America’s Biggest Bank and the World’s Most Powerful Country Are Buying What You’re Selling.

The market is selling what they're buying, and the deadline that could flip the trade is imminent.

by EquediaSunday, Oct 18, 202621 min read

An illuminated critical minerals repository sits behind massive steel doors cut into a mountain beneath a storm sky.

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Seven Days in November

A new hire at America’s biggest bank, a deadline buried in a trade deal’s fine print, and a forgotten government program from 1951. Together, they point to the same seven days in November.

Something strange happened on Wall Street this week.

And nobody noticed.

This past Tuesday, the most powerful bank in America handed a single executive a very specific mission: find places to put the bank’s money in one particular corner of the market.

By Wednesday morning, one of the most closely watched stocks in that exact corner was heading for a fresh 52-week low.

The bank was JPMorgan. And when they quietly make a move this big, you know they’re preparing for something.

The new chief is Andrew Frame, and he’s been tasked with steering investment under the bank’s $1.5 trillion Security and Resiliency Initiative, a program that also sets aside $10 billion for direct equity and venture stakes.

But for what?

Critical Minerals

The stock that fell was USA Rare Earth, on track that morning for its sixth straight loss and sitting roughly 70% below the $42 record it set exactly one year earlier.

But it was hardly alone.

MP Materials, in which the Pentagon became the largest shareholder in 2025, has slid from about $52 five weeks ago to around $40 this week. Last year, it hit $100.

Let that sink in for a moment.

The biggest bank in America is building a team to finance an industry the market is treating as if it’s going out of business.

Either the market knows something JPMorgan doesn’t, or JPMorgan knows something the market has forgotten.

So who do you think is right?

Well, the answer to that wasn’t in the headlines. It was sitting in the details of last month’s trade deal, in a Pentagon audit, and in a dusty 1950s government minerals yearbook that tells the story of how America once solved this exact problem, and why that solution died.

It all comes down to two dates, exactly one week apart.

One of them is already on every investor’s calendar. The other is hiding in the fine print, and almost nobody is talking about it.

Mark Your Calendar

The first date is November 3, when Americans vote in the midterm elections that will decide who controls Congress for the final two years of this presidency.

The second is November 10.

That’s the day China’s suspension of its most aggressive rare earth export controls is scheduled to run out. These are the rules Beijing unveiled in October 2025 that claimed licensing authority over goods made anywhere in the world if they contain Chinese-origin rare earths worth more than 0.1% of a component’s value. https://equedia.com/a-trillion-dollar-trade-hiding-in-plain-sight

Now, you may have read that the US-China truce was extended at last month’s summit in Washington. It was, partly. After Xi Jinping’s state visit in late September, Treasury announced that the broader tariff truce would run to January 10, 2027, although even that extension hasn’t yet been formally documented in the Federal Register.

Some outlets have assumed the rare earth reprieve was rolled into that extension, but the fine print says otherwise.

Thomson Reuters’ trade compliance team, which tracks the regulatory record rather than the press releases, notes that China’s extraterritorial rare earth rules sit outside the new tariff deal entirely.

Via Thomson Reuters:

“...the September summit didn’t extend it.”

Beijing could still extend the suspension at the last minute, and I’ll explain shortly why even that outcome wouldn’t break the case I’m about to make. But the date is on the calendar, and it isn’t alone.

Seventeen days later, on November 27, China’s suspension of its outright ban on exporting gallium, germanium and antimony to the United States also expires.

Then, on January 1st, 2027, a Pentagon procurement rule takes effect that bars rare earth magnets, tungsten and tantalum mined, refined or produced in China, Russia, Iran or North Korea from US defense contracts, no matter what any truce says (Crowell & Moring).

Now lay those deadlines next to the price chart, and you’ll see exactly what the market has gotten backwards.

The critical minerals selloff of the past few months was not caused by the shortage going away. It was caused by fog: summit headlines, a Federal Reserve that started raising rates again, and a market that sells first and asks questions later whenever a stock has no revenue.

That fog begins to lift in November, and then into January.

Once the votes are counted and Beijing shows its hand, investors will be forced to price what is actually happening in the supply chain rather than what they hope is happening.

