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Buy this essay and others in Jim's new book Being Sovereign.

The Indomitus Report

7 December 2004

Being Sovereign

    "Before you trust a man, eat a peck of salt with him."
    - Anonymous,
    quoted by Cicero, c. 75 BC

Imperial units of measure being increasingly forgotten, the peck should be defined as a measure of dry volume approximately two gallons in size. In other words, one should eat quite a few meals over a period of a year or more with someone before you trust him.

It is appropriate that this anonymous proverb forms the opening for this issue of "Being Sovereign" because one of our anonymous colleagues has done quite a bit of research on Safe-mail.net, the Israel-based "encrypted" e-mail provider. We wanted to share some of this information for your benefit. By the way, we've eaten a peck of salt with our anonymous colleague, and have other reasons to trust him.

Safe-mail.net is one of several e-mail services that offer to provide secure, encrypted, web-based e-mail service to the general public. The idea seems to be that people who would not be willing to take the fairly short amount of time to learn to use PGP encryption would be able to secure their e-mail by trusting a third party, in this case the folks at Safe-mail.net.

We reject that idea on several grounds. First, the company that provides Internet services for hosting the Safe-mail.net system is Barak.net.il, based on our review of the domain registration for Safe-mail.net. Barak.net.il is one of three companies with a license from the Israeli government for providing similar Internet services, according to the English-language version of their web site, as we understand it. Perhaps it is merely a coincidence that Ehud Barak was once head of the Israeli Defense Forces intelligence branch.

Second, the Safe-mail.net system is "an IP trap." Our anonymous friend indicates that your IP address is linked to your e-mail account. The user agreement indicates that it is a violation of the user agreement to employ an anonymous proxy or otherwise attempt to mask your true IP address. So, while no identifying information (name, address, phone) is requested when you set up an account, your IP address may be traced to your physical location, or at least to your specific Internet Service Provider, even if dynamic IP addresses are used. Thus, your location and possibly your identity would be exposed. Also, IP addresses are not stripped from e-mails you send from your Safe-mail account, so your recipients see this information. (And, of course, you may be tempted to identify yourself to your correspondents within your purportedly encrypted e-mails.)

Third, Safe-mail.net makes the usual disclosure that they may disclose your account activity, stored e-mails, and other information upon court order or law enforcement request. They make the unusual variation of this disclosure by stating that they may disclose these things whenever it is in their interest to do so. This vague contract clause should scare anyone who thinks about it even briefly. Given that Barak.net.il is licensed by the Israeli government, it would seem quite likely that the Israeli government could command that the data from all Safe-mail.net accounts be provided to the government, and it would clearly be in the best interests of Barak.net.il and conceivably, by extension, Safe-mail.net to make such disclosure. Then it would seem to become a question of whether you have reason to trust the Israeli government.

We found no details about the encryption algorithms used to provide for security with Safe-mail.net. An investigation of Israeli law suggests that there is a mandate that encryption have back doors or key escrow for use by Israeli authorities. So, again, it would appear to be a matter of whether you have reason to trust the Israeli government. We don't have anything against the Israeli government that we don't also hold against nearly all other governments worldwide.

It is widely known that Israeli security and intelligence services have cooperative relationships with the related services of other countries. For example, if a USA government agency wanted information on someone who happens to use a Safe-mail.net account, it seems logical to suppose that a request (formal or informal) might be made to the Israeli government.

While it is impossible to know whether or not Safe-mail.net accounts are "Mossad-transparent" or a kind of intelligence sting operation run by the Mossad, or others within the Israeli government, what is publicly stated about the system seems to be closely aligned with what one would expect to find in that case. We have no information presently at hand that would tend to disprove the hypothesis that Safe-mail.net is an intelligence sting operation.

There is always free meat in a bear trap. Be careful.

Free Market Money

    "Whenever the paper has not been convertible into specie, and its quantity has depended on the policy of the government, a depreciation has been produced by an undue increase, or an apprehension of it."
    - James Madison c. 1792

We learned recently that the gold ETF appears to be in trade now. For various reasons, we concur with the analysis by Jim Turk that these gold exchange traded funds are paper and are not gold. We do wonder how they can be viewed as convertible into specie, given what has been revealed about them. In some ways it is not surprising that the government has seen fit to license these funds for operation.

