TL;DR
Boom Bust Bulletin edition 61 (“How an 18th century lieutenant’s discovery in a quarry sparked one of the biggest geo-political storms of our age”) maps the rare-earth-minerals scramble onto the Kondratieff wave’s late-stage “wars of expansion.” Darren Wilson argues yttrium is the West’s “killer choke-point” — without it there is no semiconductor industry — and China’s export-licensing regime (66% of mined, 88% of refined global rare-earth supply) is drip-feeding the West into panic, stockpiling, and soaring prices, while REM-driven data-centre land bidding feeds classic late-stage real-estate-cycle inflation. Conclusion: land peaks first, then stocks, then select commodities — copper, gold, lithium, crude and REMs “arguably will be the last bull market left when the real estate cycle peak turns to bust.” [Source: PSE, BBB_61]
Key Points
- K-wave and 18.6-year cycle peaking together: the two cycles’ interaction is the frame; late K-wave historically brings Kondratieff’s “wars of expansion” — kinetic conflict over scarce resources toward the peak.
- Yttrium as the choke-point: essential for plasma-resistant coatings in chip fabrication (withstands >2,400°C); vast majority produced in China. “Without it, you have no semi-conductor industry full stop.”
- Three decades of Chinese strategy: subsidised extraction/processing of copper, lithium, rare earths, tungsten; the West offshored the dirty processing and now depends on it — “a seismic strategic mistake by the West. One that China was too eager to allow them to make.”
- Export-licensing leverage: China’s scheme decides who gets which minerals, harvests supply-chain intelligence from applications, requires proof of civilian use, and drip-feeds Japan et al. just enough — pushing companies toward Chinese component suppliers (which are exempt).
- FT data: since 2022 yttrium demand soared while exports to the US, Japan, South Korea fell under restrictions; US defence/auto/semiconductor firms warn of shutdowns “by Christmas.” Same story for tungsten, antimony, gallium, germanium. F-35s are being delivered with workout weights in the nose instead of gallium-nitride radars.
- Western counter-moves: ~$40bn US minerals funding announced since 2022 (much conditional), Pentagon equity stakes, above-market US price floors to defeat Chinese market-flooding, African mine lobbying (Zambia friction); six non-Chinese companies (incl. Alcoa, Metlen) plan >300 t/yr gallium — just under half of global demand. EU emergency task force ahead of the October 2026 China trade-truce expiry.
- Real-estate-cycle overlay: year 14 of rising US land prices; data-centre-suitable industrial land up ~ten-fold in a few years on hyperscaler bidding — “Classic late-stage real estate cycle behaviour,” now amplified by REM costs.
- Investor caution: “the cure for high prices is higher prices” — panic overinvestment in REM mines plus a potential Chinese supply flood threatens a future price crash; new developers need guaranteed floor-price customers. Don’t extrapolate REM prices indefinitely upward.
- Watch list of charts: copper, gold, lithium, crude oil, and REMs — the candidates for the final bull market of the cycle.
Notable Quotes
“Of all the rare earth minerals on earth that are the key to our technology dominated world… only one is considered a ‘killer choke-point’ for the west. And that’s yttrium.”
“We’re in the middle of a sea change in terms of how the global economy works.” — Daniel Yergin, S&P Global (quoted)
“Land peaking first, then stock markets, then select commodities. And as a BBB member, you’ll be ready for it.”
Watchlist Changes
None formal — Darren directs subscribers to watch copper, gold, lithium, crude oil, and rare-earth-exposed miners “very closely” as candidate last-bull-market vehicles, while explicitly warning against buy-and-hold on the REM-price narrative.
Emma’s Analysis
BBB #61 supplies the commodity leg of the same peak sequence Phil laid out the same day in Sub #34 (2026-07-31-sub-email-34-latest-tracking-re-cycle) and Gann #25’s K-wave/rearmament framing three days later (2026-08-04-gann-25-using-time) — a tight editorial convergence: the Kondratieff Wave peak expresses as resource nationalism, rearmament, and select-commodity inflation just as the 18.6-Year Real Estate Cycle tops. The data-centre land observation is the most novel link: REM scarcity → hyperscaler land bidding → late-cycle industrial land inflation — rare earths feeding the land cycle directly, a concrete instance of nations and firms fighting over Economic Rent. The Moonshot-driven chipmaker selloff (Gann #25) and China’s yttrium leverage are two faces of the same trade: the market repricing Western AI capex against a Chinese choke-point. Note also the through-line from BBB Postcard #40’s resource-wars theme and Phil’s arms-manufacturers aside — PSE is consistently steering toward defence and hard-asset exposure for 2026–2030. [Source: PSE, BBB_61]
Cross-references: 2026-07-31-sub-email-34-latest-tracking-re-cycle, 2026-08-04-gann-25-using-time, 2026-07-29-bbb-postcard-40-trump-economic-hit-men