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

The Indomitus Report
Volume 2, #9

11 March 2005
Number...Nine!

Being Sovereign

    "There is always something new out of Africa."
    - Gaius Plinius Secundus, Natural History, c. AD 70.

We had a conversation in a discount store the other evening. The cashier was a middle-aged black woman. She wanted to know if we'd been fishing in our multi-pocket vest. Some days we like to say that we've been fishing for men, but there are so few of these to be found among the cowardly and contemptuous that it has been months since that's spilled out.

This time we mentioned that we were back from Africa. ("Nach dem Spiel est vor dem Spiel" - after the game is before the game, as Herberger wrote.) "Oh!" she says, "I've always wanted to go. Is it nice?"

"There's a lot of it. Some of it is very nice," we replied. Africa's north to South extent is as great as the distance from San Francisco, California to Santiago, Chile. Counting the Cape Verde islands and Mauritius, it is as wide as Europe from Reykjavik to the Urals. Put another way, its east to West extent is about as great as the distance from Miami, Florida to Honolulu, Hawai'i. Such analogies come to mind now, but at the cash register there was this expansive silence.

She rang up our purchases. We ran through ways of saying how big. "It's the second largest continent, you know. Asia is biggest, and then Africa." This felt lame. Her expression confirmed this feeling.

"Do you like it there?" she wondered.

"Oh, yes. There's some parts of east Africa which are very pleasant," we noted, thinking of the highlands of Borama and the Harawe valley.

"Would you live there?" she wondered. We couldn't help but think of a Korean exchange student we'd met who had visited Tokyo, unable to speak or read Japanese. After getting lost on the streets, he'd spent the rest of his stay inside his hotel room, unwilling to venture out in a city where he looked like a native but couldn't understand anyone nor anything.

"Sure!" seemed like the polite reply, but insufficient. "It's like anywhere. If you know people and have friends, it can be fun."

We wandered out while she was saying how she would start saving up money for her trip. It's good for a person to have ambition. We wish her well. Who knows, maybe she'll have enough put aside before the impending great devaluation makes it all worthless. If so, then she'll have her chance to make a trip.

Last week, we were chattering on about horses. They are very nice. Horse racing is the sport of kings. Plenty of sovereignty there. Horses are also quite intelligent. Horse whisperers have cracked some of their language code. They are herbivorous, gregarious, and hierarchical to a fare thee well. Like most herd animals, they play endless dominance games, so they are extremely vulnerable to anyone more dominant. Their use as pachyderms and cavalry mounts has inspired an enormous amount of technological innovation. The horse is the original one horsepower engine. So, of course mankind enslaved them.

One of our favorite frequent correspondents wrote in to ask about this heartless outcome. Why did we make horses into slaves? Writing near the turn to the Twentieth Century, Oscar Fingal O'Flahertie Wills Wilde commented, "The fact is that civilization requires slaves. The Greeks were quite right there. Unless there are slaves to do the ugly, horrible, uninteresting work, culture and contemplation become almost impossible. Human slavery is wrong, insecure, and demoralizing. On mechanical slavery, on the slavery of the machine, the future of the world depends." Twenty seven years later, Havelock Ellis would contemplate the result for many factory worker by suggesting that sometimes machines had become the masters of men. So, better horses than men, if slaves must be had.

Better still, certainly, if no slavery and no coercion is called for. Coercion breeds coercion, as our friends in the Taking Children Seriously movement have often noted. Thus, our plan for this week to contemplate the motorcycle as a useful tool, a sort of mechanical horse which, on a gallon of gasoline will go further, faster, than a horse ever could on a hundredweight of oats and hay.

The conversation at the cash register gave us pause, though. Which is more important as a tool, the motorcycle or the globe?

The motorcycle as an instance of a model horse is certainly intriguing. It has evolved tremendously since the age when it was a bicycle with a motor, about the time of Oscar Wilde. Engines are much more efficient at converting energy to power. But the globe, as an instance of a model planet is certainly more valuable.

People really have little notion of how big the planet is. They stand on the surface of this spinning ball that is hurtling about the Sun which is in turn orbiting the galaxy, but they perceive none of these things. One watches science fiction films by turns appalled by how little technology mankind has, and how little understanding. The other day we were reminded of the film Starship Troopers in which a character gifted with genius comments that his friends will soon be separated by the vast extent of the galaxy. "We'll be millions of lightyears from each other." In a galaxy 100,000 lightyears in extent? That would be impressive.