A few weeks ago, we had the idea that one might be able to trade gold and other commodities on a private exchange service comparable in type to the PVCSE.com. This sort of innovative approach would allow gold contracts to be paid in silver or platinum, would allow all other metals to be paid in grams of gold (gAu) and would permit trading stable from the bizarre influence of the dollar.

Gold Mining

This week, after thorough review, we are prepared to suggest the following stox: in the area of exploration, Luzon Minerals and Almaden; in the area of resource holding, Silver Standard, Lumina Copper, and Vista Gold; in the area of mining, Northgate Minerals. Wait! Before you rush into positions on these stocks, be aware that end of the year tax loss selling may reduce their prices. So, if you have a bit of patience, you may bring your entry price down.

We continue to favor Freegold Ventures. Recently trading for about US$0.31, the company has about US$2.2 million in cash, about 526,000 ounces of proven and recoverable gold, around 1.2 million ounces of inferred gold, and some 835,000 ounces of inferred silver. These resources and their exploration activities are in Idaho, Alaska, and Canada. With 27.2 millin shares fully diluted, we believe the company assets are worth between US$8.76 and US$20.46 per share before the company accomplishes any of its current exploration objectives. Our review of the company's financial statements indicate these assets are encumbered by perhaps $125,000 of liabilities, with additional contingent liabilities relating to the 526,000 ounces of gold of some US$396,000 due on commencement of commercial production not shown on the books as there is uncertainty of going into commercial production. In the worst case scenario, these liabilities (existing and contingent) appear to reduce the per share value by two cents.

Freegold announced 27 November 2004 that the recent drilling at Grew Creek, Yukon, shows gold of 4.34 grams per tonne over 145 feet (42 metres). The company was recently mentioned by the Grandich letter.

The story on Luzon Minerals is not quite as impressive. The company had only Canadian $447,000 last we checked. They did option from Vista Gold 100% of a property in Bolivia with some 652,000 ounces of proven or indicated gold and some 15,000 ounces inferred, with a further probable reserve of 444,000 ounces. The company has some 40.8 million shares fully diluted, based on our understanding of their financial reports. We derive a value per share of US$4.84 to US$9.97 for their assets at $452/oz for gold. The company has liabilities of about $65K. Their market capitalization is a scant C$9 million.

However, we are very interested in the prospects for Bolivia as a gold mining location. There is a good exploration story on the company's property at Liphichi which the company has optioned to own 100%. The property is a geological analog to the Bendigo District in Australia. The mines at Bendigo operated from 1854 to 1953, producing 22 million ounces of gold; an Australian company has consolidated the district and delineated a further 11 million ounces of gold under the old workings. Luzon is working with Bendigo Mining's geological consultant, Dr. Simon Dominy on sampling protocols for Liphichi.

At Liphichi, gold occurrences have been found over a strike length of 14 kilometers and over a vertical extent of 700 meters. Gold is found in quartz veins and stockworks in association with stibnite and arsenopyrite. Previous drilling and channel sampling have shown a mineralization structure of up to 50 meters width, grading up to 5 grams per tonne. Luzon has embarked on underground tunneling and drilling at Liphichi and has refurbished an existing adit. Drill bays have been installed in the footwall and hanging wall of the structure and drilling is being done on fifty meter centers.

The Amayapampa project in Bolivia is the aforementioned project optioned from Vista Gold. Vista performed feasibility studies there in 1997 and again in 2000. Vista has proposed mining the deposit at Amayapampa at a rate of 2,330 tonnes per day, using open pit mining to produce an average of 41,000 ounces per year at a cash cost of $168/oz. The initial capital cost, including working capital, is estimated at $26 million. The measured and indicated resource is 12.6 million tonnes grading 1.61 grams per tonne Au. The resource was delineated by 19,971 meters of RC and diamond core drilling and 5,355 meters of underground channel sampling. The project is fully permitted. The company is negotiating with the indigenous people of the area to allow use of the surface lands required for the project.

Of course, the opportunity with these exploration companies is to buy into the process of discovery at an early stage. Provided the discoveries are substantial, and don't fall into what our friend Rick Rule calls the "small mine trap" the opportunity can be very substantial. Of course, another aspect of Rick's advice is that very few of the many thousands of geological anomalies that are discovered each year ever become mines. So, it is important that an exploration company be looking for large deposits, preferably in places where large deposits are found. In this way, the return may be large enough to reward for the substantial risk involved.

