2004 Issues #1 to #16
Seventeenth Issue 10 January 2005
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Buy this essay and others in Jim's new book Being Sovereign.
The Indomitus Report
20 March 2005
"Home is the road and freedom is a motorcycle under me, with a full tank of gas and the time to enjoy the ride, sights, sounds, and scents around me, the wind in my hair."
This week, let's talk about motorcycles. If you've ever ridden a motorcycle cross-country, you know what we're talking about. There's a special feeling of freedom, a sort of pervasive awareness, a consciousness if you would, to being on a motorcycle, speeding through curves, "feeling the breeze, passing the cars."
She always said I was lazy.
Leavin' my home, leavin' my friends,
Runnin' when things get too crazy.
Out on th' road, out 'neath the stars,
Feelin' the breeze, passin' the cars."
Why does cycling feel so free? It is extremely individual. There's room for a passenger, but that's not often used. The motorcyclist is alone, on the road, acting for himself, taking his choices, making his own way, going where he will. Being on a motorcycle is an activity of tremendous awareness.
The rider has to be aware of posture, balance, road position, obstacles, other vehicles, the road ahead, vehicles moving up from behind, fuel, speed, and location. Failure to be aware of these things is very dangerous, even deadly. It is not like driving a car, wherein one may sort of drift or daydream while thinking about other things. Literally every moment on a motorcycle is a moment of exhilirating awareness.
Motorcycles are go-fast machines. They move very fast, they maneuver easily, and they get you further on the same amount of gasoline than a car. They weigh less, so you do have to be aware of the metal all around you. At the same time, they maneuver well so you can generally avoid things before they happen. This maneuverability lends itself to lane splitting.
Lane splitting is the process of moving through a traffic jam on a motorcycle by splitting through the lanes. In many countries, there is an entire section of every intersection, ahead of the stop line for cars, where motorcycles are expected to queue up after the cars have all stopped. The cycles simply lane split to the front. Since they have much less weight per unit power, when the light changes, the cycles are gone before most cars are up to ten miles per hour. Of course, lane splitting on the freeway during a traffic jam is even easier, and yet more exhilirating.
You'd think that cars would change lanes, smashing into cyclists. Of course, that's why one does not lane split when the traffic is light. When traffic is dense, there's a car next to every car. Drivers don't typically smash their cars into other cars. The exhilirating part about freeway traffic jams is that they come and go, with waves in the traffic. So, a shockwave is generated by a semi-truck changing lanes, and precipitates backward until traffic stops. The wave passes, and traffic moves again. The lane splitter moving to a traffic signal can tell when traffic is about to go again, because the light changes to green (and, in some countries, a pre-green signal is illuminated). No such luck on the freeway - traffic may start up at any moment. Fortunately, most highway lanes are wide enough for a car and a motorcycle to share a lane, provided at least one of them is alert at the time.
Although every free spirit should cycle, it is not the main attraction of the motorcycle for this topic. Rather, we wanted to discuss motorcycle mounted dragoons.
For some time now, we've been dealing with issues of mobility. Before that, we treated issues relating to defensive weaponry. Mobility is simply a class of defensive options you need to be aware of. If you are defending a fixed position, bad things are going to happen. If you move, you are a harder target. The analogy to your money cannot be made often enough. If you keep all your stuff in one place, it is vulnerable.
Even with multiple residences, you should add some addresses. Private mailbox services are a great thing. Your home is not a good place to interact with the government, whichever government that may be. Protect your home, your family, your children, your pets, and your assets by not having your relationship with government take place where you live. You never know when someone is going to give a false tip, or inform against you or collaborate in some way to save their skins. If no one else knows your primary residence address, they cannot compromise it.
But, you also need to consider the future. The future is going to be fantastic. We'll all live much, much longer, possibly thousands of years. We'll have access to the entire galaxy within the next thousand years, or, failing to develop some speed of light work-around, we'll have access to the thirty thousand or so stars within a hundred light years of the Sun. That's a lot of star systems. Nanotechnology will make the cost of material things plummet. The wealth of just our own Solar System will be so immense, the wildest fantasies you have would come true, and there would still be fabulous wealth for everyone. The future might be better than you can imagine, though we like the line from "Star Wars" by Han Solo, "I dunno. I can imagine a lot."
