OKLAHOMA CITY, Okla., (The Oklahoma Post) Oct 31, 2025
Wall Street’s ringing the alarm bells and not all of them are wrong. While the big-money suits were busy telling you “hold tight,” you might’ve been better off grabbing your coat. Today’s focus: suspect bubble territory in the so-called “rare-earth” stocks.
And if you’re wondering whether anyone can spot a bubble, remember what Michael Burry’s boss told him in The Big Short: “Anyone can see there’s a real estate bubble.” His response? “Actually, no one can see a bubble. That’s what makes it a bubble.” Same principle applies when rare-earth stocks surge 400% on geopolitical speculation.
For years, investors have been pouring into companies selling themselves as the U.S.’s ticket to freedom from China’s grip on rare-earth minerals, those oddball metals used in everything from EV motors to defense tech. The pitch: China dominates mining and refining; we’re going to break free.
That story isn’t wrong. China still holds roughly 70% of rare-earth mining and about 90% of processing capacity. But here’s the wrinkle: recent reports show that the U.S. is signing deals with allies such as Australia and Japan to shore up supply chains. On Oct. 20, 2025, President Trump and Australian Prime Minister Albanese signed an $8.5 billion critical minerals framework, committing $1 billion each over six months. Just eight days later, on Oct. 28, Trump signed a similar deal with Japan’s Prime Minister Takaichi.
Why the inflated hype?
When a company or sector is hyped for geopolitics, you often see price doesn’t reflect fundamentals. Some of the “rare-earth” stocks got inflated on talk alone: “China will choke supply, we’ll swoop in,” etc.
Daniel Plainview had it right in There Will Be Blood: “Out of all men that beg for a chance to drill your lots, maybe one in 20 will be oilmen; the rest will be speculators.” Same ratio probably applies to rare-earth miners versus speculators riding the China-fear trade.
The timeline this October tells the story:
- Oct. 9: China announced expanded export controls on rare-earth elements, adding five more elements (holmium, erbium, thulium, europium, ytterbium) to the seven already restricted since April. Stock prices for companies like MP Materials and USA Rare Earth surged—MP jumped 21%, USA Rare Earth climbed 18%, Critical Metals soared 55%.
- Oct. 20: U.S.-Australia deal signed. Stocks experienced volatility as investors assessed implications.
- Oct. 27: Reports emerged that China might delay new controls. Rare-earth stocks fell—MP Materials dropped 5.3%, others declined similarly.
- Oct. 30: Following Trump’s meeting with Xi Jinping in South Korea, China officially agreed to pause implementing the Oct. 9 controls for one year. Stocks rallied again—Critical Metals jumped 7%, USA Rare Earth rose 6%.
Meanwhile, Australia is stepping up as a non-China source, Lynas Rare Earths operates processing facilities in Kalgoorlie (opened 2024) and Malaysia, representing about 12% of global supply outside China. But full processing capabilities remain limited, with much Australian ore still requiring offshore refining.
All this creates expectation of supply disruption, which fuels speculative buy-ups. But expectation is not the same as profits-in-the-bank.
Why you might want to pull back
If you’re holding one of those stocks because you believe the hype more than the data:
- The supply chain shift takes years. While Australia has made progress with facilities like Lynas’s Kalgoorlie plant, building full end-to-end processing capacity outside China is estimated to take 10 to 20 years. Even with the recent U.S. deals, experts project domestic processing won’t reach meaningful scale until 2027-2028 at earliest.
- The “bubble” aspect: Year-to-date through October 2025, MP Materials stock surged approximately 365% to 400%. But in mid-October, the same stock dropped 20% in a single week during profit-taking, while USA Rare Earth plummeted 44%. If everyone expects China to make supply scarce, the stock prices may already reflect that fear and when China paused its October controls (even temporarily), some of that premium evaporated overnight.
- Geopolitical risk cuts both ways: While China’s October controls are now paused for one year, the April restrictions remain in effect. China’s position still dominates processing—approximately 85% to 90% of global refining capacity. That means even non-Chinese mines need Chinese tech/refining unless they invest big time. The one-year pause is a reprieve, not a resolution.
The Stillwater paradox: When your neighbors become your bag-holders
As The Big Short showed us with Florida strippers owning five houses, when the guy flipping burgers is also day-trading the company stock, you’re not at the beginning of a bull market, you’re near the end.
USA Rare Earth’s active hiring push in Stillwater, Okla., advertising for operators, warehouse employees, maintenance techs and engineers for their magnet manufacturing facility—sends mixed signals that investors should parse carefully. On the surface, aggressive hiring suggests operational expansion and confidence in future production, which aligns with the company’s plans to build domestic rare-earth processing capacity.