Almaden Minerals is a similar story, although we see the company trading at values close to the asset values we calculate for them. We show Almaden holding C$5,500,000 in cash, with 207,600 oz indicated and another 207,800 oz inferred gold. Their exploration projects are in Canada and Mexico. They have 60 million shares fully diluted, as we understand it. Based on these figures, we calculate a value of US$1.63 to US$3.18 per share for their assets. The company has C$487K in current liabilities, and some $353K in contingent liabilities involving a dispute over the deductibility of certain expenses in a matter currently being defended by the company against the "British" Columbia Ministry of Energy and Mines.

We met both members of the father and son team of J. Duane Poliquin and Morgan J. Poliquin on our recent excursion to New Orleans. Duane has an impressive track record of finding large gold mines. Both have excellent credentials and experience in mining.

We like the company's approach to finding gold projects and acquiring them mostly by staking. This approach means that holding costs are low. The company then tends to develop its properties through joint ventures with companies that specialize in mining operations. The exception to this rule is their Elk or Siwash property in Canada which they own, explore, and develop on their own.

Their Siwash gold deposit appeared to have as much as 141,962 ounces of gold in 123,142 tonnes as calculated at the completion of the drill program in 2000. A further drill program has been conducted in 2004, which produced a "calculated global resource" of 207,600 measured and indicated ounces of gold and a further 207,800 inferred ounces of gold.

Elsewhere in Canada, Almaden has optioned their PV Au-Ag project in Coast Salish Columbia to Consolidated Spire Ventures. Spire may earn 60% interest by issuing 1.1 million shares of Spire to Alamden and spending C$1.3 million on the property. Surface grab samples have returned values up to 43.3 grams per tonne Au.

Almaden has optioned their Mor, Caribou Creek, and Cabin Lake properties to Kobex Resources which may earn 60% interest by expending C$1 million in exploration and issuing 1.1 million shares of Kobex to Almaden. A news release of 29 October 2004 by Almaden indicates that the Mor prospect has significant copper, zinc, gold, silver, and lead. Intervals with over 1% copper, over 1% zinc, and up to 40.71 parts per million silver were identified in a two hole diamond drill program completed in August 2004.

In Mexico, Almaden has optioned its Fuego Au-Ag property to Horseshoe Mining which may earn 50% interest by spending US$2 million on exploration and issuing a million shares of Horseshoe to Almaden. An option to acquire a further 10% for an additional US$1 million on exploration would bring Horseshoe's interest to 60% whereupon Almaden would have 120 days to sell its remaining 40% to Horseshoe for 40% of the issued capital of Horseshoe. Horseshoe has already carried out surface geologic mapping and rock and soil sampling, revealing up to 13.6 grams per tonne Au and 643 g/t Ag.

Caballo Blanco Au-Ag-Cu in Mexico has been optioned to Comaplex Minerals, with a drill program to commence in October 2004. Galeana Au-Ag in Mexico has een optioned to Grid Capital. The El Pulpo Cu-Au-Ag project in Mexico has been optioned to Ross River Minerals. Best result on this last property intersected 1.02 meters showing 3.73 g/t Au, 157 g/t Ag, 0.94% Cu.

Almaden's Bufa Au-Ag project in Mexico is optioned to Grid. The property surrounds the town and mining camp of Gaudalupe y Calvo in Chihuahua. Gold was discovered there in 1835 and was sufficiently productive that a mint was built there in 1844. Historic production of 2 million ounces Au, 28 million oz Ag has been estimated. Chip sampling at 33 locations show values up to 13.95 g/t Au. Drilling was to commence October 2004.

Almaden has optioned their San Carlos Cu-Au-Ag project in Mexico to Hawkeye Gold and Diamond. The company's BHP Billiton joint venture is a regional exploration program to identify new Cu-Au deposits in Mexico. A recent company brochure indicates an "ATW diamond project" in Canada between the Diavik and Snap Lake deposits, of which Almaden seems to own 40% of the 75% stakeholder.

A completely different approach to resource development was disussed in a panel discussion at the New Orleans conference. This approach was characterized by Rick Rule with the question "why mine?" The idea is that with prices for gold, silver, and other metals generally on a rising trend, it makes more sense to hold resources in the ground rather than mine them for immediate sale.

