Greetings From Barcelona!

Beers, Gaudi, and marginal utility? [The Rude Awakening] August 14, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Greetings From Barcelona! - The beers are flowing as the family reunites. - Gaudi’s genius hugs the city like a loving granddad. - An Irish pub “steals” business from another, thanks to me. [Insider Reveals A Breakthrough New Way To Profit From AI]( Do not… I repeat… [Do NOT buy any AI stocks until you watch this short video in full.]( [Click here to learn more]( You’re about to discover a breakthrough new way to profit from the rise of AI that has never been revealed before. the types of companies we target with this strategy have shown top-performing gains like 1,167% in 11 days, 1,779% in 13 days and even 2,900% in just 3 days. Starting with $5,000, that’d be enough to walk away with profits like $63,350, $93,950 and $150,000 – all in a matter of days. But you must hurry… (As this is time sensitive). [Click here now for details on this new AI strategy.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Dear Reader, Bon dia from a gorgeous Barcelona, Catalonia, Spain. Hang on… shouldn’t it be “Buenos dias?” Nope, that’s Spanish. Or perhaps, “Bom dia?” Nope, that’s Portuguese. “Bon dia” is good morning in Catalan, that mish-mash of Spanish and French the Catalonians speak. Sure, they speak Spanish, too… as a second language. But to fit in here, you’ve got to speak Catalan. [Spain] In the extreme northeast of Spain lies the region of Catalonia. Three of my wife’s five siblings arrived, along with her parents and her mom’s cousin. I finally got to meet my new brother-in-law, a lovely Belgian chap. More on him later. We arrived Friday night, so Pam’s brother, Roi, and I went to Flaherty’s, a great Irish pub in Barcelona’s Gothic Quarter. I was excited because I hadn’t been to this bar in eight and a half years. And it didn’t disappoint. The bartenders also said they would show the Arsenal-Nottingham Forest match on Saturday. I was over the moon! “We’ll be back!” I shouted. Then we walked around the Gothic Quarter and Ciutat Vella (Old Town) for the rest of the night, eating, drinking, and being merry. It was superb. Among other things, we devoured jamon iberico (Iberian ham), which is even better than Italian prosciutto. [Italian prosciutto] Jamon Iberico Then on Saturday, the rest of the family arrived. [URGENT: Exclusive $10 Offer From Jim Rickards]( [Click here to learn more]( Hi, Jim here. And for the first time ever, I want to give you [all of my best secrets… for under $10!]( This is your chance to get all of my moneymaking insights at one affordable price. [Click here for all of the details on my special $10 offer.]( [Click Here To Learn More]( Gaudi and His Wonky Architecture Antonio Gaudi’s fingerprints are all over this city. As I write, the rest of the family are visiting one of his myriad houses are town. They decorate the city like shimmering lampposts, guiding tourists from one spot to another. Gaudi is known for “Catalan Modernism.” But if you ask me, his buildings are designed like he swallowed a bunch of psychedelic ‘shrooms and started drawing. Apart from Park Guell and all his famous houses, his most famous building is La Sagrada Familia, a cathedral that must be seen to be believed. [ La Sagrada Familia] Yes, that’s it. That’s La Sagrada Familia in Barcelona. Credit: [Rethinking the Future]( The cathedral isn’t even done yet. It’ll be completed in 2026, according to the latest estimates. Looking from the outside, it almost feels like the building is moving. It’s a remarkable achievement, though, like the Taj Mahal, the exterior is far better than the interior design. After visiting La Sagrada Familia, we took the spotless and easy bus to the beach to eat lunch. Again, the paella and fish, along with the beer, flowed. [ paella] In case you’ve never seen paella… My sister-in-law, Meg, and I enjoyed a scallop and bacon paella. I need to improve my command of English to convey to you how delicious it was. The rest got the usual seafood and meat paellas which were delicious, I’m sure. But my father-in-law opted for the catch of the day. Always a wise choice in a harbor city. Luckily for us, the ladies wanted to go shopping and knew they couldn’t drag us along with them. So we headed to the pub. This is where my unintentional lesson in economics happens. A Real-Life Lesson in Marginal Utility I write about marginal utility because it’s so damn important. And it’s straightforward to understand. But ordinal marginal utility is something we unconsciously do every day. First, the definition: Ordinal marginal utility refers to the concept that individuals rank their preferences for different goods or services based on the additional satisfaction they derive from consuming an extra unit. While it doesn't precisely measure the level of satisfaction, ordinal marginal utility allows people to compare the relative desirability of different choices. I can’t overstate how important this is. But I’ll show you right now. Remember how happy I was that Flaherty’s was showing the Arsenal game on Saturday? Well, here’s my ranking of pubs I was going to watch that match in: - Flaherty’s - Dunne’s - Any other pub that had the game on. Flaherty’s and Dunne’s are both great pubs, but I happen to be closer to Flaherty’s and seem to go there first. But on Saturday, Roi and I headed to Flaherty’s long before kickoff time. And we