Traveling about as we've done from Maine to Honolulu, from Florida to Fairbanks, it seems likely that most Americans are seeing the same things wherever they go. The landscape may vary, but the shopping malls and strip centers are identical. For variety, the small percentage who travel internationally may have seen London or Paris. How many Americans have been to Prague, Johannesburg, Buenos Aires, or Dubai? A handful have been further afield to Mogadishu, Tashkent, or Ulan Bator. La Paz might see a thousand Americans in a year, and the next year it would likely be mostly the same thousand. People are parochial, complacent, and not especially curious. Those with a bump of curiosity are now as likely to do a web search as a globe trot.

In future weeks we'll revisit the motorcycle, the dirt-bike-mounted dragoons, and other travel concepts.

Free Market Money

It seems that the Oracle from Omaha is right. Currency markets became more disorderly this week as one of Japan's ministers - "more sinister than minister," as Ru B. Rod might say - commented that the central bank should hold a diverse set of foreign currency reserves, not just dollars. This comment was quickly retracted and the usual spin was added to the effect that Japan is not abandoning the dollar. With South Korea's similar announcement at the end of February, anyone with eyes can see the handwriting on the wall.

It is not much of a Cassandra accomplishment to say that currency markets have effects on matters political and financial. After all, the inflation of currency is a political and financial operation. So, of course it has consequences in those spheres. Inflation robs everyone of the value of their money. Lately, the government has been lying about the extent to which inflation exists. But, with oil prices above $50/bbl it is not hard to perceive inflation.

One of the solutions to inflation is to hold gold and silver rather than cash. We've identified numerous ways to accomplish this goal. And, of course, it is useful that gold and silver are accepted at various online merchants as well as in cash register encounters.

One of these solutions is the Liberty Dollar. To our knowledge it is the only approach to circulating specie that addresses the problem of Aristophanes or Gresham - that money with no face value or a face value below its metal-content value won't circulate. Only if it has a face value would specie be accepted at a cash register. Only if that face value is greater than its metal value would it circulate. Specie cannot be expected to circulate with a face value lower than its metal value, which is precisely why the USA Mint puts "one dollar" on the American Silver Egale one ounce silver coin. Doing so forces the coins into private stockpiles (known to statists and socialists as "hoards") where it has limited economic impact.

Given that the German mark catastrophic devaluation could happen again, here, over an even shorter period of time (see Landis), it is not a bad thing to have gold and silver in inventory. Given the gold confiscation fiasco of 1933, it would be wise to have some of that gold and silver where you can get at it directly and immediately. (GATA.org recently found the gold silver confiscation law is still on the books and queried the USA Treasury Department at the end of January 2005 about this matter.) With the ounce of silver going for 12 German marks at the beginning of 1919 and for over 543 billion marks at the second week of November 1923, it would be useful to be able to convert from your stockpile of silver to a bit of local currency when needed. However, a free market money alternative, such as the Liberty Dollar, makes even more sense. It addresses the monopolistic and corrupt currency machine directly.

Gold Mining

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

Company Symbol C$ US$
s
Exploring
Almaden AMM.TO 1.80 -
C$0.06
Free Gold ITF.TO 0.205 0.16
- C$0.075
Luzon LZN.V 0.31 -
C$0.02
Western WNP.V 3.75 -
C$2.01
Holding
Lumina LCC - 7.62
2.98
Silver Standard SSRI - 14.17
1.39
Vista VGZ.TO 4.90 -
- C$0.10
Mining
Newmont Mining NEM - 45.68
2.38
Northgate NXG - 1.67
0.02

We've not heard back from our friend who attended the mining conference in Toronto this past week, so we don't yet have a report on our problem stocks. Fortunately, higher gold, copper, silver, and uranium prices have made things less problematical. Vista is closing its gap and Freegold isn't any worse.

We were surprised, though not dismayed by the announcement of a $20 million placement for Western Prospector. So, the market responded by dropping the price 30 cents a share. Not a terrible discount. If you've doubled on our suggestion, you might want to sell half your position and await further developments. (Doug Casey has, in his excellent newsletters, made the suggestion that investors sell half when they get a double - the rest is gravy. We like his logic.)

Coming in late Spring, we expect Lumina to split into four companies, as previously mentioned. The stock seems to be rising in anticipation of this share dividend. We suggest you follow that story as it develops if you are holding LCC shares, because we may not be timing our newsletters to cover things perfectly. It may be that one of the stocks is the most desirable and immediately shoots up; another may seem to be the least desirable and drop right out of the gate. So, get your understanding in place before the split. We'll do our best to inform you.

Free Market Money

This week has seen nice increases in the metals we follow.

Gold closed $445.50 today. It looks to be heading for its upper channel marker in the next week or two. News about the dollar reserves at Asian central banks not increasing as fast seems to be one of the factors in this rise.

Silver closed at $7.51 today, pretty closely mirroring gold's rise.