Silver Standard takes this idea one step further by having some 1.95 million ounces of silver bullion in inventory. Recent information indicates US$40.4 million cash (& marketable securities), 508.4 million oz indicated silver, and 446.1 million oz inferred silver in projects in Canada, the USA, Mexico, Argentina, Chile, Australia, and Peru. The company has 54.5 million shares fully diluted, as we understand it, and we calculate an asset per share value of US$74.60 to US$139.26 depending on what you believe about inferred resources. With a recent share of about $14, the SSRI stock looks like a "ten bagger" to use the term coined by Doug Casey.

In keeping with the fact that the first of Doug's seven "P's" is "people," let's take a look at 'em. It was over ten years ago that the legendary Jim Blanchard, Rick Rule, and Bob Quatermain decided that resource stock investors should have a pure play for silver. They reorganized "Silver Standard" and put Bob in charge. The objective for the company was to have a billion ounces of silver resources.

According to Brien Lundin's Gold Newsletter for November 2004, which we snagged in the registration loot bag in New Orleans, the "new block model" estimate of SSRI's La Pitarrilla (near Durango, Mexico) contains 60.2 million ounces of indicated and 12.9 million ounces of inferred silver. The indicated resource figure is up 46% from previous estimates, and was added for about two cents an ounce. The company now controls 868.9 million ounces of indicated and inferred silver.

Briefly, the company has 100% of Pitarrilla in Mexico, 50% of Manantial Espejo in Argentina, 100% of Pirquitas in Argentina, 100% of Bowdens in NSW Australia, 100% of Challacollo in Chile, an option for 100% of the silver at Maverick Springs in Nevada, 100% of Shafter in Texas, and an option for 100% of the silver at Berenguella, Peru. SSRI bought 93.8 million ounces of silver and 820,000 ounces of gold from Pacific Rim Mining in 2001 at Diabillos in Argentina for about 2.5 cents per ounce silver-equivalent. They also have 100% of the Candelaria mine in Nevada. Other projects not on their 2004 summary show in Canada, Australia, Argentina, Mexico, and Chile.

Liabilities, including current liabilities, provision for reclamation, and long-term debt amount to C$2.48 million. In other words, there is not a lot dragging this company down. The management were clever enough to see silver at $5.60 after April's high to be a good buying opportunity for silver bullion. Let's see how they are at timing their exit from this inventory now that prices have risen again.

Lumina Copper follows the career of Ross Beatty. Ross organized Pan American Silver to outstanding success. Lumina Copper is his copper version of the same. Lumina now has 28.3 billion pounds of copper in 10 separate deposits. As well, the company has 14.8 million ounces of indicated and inferred gold. Their projects are in Canada, Peru, Argentina, and Chile. With a bit over 21.4 million shares fully diluted, the company is a screaming opportunity with as much as US$2160 per share in asset value.

Nothing appears amiss on the balance sheet, with a mere C$848K of liabilities as of June 2004. Two possible difficulties are the ninth year of the traditionally eight-year copper cycle, so we may be seeing a bit of a top in copper prices, and Peru. We simply don't like the political risk in Peru, which appears to be once again heading toward thieving communism.

Fortunately, most of Lumina's properties and most of their copper and gold show up outside Peru. The company has three projects in Chile at Regalito, Relincho, and Vizcachitas for 5.74 billion pounds Cu in Chile; two in Peru at Galeno (6.1 billion lbs Cu, 2.19 million oz Au) and Pashpap (1.43 billion lbs Cu, no gold, a bit of molybdenum); two projects in Argentina at Taca Taca and San Jorge for 5.57 billion lbs Cu and 2.39 million oz Au in Argentina; three projects in Canada at Hushamu, Redstone, and Casino for 9.35 billion lbs Cu and 10.21 million oz Au in Canada. At Redstone in Northwest Territories, the company lists nearly ten million ounces of silver in its "by-products" column.

Vista Gold is described by Brien Lundin (Gold Newsletter November 2004) as "a call option on the price of gold with absolutely no expiration date" and as "the Silver Standard of the gold world." The audience in New Orleans was saddened by mention of the passing of Vista's CEO Jock McGregor, but Mike Richings seems to be doing a fine job of carrying on the traditions and business model.

The company has US$5.5 million in cash along with 12.5 million ounces of indicated and inferred gold in the USA, Mexico, and Bolivia. Please note that if you buy both Vista and Luzon, you are getting both sides of the option Luzon has for the Amayapampa property of Vista. Vista seems to have optioned this property on the grounds that it was limited to measured and indicated 660K ounces, with no significant inferred resource. We show 18.4 million shares fully diluted, so we toy with the notion of asset value per share of US$304.