were turned away at the door! The big brute bouncer said, “It’s full.” Ok, there were many people in there, but it wasn’t “English pub full” on a game day. Since my brother-in-law was there, I quietly acquiesced. But I was incandescent with rage. Where were we going to watch the game? Ok, Dunne’s is second on my list. Let’s head there. So we went. And luckily for us, it wasn’t close to packed. We watched Arsenal beat Nottingham Forest 2-0, and I was happy as a clam. We dropped about 60 euros in there on Saturday that Flaherty’s didn’t get. But that’s not the big deal. This is the big deal. My new ranking is this: - Dunne’s - Any other pub besides Flaherty’s. - Flaherty’s. That’s right. I’m not going to write a crappy review of Flaherty’s. It’s a great pub. And maybe it was really full. But I don’t care. I didn’t get what I wanted. And what they’re getting is far worse: an unhappy customer who’s not complaining about them. I’m just ignoring them until I have to use them again. And that might be years down the road. And what’s worse is that on Sunday, when the girls went shopping, we returned to Dunne’s, not Flaherty’s. Papa, Roi, and my Belgian brother-in-law, Kenneth, played pool, drank beers, and watched more football matches. We dropped another 100 euros in there yesterday. Kenneth said to me, “I really like this place. It’s the first bar in Barcelona I’m visiting when I come back.” Priceless and effortless publicity. Our bartender, Danny, who hails from Liverpool, but has emigrated to Spain, was a treat. The boys kept ordering beers, but Papa didn’t want any. So Danny brought him a paper cup with a straw and a lemon on top. He said to Papa, “I brought you a glass of nothing!” We cracked up. [Group Photo] Kenneth, Micah, Me, and Roi in Dunne’s watching Chelsea and Liverpool draw; Credit: Sean Ring Now you may think it’s just one case of lost business. But how many times does this happen? If you run a business, you absolutely have to be aware of this. The way I see it is that one pub is up nearly 200 euros on another. And in these days, that matters. Wrap Up Barcelona is one of the world’s great cities, and we’re having a great time there. Hopefully, this will whet your travel appetite. You still have time to head somewhere this summer. Barcelona is undoubtedly one great place you can head. Have a great week ahead! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( In Case You Missed It… China Plays the Metal Card [Sean Ring] SEAN RING Happy Friday! Right now, I’m on a plane from Milan to Barcelona. So my good friend and colleague Byron King kindly takes over the Rude today. I wrote about a month ago about gallium and germanium and how China put strict export controls on them. That means the United States will have more difficulty acquiring them going forward. Byron tells a beautiful tale here, starting in Singapore, moving to China, then your high school chemistry classroom, and back to the United States. Enjoy! And have a great weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( China Plays the Metal Card… Which Cards Will You Play? [Byron King] BYRON KING This past Independence Day, China made a highly strategic move. It was both subtle and brilliant, and it leveraged a profound U.S. industrial deficit, namely America’s lack of basic industrial capability to produce certain critical metals that truly make our world work. The implications are immense, and in a moment, I’ll describe what happened. Plus, I’ll give you a few ideas on how to position yourself as an investor. But first, I want to discuss acupuncture. My Chinese Medicine Man in Singapore Several years ago, pre-COVID, I traveled to Singapore. There’s no need to get into details, but my trip began in the mountains of western Canada, doing geology and kicking rocks in a variety of rugged, outdoor environments. Then I made a couple of long flights to cross the Pacific Ocean, passing through several airports, and eventually landing in the Lion City. Along the way, I picked up a bug. About a day after I arrived in Singapore, I was sick as a dog, coughing my guts out. But there I was, far from home, and I had work to do. I asked the hotel concierge about finding a doctor, and that’s how I wound up at a small clinic on the outskirts of the main business district. The place was clean and equipped with all manner of up-to-date medical devices. The staff spoke English and were very professional and courteous. I could not have asked for more. The Singaporean doctor was a splendid, genteel fellow who told me he trained in China. He was also a mineral collector, so we talked about geology. In terms of medicine, the doc poked me and prodded, all the usual things. He looked down my throat, listened to my lungs, reviewed a chest X-ray, and patted me some more, here and there. The diagnosis was (and I’m shortening it): “You have pulmonary inflammation. We’ll call it bronchitis, and I’ll give you a prescription for antibiotics.” Then the doctor asked, “Would you also like acupuncture?” The doctor explained (again, this is the short version) that traditional Chinese medicine identifies critical pathways within the body; by inserting small needles into certain spots, acupuncture redirects the body’s own healing energies. There are about 5,000 years of evidence that it works. Well, I wanted relief and was ready to try acupuncture, even for bronchitis. Soon, I was lying on a hard, flat bed with the doctor meticulously