Copper closed at $1.5147 per pound. It seems to be tapping at $1.53/lb.

Uranium is about $21.75 per pound for U3O8. We may have to subscribe to a service to get more up to date pricing info on this key commodity.

We've not been following platinum nor palladium. Platinum is near record highs, and palladium has a lot of room to move back up. Both were up last week on news that Vladimir Putin's government is declassifying data on platinum mining. It looks as though Russia may be moving toward a more free and open market for platinum, and, presumably palladium. We've noticed that when Russians are awake, the spot price of palladium is low in Hong Kong and Zurich. When they go to sleep and the Americans are awake, palladium's price is high in New York. No doubt there is a nice arbitrage play to make on this persistent bid/ask spread.

The three stocks we've suggested in this sector are PVH, GBH, and MCG. GBH is up from last week, the other two remain unchanged.

Company Symbol gAu
D
Gold Barter Holdings GBH 0.39

- 0.610

MicroCasino MCG 0.55

+ 0.037

Pecunix Venture Holdings PVH 0.039

- 0.011

Space Frontier

It is very difficult when the government lies about you and the mainstream media publish these lies without review, remorse, or rebuttal. We know from personal experience.

So, we're glad that Walt gave an interview about his current situation. We hope it helps his defense.

"I don't need to steal money from the US government to be successful. I don't want their money," he said. The obvious implication is that the US government does need to steal his money, and the money of hundreds of millions of others, in order to survive.

Walt reportedly stood up in the hearing at which he was denied bail by US Magistrate Judge Alan Kay, at least until an 11 March hearing (about which we've not yet found any report), and said "I'm trying to run legitimate businesses and I don't intend to let the government ruin my credibility." That fight may be the hardest to win.

Walt says that the assets overseas belong to the Smaller World Foundation. He controls that foundation and endowed it with ownership of some companies he runs, such as Space, Inc., and Iceberg Transport, SA. The plan, according to the Washington Post was to have the foundation give funds beginning in 2006, after the assets had time to grow.

With respect to being arrested, he says, "It's the worst moment in my life. After 51 years of trying to do the right thing, to be inside a prison is not a happy thing." We concur in this assessment.

The Post quotes Bob Werb, an acquaintance from the Space Frontier Foundation. "He's an exceptionally charitable man. He's part of the American tradition of people who wanted to make money so they could give it away for charitable purposes. Like many businessmen, he's fairly vocal about wishing the government would leave him alone and let him do his business." Amen to that!

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

SpaceDev is at $1.79. It is up $0.29 since we first suggested it.

Launch Technology

Microsoft co-founder and SpaceShip One patron Paul Allen announced this week plans to donate the spaceship to the National Air and Space Museum. He spoke at their annual Trophy awards ceremony where he, Burt Rutan, and the SpaceShip One team received the "Current Achievement" trophy for 2005. Plans call for the vehicle to be flown across the country, with stops at at least one airshow before arriving in DC in late Summer.

SpaceShip One would be the fifth Rutan-designed in the museum's collection. The 1986 round-the-world-on-a-tank-of-gas Voyager is in the building's south lobby gallery. Rutan's VariEZ kit aircraft is at the museum's facility near Dulles. At a guess, his aircraft for Bob Fossett's round-the-world-solo flight will be added soon.

In related news, Rutan has designed and should soon start construction on a larger version of the SpaceShip One design for Virgin Galactic. It would carry up to six passengers into space starting about 2008. Thus far, the plans and drawings are secret. It appears that Virgin Galactic now has 21,000 advance customers signed up, which, at $200K a throw provides a revenue stream of $4.2 billion.

London Times Magazine reports the first flight would likely include William Shatner, who gained notoriety for his portrayal of a socialist starfleet captain in Star Trek on television in the 1960s and film in the 1980s, and Sigourney Weaver who gained attention as the sexiest passenger on an interglobal flight in the film Alien and its sequels. Likely, Richard Branson, Allen, and Rutan would be among the early passengers, as will Branson's father, Ted. Victoria Principal of Dallas television fame has signed up. So has Bill Cullen, of Renault Ireland, who has apparently paid in full up front.

We like the Times essay above cited. It says, "NASA invested in the Space Shuttle, the ugliest and most pointless machine ever built." They correctly point out that NASA claimed the shuttle would cost a tenth of the Saturn V rocket's payload to orbit cost, and in fact cost ten times as much. The NASA claim of one lost shuttle in 100,000 missions has proven mistaken, with the current standing at two lost in 113 missions. "And yet still NASA pours billions of dollars and tens of thousands of engineers into the doomed project of keeping this botched dump truck in space." Later, the author notes, "They broke the state monopoly on space and reignited the popular flame that NASA's clogged bureaucracy had all but extinguished."