We found US$4.5 million in total liabilities, including $4.1 million for reclamation and closure costs.

In terms of properties, we find most of their stars in the USA and Mexico, with one lone star, presumably Amayapampa down in Bolivia. Interesting note, the Maverick Springs property which shows as 350,000 ounces measured and indicated gold and 747 million ounces of inferred gold would appear to be the same Maverick Springs where Silver Standard has optioned all the contained silver. These relationships among players in the industry give us greater confidence that we've found a successful mix.

We still like Newmont. You'll recall our earlier suggestion contained basically the same type of analysis we've performed on the above cited companies. It seems to have worked well. The improvement in Newmont's share price speaks for itself.

For Newmont, the mining operations are in the United States, Australia, Peru, Indonesia, Canada, Uzbekistan, Turkey, Bolivia, New Zealand and Mexico. As of 31 December 2003 gold reserves of 91.3 million ounces and an aggregate land position of approximately 60,000 square miles (155,840 square kilometers). In 2003, Newmont obtained more than 65% of its equity gold production from the United States, Australia and Canada. Shares Outstanding: 443.91 million.

Newmont offers cash per share of $3.78; gold per share of 0.206 ounces (recent value $93.58); an annual dividend of $0.40/share; a dividend yield of 0.85%; diluted EPS of 1.027

Northgate Minerals acquired the Kemess Mining district from a bankrupt predecessor near the bottom of the recent commodities bear market. Ken Stowe and Terry Lyons have built an excellent team to take advantage of this opportunity. The company recently showed current assets of US$39.7 million, gold of 2.061 million ounces proven, 6.224 million ounces indicated, and 2.3 million ounces inferred; copper of 459 million pounds proven, 2.2 billion indicated, 700 million inferred, all in Canada. They have 198.8 million shares fully diluted, giving the company an asset value per share of US$85.40 to US$292.

This company is not an exploration play. It is a mining company, with basically one mining resource sitting in two big chunks. The mine is currently operational, it is currently moving enormous tonnage of rock every day, it is currently producing gold and copper. We see a mining rate of 150,000 tonnes per day and a mill throughput of 52,000 tonnes per day. The life of the existing mine profile shows 300K oz Au per year and 75 million lbs Cu per year, with cash costs of $150/oz Au and $1/lb Cu.

The one big chunk is the Kemess South Pit, with a reserve of 2 million ounces and a resource of 0.8 million ounces. The Kemess North chunk has a reserve of 4.1 million ounces Au and 1.46 billion lbs Cu. When these chunks are used up in another two decades, the company anticipates having discoveries in the region to keep its mill running. Three projects in the region were profiled at the New Orleans show. the closest seems to be the Sustut copper project, just 40 kilometers away, acquired at a penny a pound of recoverable copper, showing a measured and indicated resource of 4.6 million tonnes at 2% copper. (Now, a tonne is 2,200 pounds. We figure 202.4 million pounds Cu.)

The company produced 79,311 ounces of gold in third quarter 2004 and 18.7 million pounds of copper. For that quarter, they show a full absorption cash cost of $129/oz.

We think Northgate is undervalued on a price to net asset value basis. It is also undervalued on a price to cash flow basis. We see it as a hundred-bagger.

The company gave us a DVD at the New Orleans show which indicates some prospect for a hydroelectric power project using the company's property and power lines. We know nothing about the energy business, so we won't evaluate that possibility. It might be icing on this delicious cake, but it might be gravy.

Here's how the stocks we presently suggest in this area look right now:

Company Symbol C$ US$
s
Almaden AMM.TO 1.74 - -
Free Gold ITF 0.37 0.276
+C$0.09
Luzon LZN.V 0.29 - -
Lumina LCC - 4.64 -
Newmont Mining NEM - 45.72
+2.42
Northgate NXG - 1.65 -
Silver Standard SSRI - 12.78 -
Vista VGZ.TO 5.00 - -

We did tell you "tight trailing stops" on Newmont and Freegold, which are down, as predicted, with perhaps more end of year tax loss selling yet to come. You should have sold by now to preserve your profit. If you didn't, you should look at these lower prices as an opportunity to add to your position. If you did sell, you should watch the market until the first week of January, or buy in at the last of December.