jabbing a series of needles into my shoulders, back, arms, and even legs. The needles were made of surgical steel, very thin, and the physician was quite skilled in sticking them into me, such that I barely felt the pinch. “Just be still,” said the doctor. “Allow your body’s impulses to flow normally, and the needles will redirect them to your inflamed areas.” So there I was, laid out on a bed in a comfortable room, sniffing incense in the air, with needles sticking out of me like a pincushion. And hey, what do you know? After about fifteen minutes, I could feel myself healing from the inside out. After another fifteen minutes, I felt even better. And so it went, such that the total procedure lasted about 90 minutes. Toward the end of my visit, an assistant came in, plucked out the needles, and rubbed some sort of ointment on my skin. The physician’s bill was shockingly low by American standards. I mean, talk about delivering value for the money? This guy was great. I walked out of that clinic feeling immensely better than when I went in. No coughing, none at all. I could breathe comfortably. I had much more energy. In fact, I felt pretty normal. Although yes, I also took the antibiotic series over the next ten days. I mention this acupuncture story to illustrate how just a small amount of metal, applied very carefully to certain channels of the body, can lead to immediate changes; — and I mean rapid and dramatic effects. This brings us back to what just happened with China, and two very important metals. [New “WiFi Crypto” Token is Going NUTS!]( Only a handful of crypto investors know about this… But there’s a tiny, affordable device… That’s paid investors real crypto – every day, with zero work… Just for having a working WiFi connection! It sounds crazy, but it’s true… And [this 3:28 video]( explains everything. [Click here to view it NOW](. [Click Here To Learn More]( China Plays the Metals Card Have you heard of gallium? How about germanium? It’s okay if you’re not familiar with the names. They’re elements in the periodic table (see below) but not in everyday use like iron, copper, lead, aluminum, or such. Then again, iron, copper, lead, aluminum, and more comprise massive, near-trillion-dollar global markets with many suppliers and buyers. But the Chinese government sure has heard of gallium and germanium. The two metals are small in terms of global markets; in fact, we call them minor metals. The entire world trade in the two elements is under about $300 million per year for each. But the thing to know is that the two substances are critical to many modern technologies (again, see below), and the Chinese know it. So, here’s what just happened. At the beginning of July, Chinese authorities announced strict new export controls on gallium and germanium. And this does not reflect some humdrum trade dispute over how high the tariffs ought to be; no, it’s more of a geopolitical bombshell. Now, my acupuncture story comes into play. That is, just like how the doctor inserted very thin needles into critical nerve channels in my skin and skillfully redirected energy flows to help the healing process, China has highlighted a critical weakness in the West and is using these two metals to inflict pain. For example, despite its small primary market as a refined metal, gallium is essential to manufacture advanced computer chips, like those utilized in cutting-edge radar systems, solar panels, light-emitting diodes (LEDs), and more. And with germanium, again, despite its small primary market, the metal is also used in high-tech systems like integrated circuits, other cutting-edge chips, fiber optic cable, and high-performance solar cells, which are used in space satellites, and more. The point is gallium and germanium are essential foundation metals for many high-tech applications. Absent these two elements, quite a bit of tech just doesn’t happen or, in the best case, fails to work nearly as well. For the Chinese, it’s about leverage. Yes, the two metals have small markets. But downstream, their multiple uses involve tens and even hundreds of billions of dollars in end products, including advanced military equipment. And most of those products are at the cutting edge of advanced tech. Absent gallium and germanium, it’s back to the 1970s or 60s, tech-wise. Clearly, people in high places in China understand chemistry and technology. With their new export restrictions, they know what they’re doing and are doing it very carefully, with evident deliberation. Undoubtedly, much of this kind of informed, focused thinking is going on at the highest levels of Chinese government and military thinking; you have to tip your hat to such a targeted Chinese response. Meanwhile, China's new export-control regime is likely just an opening shot toward the West. China is replying, tit-for-tat, to all manner of sanctions from the West, such as restricting sales of advanced computer chips, chip fabrication equipment, and much else. So the question arises, what gives China this kind of power over gallium and germanium? Well, begin with the industrial fact that China controls about 80% of global gallium output and about 60% of global germanium output. Right away, China is a key player, and hence Chinese restrictions are absolutely intended to constrict and disrupt global trade in the two items. Okay, but now comes the next question. Why and how does China exert such significant control over