For investors with patience and a shopping list, the weeks before and after the midterms could offer one of the best entry points this sector has seen since the boom began.

On November 3, Americans decide who controls Congress. One week later, Beijing reminds the world who controls the supply chain.

But before we get to November, it’s worth looking at why the stocks fell in the first place, because the reasons tell you a lot about where they could go next.

What the Sellers Were Really Selling

The selling began in earnest in September, and it had a very specific trigger.

On September 10, as reports surfaced that President Trump and Xi Jinping would meet in Washington to extend last year’s truce, rare earth stocks tumbled. The VanEck rare earth ETF fell 5% that day while the S&P 500 dipped about half a percent, and none of the major names had released any news.

The logic behind a move like that is simple: Domestic developers price on scarcity created by Chinese control of the supply chain.

When Washington and Beijing look friendly, the scarcity premium leaks out of the stocks.

That was the first leg down. The second came six days later.

On September 16, the Federal Reserve under Kevin Warsh raised rates for the first time since 2023, to a range of 3.75% to 4.00%, and 16 of 18 policymakers penciled in at least one more hike before year-end.

Higher rates act like a tax on companies that need capital, and nobody needs capital more than a company building a mine, a refinery or a magnet plant. You can see it in the trading: in early October, the selling landed hardest on companies still building capacity, while producers with ongoing revenue held up better.

USA Rare Earth, which broke ground in September on a roughly $1.2 billion magnet plant in South Carolina that isn’t scheduled to begin commissioning until 2028, was punished in part because its government reimbursements are tied to milestones it hasn’t yet reached.

Then came the final shove.

Earlier this week, as the Nasdaq suffered its worst day since July, yet there was no specific catalyst behind USA Rare Earth’s latest drop beyond broad market pressure on a high-beta sector.

Now notice what’s missing from that list: not one of those reasons added a single kilogram of dysprosium to America’s supply.

In fact, the physical market moved the other way. Chinese rare earth magnet shipments to the United States fell to 512 tonnes in August, down 20% from July (Rare Earth Exchanges).

Yttrium oxide, which goes into jet engine coatings, radar and chipmaking, has risen roughly 140-fold outside China since Beijing’s licensing regime began. It reached about $1,100 per kilogram by May, and two North American firms that use it in engine coatings were forced to temporarily halt production (Tech Times).

And the April 2025 controls on seven medium and heavy rare earths, including dysprosium, terbium and yttrium, were never suspended at all.

In other words, the market sold the thaw, but the thaw never reached the supply chain.

And if you look closely at what actually came out of the September summit, you’ll see why it may never reach it.

A Timeout, Not a Reset

On September 24, Trump hosted Xi at the White House. The concrete result was a two-month extension of the tariff truce and a “30-for-30” relief framework covering a modest list of goods such as toys, household textiles, small appliances and farm products (Thomson Reuters).

But look at what both sides deliberately left out of it: semiconductors, electric vehicles, batteries and rare earths were all carved out entirely.

Neither government was willing to put its strategic materials on the table.

In other words, the power of these strategic materials cannot be overlooked.

The International Energy Agency estimates that full implementation of China’s expanded controls could put around $6.5 trillion a year of downstream production outside China at risk, across autos, high tech, defense and energy (IEA via Tech Times).

Two weeks after the summit, Beijing made its intentions even clearer.

On October 9, exactly one year after it unveiled its sweeping rare earth rules, the Communist Party’s Central Committee and China’s State Council issued joint guidelines that analysts say formally codify the doctrine behind them: control the processing of critical minerals, use that control to dominate manufacturing, and turn manufacturing dominance into the next generation of technology (Tech Times).

On the very same day, the European Union’s trade chief left Beijing with little more than a promise that China would keep fast-tracking rare earth license applications through a system it operates at its own discretion. Europe got managed access to China’s supply, not a way out of depending on it.

And lest anyone think the weapon has been holstered, Beijing halted rare earth exports to several Japanese firms in January, even while its truce with Washington was in force.

If any of this sounds familiar, it should.

In June, in A Trillion-Dollar Trade Hiding in Plain Sight, we warned that last year’s truce had disarmed nothing.