Free Market Money

For a few months, we've been predicting a gold close at $480 or above before the end of the year. There's still time for it to happen, even if briefly, but there is an unexpected battle at $455 which seems to be holding things up.

Silver has come up to spend quite a bit of time at or near $8/oz. We expect it to pull back a bit, but not far. We may be seeing the thirty-day moving average above $7.50 for more than 30 days, which would signal the doubling of the Liberty Dollar.

We read a very interesting article by Michael Bolser in the November 2004 Gold Newsletter. Michael's site is interventionalanalysis.com and the article is the October entry in his articles section. He makes a compelling case that technical analysis fails when one of the players in the market is government. Obviously, during the period from 1792 to 1971, the prices of gold, silver, and copper were fixed to the dollar, though not without periods of significant fluctuation or even divergence from the world market.

We met Michael at the New Orleans show, but lamentably we were thoroughly distracted during his presentation in the exhibit hall. Too many people were stopping by Doug Casey's booth to make all manner of inquiries. Nevertheless, the article Michael wrote goes a long way to developing the theme for his site. One of his interesting techniques is what he calls "multi-phasic" regression which he uses to test parts of a data series to detect randomness. Obviously, where a part of the data set approximates a straight line, there is evidence for manipulation. That's especially true when the data is a long-term moving average, such as the 200 day moving average. (As Michael notes, a moving average is like melting ice cream. The longer the period, the more melty it looks. In our view, the presence of straight lines in long-term moving averages suggests that a series of market operations have produced a desired effect.)

Michael finds some very interesting straight lines which crop up in his "Dollar Index Value of Gold" (DIVG) and the Multi Currency Dollar Index (MCDI). The DIVG is calculated by taking the London PM fix times the MCDI divided by 100. Michael found a 200 day moving average sitting at 323 on this index for about nine months in 2003, and then the same 200 day moving average moving at about a 45 degree angle for several months thereafter. He gets r-squared values very close to unity on two other long term moving average lines he finds in data from the Federal Reserve relating to the MCDI.

One of the events that impressed Brien Lundin was Michael's ability to state categorically that the gold price was about to be slammed "tomorrow" and come to find out it plummeted $7 immediately after the opening bell as predicted. For us, the chill-spine effect comes with Mr. Bolser's concluding words, "The government appears to be engaged in a very large, computer-driven effort to steer major strategic commodity markets and financial indexes, suggesting leaders have already concluded that the American financial system is unsustainable without such intervention." Emphasis in the original.

The two stocks we've suggested in this sector are PVH and MCG. PVH is down a tiny bit from .043 gram/share to .042 gram/share. MCG is unchanged.

Space Frontier

    "I am confident we can launch in the May to June timeframe."
    - Bill Parsons, Shuttle Program Manager
    7 December 2004

It's official. NASA won't kill any batch of seven astronauts with the shuttle until May 2005. NASA plans to fly shuttle Discovery between 12 May and 3 June 2005 to test new hardware and procedures for inspecting their fool orbiters in-flight and to rendezvous with the Internationalist Socialist Space Station.

Parsons also says that NASA's shuttle team think they've turned a corner. We get no thrill from watching these buffoons send more men and women to their deaths.

Meanwhile, speaking of corners and other things one can hit on the way toward the door into space, we've learned that the upcoming 23 December 2004 flight of a Progress freighter from Baikonur Cosmodrome to the space station is fairly critical. It would carry seven extra containers of food. If, for whatever reason, it doesn't reach the space station as planned, the crew aboard the space station would have to return to Earth. Or face starvation.

Yeah. Starvation. That's such a nice Christmas gift to the astronaut and cosmonaut. The good news, such as it is, there is a Soyuz vehicle docked presently, so the crew can return home. The bad news is that NASA is continuing to develop its X-38 for larger station crews, and that means more governmental intervention in the free market for passenger space transportation. Not that we have any iota of surprise for such developments.

Here's how things stand for the stock we suggested in this sector:

SpaceDev is at $1.80.

Launch Technology

    "It was basically a volunteer project, putting it together."
    - Una McAvoy, 7 December 2004

The da Vinci Project has their balloon. The team recently assembled the helium balloon needed to lift their rocket to 70,000 feet altitude so that its engines can start their work high above much of Earth's atmosphere.

