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I saw on Discovery channel that the source of Earth's magnetic field is the molten iron and metals in the earth's core. The spinning of these liquid metals produces the same effect as electric current in a coil which produces a magnetic field. The scientist in the program proved the concept by conducting an experiment where a big metal sphere where winded by a metallic tube in which molten Sodium was pumped so it circulate around the sphere in a similar way that happens inside earth. The experiment showed that a magnetic field was successfully produced.

My question is :

How could a circulating neutrally charged particles produce a magnetic field?

It is like having two electric currents one due to the negative charges (electrons) and the other is due to positive charges (nucleus) with same value and in opposite direction so there should not be a magnetic field. so how does this happen?

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Circulating neutral particles will not by themselves create a magnetic field. However, if the neutral particles are moving through an existing magnetic field, and the neutral medium is conducting, then the magnetic field will induce a current via the Lorentz force. That induced current will in turn create it's own magnetic field, which may enhance the existing magnetic field. If things work out right you have a self-reinforcing dynamo where motion thru the magnetic fields drives currents and those currents in turn support the magnetic field. However, there had to be some sort of "seed" field to get the thing started in the beginning.

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The seed field might be the magnetic field of the sun but what we have today is that the magnetic field of earth cancels that of the sun in a way to protect the us from the solar wind. So I do not know how the induced field cancels the originating seed field and still sustain itself. –  M.Sameer Aug 24 '11 at 20:17
    
The seed field could be just random variation? Or does the magnetic field of the Sun/galaxy seed the fields of other planets? –  endolith Aug 24 '11 at 21:30
    
@M.Sameer: The Earth's magnetic field doesn't cancel the magnetic field of the Sun. It just diverts the solar wind. –  endolith Aug 24 '11 at 21:32
    
This may be a stupid question, but why does the induced current generate a magnetic field that reinforces the original magnetic field? I though that Lenz's rule states that the induced current will always counteract its cause? –  jdm Aug 24 '11 at 21:57
    
@jdm, that's not a stupid question. In this case the cause of the induced current is both a magnetic field and the motion of the conductor. In fact the current will result in a net force opposing the motion. –  user1631 Aug 24 '11 at 22:57

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