“China didn’t dismantle the weapon; it simply put the safety back on…for one year.”

That year is nearly up.

Now, the bears do have a historical argument, and it deserves to be taken seriously.

We have seen this movie before.

In September 2010, after a maritime clash in the East China Sea, China halted rare earth exports to Japan, prices exploded, and Western rare earth stocks went parabolic (US House hearing, 2011).

Then, in 2014, the World Trade Organization ruled against China’s export quotas. Beijing complied, prices fell, and the Western processing industry that was supposed to be built never got built. Molycorp, which owned the very same Mountain Pass mine that MP Materials operates today, filed for bankruptcy in 2015.

That’s the sequel the sellers are betting on: a thaw, a price collapse, and another graveyard of Western developers.

But they’re missing one critical difference.

In 2011, nobody was standing behind those companies. Today, somebody is, and it happens to have the deepest pockets on earth.

To understand why that changes the outcome, you have to go back to 1951.

The Buyer of Last Resort

In 1951, with the Korean War raging and America’s stockpiles dangerously thin, Washington used the Defense Production Act to do something that sounds radical today. It promised to buy all the domestic tungsten concentrate offered to it for five years, at a guaranteed $63 per short-ton unit (US Senate Finance Committee).

By 1954, that price was two to four times the world market price. Domestic tungsten production hit an all-time record that year, the fifth straight annual increase (Minerals Yearbook, 1954).

In Boulder County, Colorado, output went from about 1,900 pounds in 1949 to an estimated 383,000 pounds in 1953 (US Bureau of Mines).

Then the buying stopped.

With the government purchase program essentially complete by 1958, domestic output was cut back so sharply that in the second half of that year only two producers were still operating (Minerals Yearbook, 1958).

The lesson is one every resource investor should know. Geology didn’t decide whether America had tungsten; the buyer did. When Washington paid, the supply appeared, and when Washington walked away, it vanished.

Now look at who is standing behind today’s critical minerals companies.

In July 2025, the Pentagon took a stake that made it MP Materials’ largest shareholder, guaranteed a floor price of $110 per kilogram for its neodymium-praseodymium, and agreed to buy the entire output of a new magnet plant for ten years (MP Materials). Washington has since backed a roughly $10 billion Export-Import Bank initiative called Project Vault to build a strategic critical minerals reserve (US Mission to ASEAN).

And in January, a presidential proclamation declared that imports of processed critical minerals threaten national security, noting that the US is 100% import-reliant for 12 minerals deemed critical (White House proclamation).

Then the war changed the math.

The US-Israeli campaign against Iran, which began in late February, burned through American munitions at a staggering pace. By the time full-scale fighting stopped in April, the Pentagon had fired at least half of its THAAD interceptors, nearly half of its Patriot interceptors and around 30% of its Tomahawk cruise missiles, according to CSIS figures cited by CNN.

Last month, the Pentagon’s own inspector general concluded that the campaign caused strategic shortfalls and exposed bottlenecks in the defense industrial base’s ability to resupply. The report also spelled out what the department is now doing about it.

Via Anadolu Agency, quoting the inspector general’s report, the Pentagon is working to:

“stockpile critical materials, components and selected munitions to respond rapidly to a contingency.”

Every interceptor and cruise missile fired over Iran has to be rebuilt. As Foreign Policy pointed out days after the first strikes, replenishing those stockpiles depends on vulnerable critical mineral supply chains (Foreign Policy).

The White House has asked Congress for an $87.6 billion emergency supplemental that includes $21 billion specifically for munitions (Anadolu Agency), on top of a $1.5 trillion defense budget request for fiscal 2027 (Fortune).

Now here’s the dot most people aren’t connecting.

Even under the truce, China’s ban on exporting dual-use items to US military end users has stayed fully in force (Mining Technology). And from January 1, the Pentagon’s own rules bar Chinese-origin magnets and tungsten from its supply chain anyway. A thaw can change what China sells to Detroit, but it cannot change what the Pentagon is legally allowed to buy.

That’s also why a last-minute extension of China’s suspension wouldn’t break the thesis.

Every extension is another reminder that the West’s supply exists at Beijing’s discretion, which is precisely the risk the Pentagon, Congress and now Wall Street are paying to eliminate.

