets.
But here’s where it stops being an academic curiosity and starts being a national security crisis.
Every F-35 fighter jet requires 920 pounds of rare earth materials. Every Virginia-class submarine uses about 9,200 pounds. Every Tomahawk cruise missile – the kind we’d use to strike Iran – needs rare earth components.
In other words, the same metals that power your iPhone also power America’s ability to project military force anywhere on the planet.
And China controls virtually the entire supply chain.
The numbers are staggering.
China produces about 70% of the world’s rare earth ore. But that’s not even the real problem. The real problem is processing. China processes approximately 90% of all rare earth elements into the usable materials that manufacturers need.
Mining rare earths is hard. Processing them is harder. And China has spent three decades building the infrastructure, expertise, and capacity to dominate every link in that chain – from the mine to the magnet.
The United States? We have exactly one significant rare earth producer: MP Materials, which operates a mine in Mountain Pass, California. Until very recently, MP Materials was shipping its concentrate to China for processing – because we literally didn’t have the domestic capability to do it ourselves.
That’s starting to change. In July 2025, MP Materials signed a landmark deal with the Department of Defense that guarantees them a floor price of $110 per kilogram for their output of neodymium and praseodymium (known in the industry as NdPr). In exchange, the DoD gets 30% of any price upside.
It’s an innovative arrangement. And it’s still wildly insufficient.
Because China isn’t just sitting still.
In late 2024, Beijing imposed export controls on gallium, germanium, and antimony – critical minerals used in semiconductors, defense, and energy technology. They followed up by expanding restrictions on rare earth processing technology, making it virtually impossible for Western companies to replicate China’s refining capabilities without building everything from scratch.
And here’s the detail that should set your hair on fire: Reuters reported just this week that key rare earth prices for NdPr have rallied 41% so far in 2026.
Forty-one percent. In less than two months.
Why? Because the market is finally waking up to what the Pentagon has known for years: America is dangerously dependent on a strategic competitor for the materials it needs to build weapons, generate energy, and power its technology.
And it gets worse.
A bipartisan U.S. Select Committee on China published a report in November that detailed how Beijing manipulates critical minerals pricing through legal and regulatory mechanisms. According to the report, China’s 1998 Pricing Law “effectively makes it illegal to publish prices that deviate from the PRC government’s wishes.”
In other words, not only does China control the supply of these metals – it controls the price information about them too.
When the U.S. Department of Defense agreed to guarantee MP Materials a floor price, the reference point they used was a Chinese price index compiled by a Chinese price reporting agency operating under Chinese law.
We are literally pricing our national defense inputs using numbers provided by the country we’re trying to defend against.
Reuters noted this week that both the CME Group and Intercontinental Exchange are studying the potential for rare earth futures contracts based on Western pricing – but those don’t exist yet. We’re still flying blind.
Now tie this back to the first two crises.
Iran threatens the oil supply. Tariffs are scrambling trade flows and raising costs on everything. And underneath it all, China holds a chokehold on the critical minerals that power our military, our technology, and our energy transition.
This isn’t three separate stories. It’s one story – a story about America’s dangerous dependence on fragile, concentrated supply chains that hostile or competitive nations can disrupt at will.
The oil flows through a two-mile-wide strait controlled by Iran. The trade flows through a tariff regime that just got blown up by the Supreme Court. And the critical minerals flow through Chinese processing facilities that Beijing can restrict with a single government directive.
Every one of these chokepoints is under stress. Right now. Simultaneously.
And here’s what the financial media won’t tell you: there are companies positioned to benefit enormously from the scramble to fix these vulnerabilities. The rare earth crisis, in particular, is creating a once-in-a-generation investment opportunity for companies involved in domestic mining, alternative processing technologies, and the defense supply chain.
One analyst who’s been tracking the rare earth crisis closer than anyone is Ian King at Banyan Hill. His research has identified specific companies – including one working on a breakthrough that could break China’s processing monopoly – that are positioned at the center of this supply chain revolution. His “Mystery Metal” research names the companies and the technology behind them – I’ve read it, and it’s worth your time.
Tomorrow, in the final installment of this series, I’m going to tie all four crises together.
You read that right – four. There’s one more I haven’t told you about yet. It’s hiding in plain sight. It involves the biggest companies in the world spending hundreds of billions of dollars to build something the American power grid can’t support.
And when you see how it connects to Iran, tariffs, and rare earths – the full picture comes into focus. And it changes how you should be thinking about your money.
Tomorrow: Part 4 – “The Convergence: Four Crises, One Conclusion – and What It Means for Your Money”
Tom Anderson is the editor of Wall Street Watchdogs. This is Part 3 of an emergency four-part series on the crises converging on the American economy.
P.S. Here’s a number to remember: 41%. That’s how much rare earth prices have rallied in the first seven weeks of 2026. The market is telling you something. The question is whether you’re listening. Ian King’s rare earth research identifies the specific companies positioned to benefit from the 41% price surge – and why he believes the rally is just getting started.