"You can't fix something by throwing money at it," says Rutan, "because you make something that's bad because it's too complex even more complex." Rutan points out "but for NASA, we'd be holidaying in orbital- if not Moon-based hotels already." Also, "They should have gone into a smoke-filled room before the Shuttle flew and admitted to themselves that they'd f***ed up."

Sir Richard meanwhile, comments, "We have a wonderful telescope in Africa and my father spends a lot of time reading about space. One of his favourite quotes is that there are more stars in space than grains of sand on the Earth."

Demographics on the customers are explained by Virgin's Stephen Attenborough, who handles "high net worth" individuals for the company. Attenborough says, "About 33% of applicants came from the US, 15% from the UK, South Africa, Australia, Canada, France, and then a long tail from just about everywhere in the world."

Another Virgin exec, Alex Tai, says, "We start off with one flight a week through the first year - that's 250 people and that may come down to 200. As we see the safety and reliability and we're confident of it, then we'll scale up." The goal is apparently to reach a flight rate of once per day and reduce the price per passenger. At that flight rate, something over 2,000 space travellers would fly each year.

Next week, more on the huge Blue Origin rocket test facility and launch site in West Texas.

New Country Developments

    "Rendering punishable every person who belongs to or cooperates with a group or society ... serves as an efficient means to suppress such groups or societies, as the lawmaker intended. Rendering punishable the members or collaborators of the group or society inherently jeopardizes the continued existence or functioning of the group or society."
    - Belgium Supreme Court verdict against Vlaams Blok, 9 November 2004

We've a new respect for the Flemish. By some accounts, the Belgian Supreme Court verdict making the Vlaams Blok into a criminal organization is going to spur a Flanders secession. You can get the details on The Flemish Republic web site.

The law in Belgium is one to make the USA Federal Election Commission jealous. With the FEC now planning to outlaw web blogging on political campaigns, the Ghent verdict making a million Belgian voters into outlaws by declaring the Vlaams Blok racist appears to be the FEC's wet dream come true, though in French. Among other things, corporate campaign donations are illegal in Belgium, and private donations are limited to 125 euros. So, all political activities are financed through tax dollars. Thus, making the Vlaams Blok illegal neatly removes their share of the campaign funds. The disbanded Vlaams Blok has now re-organized as the Vlaams Belang. Our Dutch readers might enjoy VlaamsBelang.org.

Clearly, the Vlaams Blok is anti-immigration and has other unsavory ideas. However, the fact that some of their literature merely quotes government statistics on immigration and social welfare payments does seem to make the "anti-discrimination act" enforcement a bit extreme. The Flemish Republic may be a new country in a few years. Whether it would be a free country is anyone's guess.

Meanwhile, in other new country news, Sinn Fein fundraising for a free Northern Ireland has been banned in the USA. China, meanwhile, has enacted a law authorizing the use of force against Taiwan if it moves toward formal independence. "We shall step up preparations for possible military struggle..." says the new head of China's military and president, Hu Jintao.

Longevity

We've been persuaded by several reports that mixed tocopherols are much better as supplements than alpha tocopherol alone. In fact, alpha tocopherol appears to displace gamma and delta tocopherol according to HY Huang and LJ Appel, writing in Journal of Nutrition October 2003. Similarly, we now recommend mixed carotenoids to those taken exclusively beta carotene.

However, the Johns Hopkins report, coming as it does in time with plans in Congress to repeal the law protecting food supplements, has an ominous bearing. One of the key flaws in the studies selected by Johns Hopkins for their meta-analysis is that the patients involved were already elderly or seriously ill. Among other obvious deficits, the studies included in the analysis had to involve 10 or more deaths. Gee, if you select for dead people you get...fatal results.

By way of contrast, one study that involved more than 11,000 people was not included. It shows that those taking vitamin E lived longer than those who did not supplement, according to author Terri Mitchell, also writing in this month's Life Extension

If you've stopped taking alpha tocopherol and switched to a mixed tocopherols supplement, great. If you've stopped taking any Vitamin E supplement owing to the news reports on this meta-analysis from Johns Hopkins, we urge you to reconsider.

We mentioned Alteon two weeks ago. We continue to research this company. Its price is down to $0.68 this week. We don't seem to be under a lot of time pressure to take a choice before it finds a bottom.

We've not had time for Elan, and this issue is also very late.


Publication Note: The bad news is that we're a week behind. The good news on that front is that there are only two more issues for March before our vacation. So, we should be back on track soon. The other good news is that we are negotiating for a book deal.


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Indomitus Industries heraldic achievement