The balloon's twelve polyethylene panels were manufactured in the USA and sealed together in Toronto. The first launch window for the team expired before the balloon's components could be obtained from suppliers. We are following this story closely and will find out if it may have been a delay due to customs or export licensing. (Trust the USA government to play dirty pool so the Canadian team cannot win the X-Prize.)

Meanwhile, the team, still funded by The GoldenPalace.com casino claims the balloon is the world's largest reusable helium balloon. No idea why they aren't using clean and safe hydrogen, for extra lift and lower cost, but there it is.

"It's like everything else in this project," said Brian Feeney, "we've overcome barrier after barrier driving toward our goal of private manned space flight. We're definitely moving toward a first flight as early as feasible in 2005. This team is the most tenacious forward-thinking group of volunteers ever assembled."

New Country Developments

    "There are bandits on the Hemp Road. Sometimes enough of them get together to set up a town and collect tolls. Now, all towns collect tolls, one way or another, but most of them give something back. Keep the roads up, provide dinners, drive away [thieves], keep a good market square open. Bandit towns just take. When that happens, all the wagon trains get together and go burn them out."
    - Larry Niven, Jerry Pournelle,
    The Burning City, 2000

On 29 November 2004, Bolivian truckers parked their rigs at border crossings and around customs houses to protest a tax they say prevents them from being able to compete with truckers from other countries. Enrique Martinez of the Bolivian Transport Association says the protests began on the borders with Chile and Argentina. In Santa Cruz, the eastern city which is the center of Bolivia's export sector, a long column of trucks has deliberately blocked access to customs facilities.

Insider reports we've received suggest that much of the current drama involving customs and duties at the Bolivian borders has been a deliberate attempt to re-establish certain black markets for the benefit of corrupt government officials and their families. It appears that the benefit to the family of former dictator Hugo Banzer may have been as much as $1.5 billion.

Bolivia has certainly caught our attention as a country which seems about to disintegrate into two or more countries. Jim Rogers thinks it may be the next big opportunity in this hemisphere.

Meanwhile, it seems that five of the nine mayoral contests in provincial capitals in Bolivia have been won by newcomers representing various new political parties in the election of this past Sunday. Of course, elections are never our favorite news, and the less so when it appears that the party calling itself "Movement Toward Socialism" won 16 percent of the vote, more than any other formal political party in the nine provincial capitals.

On the plus side of the ledger, business leaders in Santa Cruz went on strike 11 November for 24 hours to highlight their call for a referendum to define the autonomy of their province. Their secessionist leanings come from their conviction that their companies propel most of the national economy. Incompetent government and regional development in Santa Cruz have fueled these views.

There has been enough violence against government tax collectors and officials, along with riots in La Paz over the exporting of natural gas through Chile that the USA issued a travel warning on Bolivia citing "unstable political and security situation." So, just our kind of place.

Longevity

When Life Extension magazine and Life Enhancement agree on the value of something, it certainly gets our attention. We've seen several articles on turmeric (Curcuma longa) or curcumin. Turmeric is the seasoning which, as Will Block points out, gives curry powder and yellow mustard their yellow color.

Martin notes, "Turmeric is rich in its active compound, curcumin, which is widely prescribed in Indian medicine as a potent remedy for liver disorders, rheumatism, diabetic wounds, runny nose, cough, and sinusitis." These disorders, you'll note, have in common an inflammatory reaction.

Curcumin may prevent cancer. It may suppress the proliferation of cancer cells. It may inhibit cancer metastasis. So, that boring, bland hospital food may be exactly the wrong thing for cancer patients, who might do much better eating a lot of curry powder.

Curcumin studies suggest it has value in preventing cataract formation, recovering from liver injury, and recovering from heart attacks and stroke. It may also work, especially with rosmarinic acid, in preventing the formation and extension of beta amyloid fibrils, a formation associated with Alzheimer's. Curcumin has also been found to inhibit "neuroglial proliferation" associated with Alzheimer's. It may also be useful in fighting Parkinson's disease.

You may be asking, "If it is anti-inflammatory effects, why not aspirin?" And, indeed, various anti-inflammatory compounds exist including aspirin and ibuprofen which are referred to as "NSAIDs" or non-steroidal anti-inflammatory drugs. The problem is these compounds often result in gastrointestinal, liver, and kidney toxicity which a UCLA study traces to NSAIDs inhibiting cyclo-oxygenase-1, an enzyme which protects the stomach lining. Curcumin avoids this side effect.

We strongly recommend you read up on curcumin.


Publication note: More next week.


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