The importance of strategic metals to the U.S. economy came into sharp focus last November when China cut off Japan’s rare earth metals supply over a territorial dispute and Japan immediately backed down. Since then, Americans have learned that the majority of rare earth deposits are in China, accounting for 97% of world production.

China’s action against Japan also exposed a more threatening strategy in the works‐‐ to create a two-tiered price structure with China’s manufacturers receiving rare earths at significantly lower costs than the rest of the world. Prices outside China are now 20 times what they were 2 years ago and 40% higher than inside China.

Is America confronting a situation similar to the 1970s OPEC oil embargo? No, the current situation is actually far worse. Deng Xiaoping famously noted 30 years ago that “the Mideast has oil, China has rare earths”. What he didn’t say was unlike the Mideast, China also has the means to manufacture and distribute globally every product that requires rare earths, which today includes automobiles, computers, cell phones, fluorescent lights, much of our military equipment and nearly every green technology‐electric cars, wind turbines, fuel cells, solar panels, etc. This is precisely what makes the current situation so dangerous to the long term prospects for the U.S. economy and American jobs. A two‐tiered price structure could make it impossible for American manufacturers to compete with China in the 21st Century.

A constant refrain from economists and politicians is that American innovation is our way out of the current financial dilemma. Breakthrough U.S. discoveries in the past have created whole industries such as automobiles, commercial flight and computers, generating millions of jobs and national prosperity. But what if we are unable to participate in the next great American discovery simply because we can’t get the necessary raw materials at competitive prices? The millions of jobs would blossom where the materials are available. Today, that is China.

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As Congress was in the middle of the debt ceiling debate this summer, deciding which bloated federal programs to cut, Michelle Obama decided to take a nice taxpayer-funded “working” vacation to South Africa and Botswana with her children.  Judicial Watch began asking some very simple questions:   What was the purpose of the trip and how much did it cost?  We’re just now starting to get some answers.

Last week we obtained mission expense records and passenger manifests from the United States Air Force related to the June 21-27, 2011, trip.  Judicial Watch obtained the documents pursuant to an August 19, 2011, Freedom of Information Act (FOIA) lawsuit.  It is amazing how transparent the Obama administration becomes once you sue them in a federal court!

On June 28, 2011, we filed a FOIA request seeking the mission taskings, transportation records, and passenger manifests for Michelle Obama’s Africa trip.  Our FOIA lawsuit extracted some interesting information:

• According to U.S. Department of Defense’s published hourly rates for the C-32A aircraft used for the trip, we calculated the total cost to American taxpayers was $424,142 for the flight and crew.  (The C-32 is a specially configured military version of the Boeing 757.)  Other expenses ─ meals (off the plane), transportation, security, various services, etc. ─ have yet to be reported.

• The expense records also indicate $928.44 were spent for “bulk food” purchases on flight.  Overall, during the trip, 192 meals were served for the 21 passengers on board.

• The passenger manifests confirm the presence of Obama’s daughter’s, Malia and Sasha on the trip.  The two girls are listed as “Senior Staff.”   The manifests also list Mrs. Obama’s mother, Marian Robinson, and niece and nephew, Leslie and Avery Robinson, as well Mrs. Obama’s makeup and hairstylist (Carl Ray and Johnny Wright).

The professed purpose of Michelle Obama’s trip to South Africa and Botswana was to encourage young people living in the two growing democracies to become involved in national affairs; and during her scheduled stops in Pretoria and Cape Town, South Africa, and in Gaborone, the capital of Botswana, the First Lady used the opportunity to speak on education, health, and wellness issues.

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech discuss the world’s challenges providing food for booming populations in China, India and elsewhere.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Ben: The New Geopolitics of Food
Welcome to the 21st-century food wars
South Korea to Set Up Grain-Trading Company in Chicago in 2011
What is causing food prices to soar and what can be done about it?
Coffee and Markets: The Real Costs of Inflation

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Roger Bate of the American Enterprise Institute to discuss problems facing the Global Fund. Then Pejman Yousefzadeh talks about the continuing unrest in Egypt.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Sweden, Germany Suspend Grants to Global Fund
Global Fund Corruption, Continued
Corruption at the Global Fund
New Test Finds More Fake Medicines
With Friends Like This, Egypt Doesn’t Need Enemies
The Pharaoh Comes Closer to Falling
Pej: And Now, Yemen and Jordan
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