Which brings us to JPMorgan.

In June 2025, in How to Play the Critical Minerals Boom, we highlighted a remark from Jamie Dimon that much of the financial press treated as an offhand comment.

“We shouldn’t be stockpiling Bitcoin—we should be stockpiling guns, bullets… and rare earths.”

In that same letter, we told you that bankers and institutions were aggressively hunting for US mineral assets, particularly antimony-gold projects like Perpetua Resources. Four months later, JPMorgan launched its $1.5 trillion initiative, and one of its first headline moves was a US$75 million cornerstone investment in Perpetua.

And this week, it put a dedicated executive in charge of the entire critical minerals effort.

So, there are now two $1.5 trillion numbers in play: one from the largest bank in America and one from the largest military in the world, and both are aimed at the same vulnerability.

And here’s the irony. The builders are being sold because investors fear they can’t fund themselves in a rising-rate world. At the same time, the biggest financier in America has just built a team whose entire job is to fund them.

Now, the 1951 story cuts both ways.

That program didn’t end because America suddenly found cheap tungsten of its own. It ended because Washington stopped buying, and the mines closed with it.

Which means the only question that really matters on November 3 is whether the next Congress keeps paying.

What the Vote Can and Can’t Change

If the forecasters are right, that answer will be written by a divided Washington.

Via Council on Foreign Relations:

“Control of the House of Representatives is the Democrats’ to lose.”

The Senate is closer to a coin flip, with the New York Times model giving Democrats only a slight edge (Action Network).

So does a Democratic House pull the plug on critical minerals?

Let’s look at who is actually writing the bills.

The most ambitious proposal in Congress, the SECURE Minerals Act, would create a $2.5 billion Strategic Resilience Reserve with a board modeled on the Federal Reserve. It would be empowered to buy critical minerals at above-market prices so that domestic producers can survive Chinese price manipulation. Its Senate sponsors are Democrat Jeanne Shaheen and Republican Todd Young (Axios).

In other words, a Democrat and a Republican have co-written a bill that would make Washington a permanent, above-market buyer of last resort. That’s the 1951 tungsten program, reborn with a Fed-style board.

Senator Young explained the motivation in a single line.

Via Tech Times, quoting Sen. Todd Young:

“China’s global dominance of critical minerals supply chains gives it significant leverage”

Meanwhile, the House has already passed the Critical Mineral Dominance Act 224 to 195 with some Democratic support. And the loudest Democratic critic of the Republican package, Energy and Commerce ranking member Frank Pallone, attacked it for doing too little to actually secure supply, not too much.

That means the two parties are fighting about how to beat Beijing on minerals, not whether to.

When standalone bills stall, mineral security provisions also tend to ride on the National Defense Authorization Act, the must-pass defense bill. With munitions still to be rebuilt after Iran, it’s hard to imagine either party campaigning on starving the defense supply chain.

Then there’s what history says about markets once the vote is behind us.

Since 1938, the S&P 500 has posted gains in the 12 months after a midterm election about 95% of the time, with an average return of around 14% (Fidelity). U.S. Bank’s research found the index averaged just 2.9% in the year leading into midterms, compared with 12.4% in the year after (U.S. Bank).

And according to a Motley Fool analysis of Robert Shiller’s data, when a midterm left a Republican president facing a divided government, the market was higher a year later 93% of the time (Stacker).

Fidelity’s explanation is the important part: sluggish midterm-year returns have generally reflected policy uncertainty before the vote, not a preference for either party.

Now apply that to a sector whose entire valuation depends on Washington’s next move. If the broad market tends to exhale after a midterm, critical minerals stocks have even more uncertainty to shed.

There’s one more reason to be patient.

The weeks after the vote overlap with tax-loss season, when investors dump their losers before December 31 to harvest capital losses. This year, critical minerals names are among the biggest losers in a lot of portfolios, especially on the TSX Venture. That kind of selling has nothing to do with fundamentals, but it has everything to do with price.

We’ve watched this setup play out once already.