However, the Facebook comments reveal a more complicated picture: one commenter notes they applied “a few weeks ago and that position is still open,” suggesting either high turnover expectations, difficulty attracting qualified workers or perhaps overly optimistic hiring targets. More concerning from an investment perspective is the community dynamic visible in the thread—local residents openly discussing their USAR stock holdings, with one mentioning “leap call options” (highly speculative short-term bets) and another wishing the company “paid dividends” (it doesn’t, because it’s still burning cash on development).
When your neighbors are both your employees AND your shareholders, you’ve created a feedback loop where local economic optimism gets baked into stock prices regardless of fundamentals. This is how speculative bubbles metastasize into small communities: the factory becomes a symbol of local revival, the stock becomes a civic duty to own, and suddenly Grandma’s retirement account is riding on whether a facility in Stillwater, Okla., can compete with decades of Chinese rare-earth infrastructure.
The retirement connection
This volatility matters beyond Wall Street. Parents and grandparents on fixed incomes form the financial backbone of many communities—funding local businesses, supporting grandchildren’s education and sustaining charitable giving. But when food sourcing problems drive grocery costs higher, these same retirees face an impossible choice: maintain their standard of living by depleting retirement savings, or cut back on essentials.
During periods of supply chain disruption, whether from geopolitical tensions affecting fertilizer imports, climate events damaging crops or export controls on agricultural commodities, food price inflation disproportionately impacts those living on fixed pensions and Social Security. Unlike working-age adults who can potentially increase earnings, retirees must absorb these shocks by drawing down 401(k)s and IRAs faster than planned, converting what should be 20- to 30-year nest eggs into stopgap measures against rising grocery bills.
Remember George Bailey’s speech in It’s a Wonderful Life when depositors panicked during the bank run? “The money’s not here. Your money’s in Joe’s house…right next to yours.” The same principle applies when retirement accounts are loaded with speculative rare-earth stocks: your nest egg isn’t safely in a vault—it’s riding on whether a startup in Oklahoma can out-compete China’s decades of infrastructure.
This creates a ripple effect: reduced retirement security means less inheritance for the next generation, less consumer spending in local economies and increased pressure on already-strained social safety nets as savings run dry years earlier than actuarial tables predicted.
When rare-earth stocks crash after speculative rallies, it’s not just day-traders taking losses, it’s retirement portfolios built on the promise of “strategic minerals” that turn out to be strategic timing mistakes.
MP Materials as a diversification play
Now, not every rare-earth stock is pure speculation. MP Materials operates the only functioning rare-earth mine in the United States at Mountain Pass, Calif., producing about 11.5% of global supply with record output of 597 metric tons of neodymium-praseodymium (NdPr) in Q2 2025—a 119% jump from the prior year. Unlike USA Rare Earth’s Stillwater facility that’s still ramping up, MP has actual customers: General Motors has committed to purchasing 1,000 metric tons of magnets from MP’s Fort Worth, Texas, facility, and Apple invested $500 million in the company in July 2025.
Most critically, the U.S. Department of Defense became MP’s largest shareholder with a $400 million preferred stock purchase, providing a price floor for NdPr oxide and downstream products. This isn’t vaporware, it’s infrastructure.
However, before you start thinking this is a safe harbor in the storm, consider the reality: MP lost $28 million on $31.3 million in revenue during Q2 2025, because scaling domestic rare-earth processing is capital-intensive and time-consuming. Until 2022, MP shipped 95% of its concentrate to China’s Shenghe Resources for processing; by Q1 2025, only 40% of revenue came from oxide sales as domestic processing capacity slowly came online.
If you’re diversifying into MP Materials, you’re buying a company with government backing, real production and blue-chip customers, but you’re also buying years of losses before profitability, vulnerability to Chinese pricing manipulation and a stock that’s already up 365% this year on those same fundamentals. It’s the least speculative play in the sector, which is like saying it’s the driest spot in the ocean. You might still get wet.
What now?
If Jackie Chan’s next blockbuster gets a simultaneous U.S.-China release with full Hollywood marketing, the rare-earth bubble could deflate faster than any trade deal, because nothing says “the crisis is over” like Rush Hour’s Inspector Lee getting red-carpet treatment in both Beijing and Los Angeles. That is how flimsy these mineral deals are.
If you’re holding targeted “rare-earth” stocks because you believe the hype of U.S. dominance tomorrow, you should ask: what’s the actual business today? The Oct. 30 pause on China’s newest export controls bought the market a year of breathing room, but it doesn’t change the fundamental timeline. Processing facilities take years to build, environmental compliance is expensive and China’s existing April restrictions remain in force.
In short: there’s a credible supply-chain issue here, but not a sure-thing claiming profit-bomb overnight. The one-year pause is a temporary truce, not a victory. That leaves room for substantial risk. If you’re leaning toward “pull now,” you’re aligning with caution rather than faith in a shiny narrative.
Because in the meantime, someone else might be selling your exit while you hold the bag.
Writing By: Robbie Robertson | Editing by Robbie Robertson
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