The recent release of 60 million barrels of oil (OIL) will artificially lower the price. High oil prices has been the best catalyst for clean energy production and fuel efficient vehicles. Increasing the supply of oil may be pushing down the demand for rare earths(REMX), uranium(URA) and lithium(LIT) only short term. This decline in oil prices should not drastically hurt the development of rare earth assets outside China.

Over the long term oil prices will return to equilibrium as the new supply is absorbed by the market. Demand for fuel efficient vehicles will continue to soar. Rare earths and lithium stocks have pulled back and are significantly discounted. However, this may change shortly.

Gold Stock Trades received a significant letter from Governor Sean Parnell of Alaska recently, in which he wrote to Energy Secretary Steven Chu that, "The federal government simply cannot afford to sit on the sidelines as other countries move aggressively to develop new mines..." Read the actual letter by clicking here. The Governor proposes an immediate initiative combining federal and state government in the speedy development of Alaska's vital rare earth resources.

Washington was beginning to wake up about the rare earth (REMX) crisis affecting our most critical industries. It is apparent that the West will not be relying on trade sanctions alone to counter China's export cuts of critical rare earths. Artificially lowering the price of oil is only a short term move and the U.S. must move fast to find alternative energy sources. Rare earth assets in the U.S. must progress rapidly or domestic high end users such as Apple and General Motors may face supply shortages.

In 2012, the President has set aside funds to create a rare earth research hub. It is being modeled after the famous "Manhattan Project" where top scientists will be brought together to develop a rare earth supply chain. This will consist of targeting the top domestic development projects and creating a separation facility to manufacture the ore into a final product. This could potentially be a tonic to many of the North American rare earth miners who are developing the assets but need the government's assistance to subsidize refining and separating capabilities.

In an article I wrote on 4-8-11 I mentioned that "Colorado Congressman Mike Coffman introduced the Rare Earth Supply-Chain Technology and Resource Transformation (RESTART) Act of 2011, which will give loans to the industry and speed up permitting."

These initiatives from Washington have been long overdue. The U.S. needs to recapture this industry co-opted long ago by China. Fortunately important forces in the U.S. are beginning to take action to regain the high ground.

The Bin Laden Mission was a prime example of unintentionally revealing to the world one of the many uses of rare earths in top secret technologies. For the first time, the public became aware of the existence of a stealth helicopter. Stealth technology depends on rare earth oxides. The rare earths absorb the oppositions laser wavelengths to avoid detection. We are witnessing only one of many hitherto unknown applications. Imagine the plethora of rare earth developments that await mankind.

One can now begin to comprehend the significance of Congressman Mike Coffman's urgency in stressing the importance of fast tracking the production of rare earths for our national security. No better example of this can be the presence in our own country of an indigenous mother-load of a rich rare earth assets.

Major U.S. domestic rare earth stocks must be closely monitored for consolidation in 2011 such as Molycorp (MCP), Rare Earth Elements (REE) and Ucore (UURAF.PK).

Disclosure. Long UURAF