A year ago, right after the Busan truce, the market dumped the entire critical minerals group on headlines that Washington and Beijing had struck a deal. Yet by the second week of January, Critical Metals, one of the sector’s most volatile names, had more than doubled for the new year.

So the setup is clear.

Policy support looks set to survive the election, the market has historically rallied once the vote is behind it, and a wave of seasonal selling is about to land right on top of the November deadlines.

So where does that leave investors?

In our view, it leaves them exactly where the smart money tends to be at this point in every resource cycle.

The Third Stage

Every major resource cycle we’ve watched over the past 20 years has followed the same pattern.

First, the policy shifts. Then a handful of early investors position. Then the big institutions arrive, and the re-rating happens fast, because the pool of buyers suddenly includes money measured in billions rather than millions.

And in this case, potentially trillions.

Critical minerals have reached the third stage.

The Pentagon is a shareholder, Congress is drafting a Fed-style buyer of last resort, and the largest bank in America just appointed a chief to deploy capital into the sector. Yet the stocks are priced as if we’re back at the first stage, still waiting to find out whether any of this is real.

We’ve been early on this story more than once.

In May 2025, in The Biggest Players Are In—Are You?, we told you BHP, BlackRock and even the Saudis were moving into strategic metals. A week later, we flagged Dimon’s call to stockpile rare earths, months before JPMorgan put $1.5 trillion behind the idea.

And this June, we warned that China had only put the safety back on for one year, and that a January 2027 Pentagon deadline was a trillion-dollar time bomb for defense contractors. Both of those clocks now run out in the weeks right after the midterms.

None of that required a crystal ball. It required reading the fine print while everyone else was reading the headlines.

So, how might investors approach the window ahead? Here’s how we’re thinking about it.

Follow the law, not the label. Focus on the metals where government rules create the demand. The Pentagon’s January rule covers rare earth magnets, tungsten and tantalum, while Beijing’s US-specific ban covers gallium, germanium and antimony. Yttrium and the heavy rare earths remain under China’s April 2025 licensing regime. Not everything called a critical mineral is scarce, though. Nickel forecasts, for example, just flipped from shortage to surplus.

Favor quality over hope. With the Fed still raising rates, a company that must raise money at the bottom is a very different bet from one that already has revenue, government backing or a strong balance sheet. The gap between builders and producers this fall was the market telling you exactly that. Geography matters too, because the deposits worth the most are in places where a JPMorgan banker or a Pentagon program officer can actually get a deal done – such as, well, the United States!

Use the calendar. Don’t try to call the exact bottom. Build your watchlist and do your homework now, before the vote. The window that matters runs from November 3 through the November 10 and November 27 deadlines, the January 1 Pentagon rule and the January 10 truce date, right through the heart of tax-loss season. We are already looking at a few very specific deals in this sector to present, so make sure to stay tuned!

Respect the risks. Beijing may extend its suspension again, which could hit these stocks on the headline even though it changes nothing for the Pentagon. The Fed may hike again. Many developers will still need to raise money, and JPMorgan’s $1.5 trillion is a financing ambition, not committed capital.

In the 1950s, Washington kept paying up to four times the world price for domestic tungsten rather than risk fighting a war without it. Seventy-five years later, it’s making the same decision again, this time with a far bigger checkbook, a Pentagon rule with a hard deadline, and the largest bank in America in the room.

The market is selling the story that the crisis is over. Washington and Wall Street are quietly buying the shortage.

On November 3, Americans will decide who controls Congress. On November 10, Beijing will remind everyone who controls the supply chain.

I know which side of that trade I’d rather be on.

Seek the truth and be prepared,

Carlisle Kane

The Equedia Letter

Disclaimer: This newsletter is provided by Equedia Network Corporation for informational purposes only. It is not an offer to buy or sell any security, and nothing in it is investment advice tailored to any person. Equedia.com and Equedia Network Corporation are not registered as investment advisers or broker-dealers with any securities regulator. This letter contains forward-looking statements and opinions that are subject to risks and uncertainties, and actual results may differ materially. Equedia, its directors and affiliates may hold positions in companies in the critical minerals sector, including companies that are or have been advertisers on equedia.com. Past performance is not indicative of future results. Always do your own due diligence. See our full terms at equedia.com/terms-of-use.