Strategic Rare Metals - Critical for the Future of US Defense

Published November 30, 2013 | By glen

Rare Strategic Metals

As more and more dollars get printed, it gets harder to foresee a future that doesn’t include significant inflation. If you’re worried about inflation, you can protect yourself by purchasing tangible assets with fixed values. Gold, oil and gas interests, and real estate are all examples of assets that typically hedge against inflation. However, if you aren’t including strategic rare metals in your investment portfolio, you’re missing out on a major opportunity.

Strategic Rare Metals

These compounds are naturally occurring elements — just like gold or aluminum. Like gold, they are relatively rare. Unlike gold, which is primarily used for investment or for leisure spending, strategic rare metals are extremely important in the manufacture of many of the goods that you use. You might not have heard of iridium, for instance, but it’s used in light-emitting diodes and in flat-screen displays. It is also 10 times rarer than gold, based on its natural occurrence in the Earth’s crust.

Much of gold’s value comes from popular opinion, rather than from its intrinsic usefulness. It is relatively unimportant for industrial purposes and equally attractive jewelry can be made from different compounds. While it has been held to be a valuable compound for thousands of years, there is relatively little justification underpinning that belief. Strategic metals, on the other hand, are valuable because they’re necessary. Fuel cells, computer chips, optical lenses, pharmaceuticals and military devices can’t be made without them. This gives them real, intrinsic value, and can make them a particularly useful tool to protect your wealth against future erosion in the dollar.

Metals and Defense

The defense industry uses strategic rare metals heavily:

Gallium. Communications devices use gallium.
Iridium. Iridium is used in many optical applications including night vision, laser tracking and target recognition systems.
Rhenium. The ability of rhenium to withstand extreme temperatures makes it crucial for fabricating parts in military jet engines.
Tantalum. Weapons systems designers that need small, but high-capacity, capacitors turn to tantalum alloys.
Tungsten. Once used heavily for incandescent light bulbs, tungsten’s hardness makes it an important part of penetrating armaments and other projectiles.

Without these strategic rare metals, the nature of military hardware would have to change overnight. During both good times and extremely bad times, the military has the ability to spend either because tax revenues justify it or because the government wants to protect itself. With this in mind, the rare metals that the military needs to function can be an excellent hedging investment.

Owning Strategic Rare Metals

Owning strategic metal isn’t like buying copper or aluminum. Many of them have prices that are roughly comparable to that of gold, so the quantities that you typically need to buy are reasonable. Like gold, you can buy physical metals rather than depending on a paper-based investment where you don’t truly have ownership that you can count on. Rare strategic metals can even be held in a self-directed IRA and can even be stored overseas, giving you a foothold in another country in the event of severe instability in the United States.

Whether or not you realize it, strategic rare metals power most of the devices in your life as well as driving the country’s military. You’ve benefited from them for years. Now, you can also benefit from their stability and value by including them in your investment portfolio.