In fact, Rare Element Resources' total holdings consist of a few small plots of land, the most promising of which had been abandoned by at least three previous miners (including Molycorp). Unlike the Bre-X scam, the company's Wyoming land does indeed have rare earths, but they are in small concentrations and are mostly the less-desirable sub-group of the elements. The company's chief financial executive and spokesman, Mark Brown, and secretary, Winnie Wong, are regulars on Canada's penny stock scene -- they've run at least 18 different businesses with names like Deal Capital, Cordova Industries, Apoquindo Minerals, Pivotal Corporation, Globemin Resources, and Everclear Capital.

The company's 402-square-feet headquarters in downtown Vancouver is also listed as headquarters of at least seven other ventures. The firm has no revenue, no production, and even if their rosiest press-release hopes and dreams come true, their first actual sale of rare earths won't happen until 2015, long after the other 20 rare-earth companies further along in the production process have locked up all the major buyers.

A charismatic man with an encyclopedic familiarity with the mining business, Brown told me that rare earths were the new oil -- a business whose market is more than 1,200 times the size of rare earths' -- but he also conceded that his new line of work was "a very, very high-risk business."

"Only one in a thousand companies will actually find an economic mineral deposit," he said, "and you don't know which one is actually going to find something." Plenty of people seem willing to bet that his firm will prevail over the long odds: Rare Element Resources is currently worth nearly $500 million.

Cooler heads have weighed in on rare earths, but since the frenzy began they've largely been ignored. Six months before the China-Japan incident, the U.S. Geological Survey issued a report showing that the world has a 1,000-year global supply of proven rare-earth reserves, 63 of them outside China. The U.S. Defense Department released its own assessment in November saying that the national security implications of China's rare-earth lockdown -- a key factor in the initial burst of panic -- had been overblown. Demand for rare earths, meanwhile, is almost totally inelastic, and the market is already adjusting to concerns over a Chinese monopoly. The big buyers in Japan started importing from India and Vietnam three years ago, and Molycorp alone may be delivering more than six times what the United States needs by 2012.

So, who are the winners in this saga? Not me -- as the rare-earth market went from ignored to overvalued in a blink of an eye, I went from smug satisfaction at being ahead of the curve to kicking myself for selling out way too early. I lost half my stash betting that people would have come to their senses by now, and left the day-trading game in pursuit of more rewarding ventures, like frantically scanning fantasy football waiver wires. The other small-time investors holding on for the roller-coaster ride likely won't fare much better -- they'll be cleaned out by betting on the "one in a thousand" companies once the quarterly sales figures start coming in. That leaves only the mining executives: If they're smart, they'll get out before the whole game goes south -- and prove the old adage right all over again.

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