China cuts off rare earth minerals first with Japan and now U.S.

I was listening to Wolf Blitzer on CNN and heard that China has retaliated to something the U.S. did it didn't like by cutting off all Rare Earth Minerals used in things like Lasers, guided missiles, computers, and other electrical  microtechnological purposes. So I looked up Rare Earth Minerals on Wikipedia to find that there are 17 rare earth minerals and 95% of the world's present sources are in China at present. Because China for sometime has undercut prices from all other international sources most of those sources shut down because they couldn't match China's prices. However, now with this embargo by China of all Rare Earth Minerals to both Japan and the U.S. many Rare Earth mines will again start up internationally to fill the vacuum at much higher prices for Japan and the U.S.

http://en.wikipedia.org/wiki/Rare_earth_element#Technological_applications

Begin quotes from above wikipedia source

Spurred by increased demand and concern over China's effective control of the rare earth market, searches for alternative sources in Australia, Brazil, Canada, South Africa and the United States are ongoing.^[20] Mines in these countries were closed when China undercut world prices in the 1990s, and it will take a few years to restart production. One example is the Mountain Pass mine in California, which is projected to reopen in 2011.^[9][21] Other significant sites under development outside of China include the Nolans Project in Central Australia, the remote Hoidas Lake project in northern Canada,^[22] and the Mount Weld project in Australia.^[9][21][23] The Hoidas Lake project has the potential to supply about 10% of the $1 billion of REE consumption that occurs in North America every year.<sup>[24]

next quote from wikipedia Rare Earth minerals page</sup>

Global production 1950-2000

Until 1948, most of the world's rare earths were sourced from placer sand deposits in India and Brazil.^[8] Through the 1950s, South Africa took the status as the world's rare earth source, after large rare earth bearing veins were discovered in Monazite.^[8] Through the 1960s until the 1980s, the Mountain Pass rare earth mine in California was the leading producer. Today, the Indian and South African deposits still produce some rare earth concentrates, but they are dwarfed by the scale of Chinese production. China now produces over 97% of the world's rare earth supply, mostly in Inner Mongolia.^[7][9] All of the world's heavy rare earths (such as dysprosium) come from Chinese rare earth sources such as the polymetallic Bayan Obo deposit.^[9][10]
New demand has recently strained supply, and there is growing concern that the world may soon face a shortage of the rare earths.^[11] In several years, worldwide demand for rare earth elements is expected to exceed supply by 40,000 tonnes annually unless major new sources are developed.^[12] Additionally, concerns have mounted about the reliability of China as a primary supplier of rare earths. On Sept. 1, 2009, China announced plans to reduce its export quota to 35,000 tons per year in 2010-2015 to conserve scarce resources and protect the environment.^[13] Chinese export quotas have also resulted in a dramatic shift in the world's rare earth knowledge base. For example, the division of General Motors which deals with miniaturized magnet research shut down its US office and moved all of its staff to China in 2006.^[14] In May 2010, China announced a major, five-month crackdown on illegal mining in order to protect the environment and its resources. This campaign is expected to be concentrated in the South, where most mines are smaller.^[15] Illegal rare earth mines are common in rural China and are often known to release toxic wastes into the general water supply.^[9][16] Moreover, in response to the continued detainment of a Chinese fishing boat captain by the Japanese Coast Guard, China instituted an export ban on rare earth shipments to Japan on 22 September 2010, according to the New York Times.^[17] Although the Wall Street Journal reports that China has denied the export ban,^[18] Japan's former foreign minister Katsuya Okada raised a protest against the effect of China's sudden action on worldwide production.<sup>[19]

Next News Article on subject:</sup>

China Day Ahead: Lending, Deposit Rates Raised; Rare Earth Export Embargo

quote from above news article starting with "China Day Ahead" above.

China unexpectedly raised its benchmark lending and deposit rates for the first time since 2007 ahead of data that may show inflation accelerated to the fastest pace in almost two years. Stocks and commodities fell.
The one-year lending rate will increase to 5.56 percent from 5.31 percent, effective today, the People’s Bank of China said on its website. The deposit rate will increase to 2.5 percent from 2.25 percent.
Crude oil, stocks in Europe and U.S. index futures dropped on concern the engine of the global recovery will slow as China’s policy makers seek to curb lending and prevent a property bubble. Higher interest rates may encourage inflows of speculative capital from abroad, complicating management of the world’s fastest-growing major economy.
“The interest rate hike is beyond my expectation,” said Wang Tao, UBS AG’s Beijing-based economist. “It shows the government is increasingly worried about inflation. This is the beginning of a series of interest-rate hikes next year.”
Rare Earth Embargo
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of some of those same materials to the United States and Europe, the New York Times reported, citing three industry officials.
“The embargo is expanding” beyond Japan, one of the three rare earth industry officials said, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities, the newspaper reported. end quote.

It appears now there are two elephants in the room that change the world by any changes they make: The U.S. and  China. The real problem with this of course is "What happens when they both do something radical at the same time?" This could cause a ripple of chaos and shock through the world economic systems and cause serious systemic problems with long term consequences for the whole world.