the output of these metals? Is producing gallium and germanium all that difficult? Actually, no… In fact, people have known how to separate these two metals for over 150 years. But since the 1980s or so, China has pursued national policies that emphasize and encourage their production. In this sense, it’s a political policy applied to geochemistry. Back to School for Chemistry Along these lines, let’s study some chemistry. As we described above, gallium and germanium are elements on the periodic table. Take a look on the next page, and find the Ga/Ge boxes (hint, they’re right next to each other): As you can see, gallium (Ga) is positioned underneath aluminum on the periodic table. This means that gallium has a similar electron structure to aluminum, but it’s a larger atom with more electrons because gallium has a heavier nucleus. If you understand the chemistry, it’s no surprise that most of the world’s gallium is produced as a byproduct of smelting bauxite, the main source of aluminum. Okay, hold that thought. [Periodic Table] And see how germanium (Ge) is positioned under silicon, and again this means that it has a similar, but larger electron structure due to a larger nucleus. And of interest, most of the world’s germanium is produced as a byproduct of smelting and refining zinc ores; you can see how close germanium is to zinc on the periodic table. Okay, so if you want gallium, you must have an aluminum industry that smelts bauxite ore. Once the bauxite is smelted and refined into aluminum, there’s no more residual gallium. In other words, you won’t get gallium by recycling beer cans. You must mine and smelt primary bauxite. If you want germanium, in most cases, it comes from smelting zinc ore. That is, germanium tends to associate with zinc in sulfide form, in a mineral called sphalerite. Again, once you refine the sphalerite, you have zinc. So even if you can recycle the zinc, you won’t get any germanium. This takes us back to primary mining and smelting. Where Is the Mining? The Smelting? The U.S. problem with many metals, let alone exotic metals like gallium and germanium, begins with the fact that the country hosts very little primary mining in general anymore. That is, much of the country’s old smelting and refining operations closed down long ago. It’s a lost industrial heritage. According to the Congressional Research Service, there is but one primary aluminum smelter currently operating in the U.S. And all of one primary zinc smelter is working, a relatively small facility in Tennessee. In general, smelting ore is energy intensive and comes with a long list of environmental issues. Plus, smelters require skilled labor, and the U.S. education system is not geared toward creating anything like that sort of workforce. All in all, the bottom line is that the U.S. is not a friendly jurisdiction in which to operate a smelter, let alone open new, primary smelting operations. With no significant aluminum or zinc smelting and primary metal processing, it’s no surprise that the U.S. lacks domestic sources for gallium and germanium — and many other critical metals and substances as well. Still, these make for a story for another time. Let’s Look Ahead Right now, the U.S. government has a modest germanium stockpile, but no gallium in the warehouses. No doubt, the government and affected industries will scramble to secure future supplies of gallium and germanium. The materials are out there in the world, and markets will reshape to fit the new industrial correlations. If you’re looking for a focused, if not single-play “gallium and germanium” idea, stop reading because there is none, at least not outside of China, and I don’t recommend buying Chinese shares. Still, several companies in the West are in the aluminum and zinc business, and they understand the upstream extraction and downstream processing for gallium and germanium. One large mining play with extensive primary aluminum operations, hence gallium output, is Rio Tinto Group (RIO). It’s a massive company, at about $100 billion market cap, and currently cash-rich, such that it spins out a dividend of 7%. Another large miner with extensive zinc output is Teck Resources Ltd. (TECK). Its market cap is over $20 billion, with a dividend under 1%. In fact, Teck runs a large zinc mining operation in northwest Alaska called Red Dog. The concentrated ore is exported to Japan and South Korea for processing, but Teck does keep track of the germanium. So there’s hope, right? Just because China wants to restrict exports of certain metals, it does not mean that the U.S. or West has lost the game. But it does mean that there’s a geopolitical game being played, and it’s serious. Looking ahead, this metals game requires that the U.S. government — certainly U.S. politicians — get smart about what really matters in the world because bad omens are more than apparent. Something is coming at us from over the horizon. Today, the issue is gallium and germanium. Tomorrow, next week, or next month, it could be something else. In fact, it almost certainly will be something else. And we should all be thinking about what comes next. Then again, that’s why you read Paradigm Press’ publications. That’s all for now… Thank you for reading. Best wishes… All the best, [Byron W. King] Byron W. King Contributing Editor, Rude Awakening [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. 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