However, there exists an entirely different mentality amongst us here, now, today. This other mentality does not see the vast resources of many star systems available. Rather, it sees everything as limited, running out, getting scarcer. The proponents of this world view favor extreme population control. Ted Turner once said he'd like to see about 10% of the human race left on Earth, as we recall quite near the time when the World Series was to be held in Atlanta. (One of our friends thought it would be fun to unfurl a banner with the words, "Turner wants 90% of these seats empty!" but he couldn't get it past security.)
Freeman Dyson tells us that the universe is effectively infinite in all directions. Since we are going to be able to access the universe very quickly once we have convenient travel to low Earth orbit - the energy works out so that low Earth orbit is halfway to anywhere in the Solar System in terms of energy expenditure - we'll have access to the resources of multiple star systems. With nanotechnology, we'll be able to recover all the atoms of gold from seawater and similar tricks, again making the concept of material scarcity an atavism.
But the forward thinking, freedom oriented individualists aren't running things. People like Ted Turner are running things. At the UN, they are running in part with a billion of Turner's dollars he donated to them over the last many years. Keep in mind that the UN is doing some scary things with that money - sending troops to the Congo to extort sexual favors from children for food aid; raping women; pillaging countries; abolishing a free press in the Balkans; fighting the free press in Mogadishu to the point of killing some seven thousand Somalis between 1993 and 1995; standing idly by while various genocides take place.
Nor are the UN the worst oppressors. The various major world governments are being run, for lack of a more concise term, by jackasses. These men and women don't understand anything. They don't understand economics, so they tax everything that moves and confiscate most things that don't. They don't understand education, so they nationalize standards and socialize distribution. They don't understand the term "Ponzi scheme" so they bicker over various reforms, when it is obvious that radical restructuring will happen, before a major collapse or after it. And these men and women have nukes.
They've used them, too. Not just a while back, when the USA nuked Japan, twice, to prove that it had no respect for civilian populations in Hiroshima or Nagasaki, driving the point about how the invasion of the home islands would go home with horrifying clarity. Not just in the 1950s and early 1960s when the USA bombed its own civilian populations from various test sites, and studied the effects of fallout on various populations. Not just at Bikini Atoll or those underground test sites back in the 1970s and 1980s. But recently, Pakistan and India both detonated nuclear weapons to make it clear to one another, and to the world, that both are nuclear powers. North Korea certainly has nukes, Iran probably has them already, South Africa certainly developed them but may or may not still have them, Israel has them. Russia. China. Japan must be assumed to have its own device ("transistorized, at half the price" - Lehrer). It would not be surprising to learn that Taiwan has them, though that hasn't been admitted. Brazil and Argentina very likely have them. France has them, whoever side she's on. Britain has them. Germany, the Ukraine, and Kazakhstan have them, or have hosted them. Some are missing from Kazakhstan, and this information is fairly open knowledge.
While a nuclear detonation, or several, can reshape a city, mess up your whole day, or even change the biosphere for a time, the likely scenario is not global thermonuclear war. Much more likely, the miniscule minds in power will see the opportunity to nuke a city and use that event as the ultimate Reichstag fire to justify whatever insane level of dictatorial power they crave. Much like the decline and fall of the Roman Empire, the trick is not going to be saving the empire - the empire is toast - and it isn't going to be prolonging its death throes. The trick is going to be staying out of its way as it thrashes about at the end.
One of the obvious implications of the fairly near term future is the Balkanization of the United States. It is not going to remain an empire, its currency is going to be shredded to discourage its overseas hegemony, and it presently does not have cultural identity nor political unity sufficient to hold together. It'll split asunder. The coming rebellion phase may be the opening round in generations of war to establish who gets to live where.
Which brings us to motorcycle mounted dragoons. Let's parse that term, starting at the end. What are dragoons?
Dragoons were mounted soldiers who would ride to a battlefield, dismount and enter combat on foot. Dragoons were distinct from cavalry, since cavalry fought mounted. Accordingly, dragoons were able to take advantage of both cover and mobility. They could mount up, move to a battle, dismount, conceal their horses and themselves (leaving some men as horse holders) and engage the enemy, often with the element of surprise, since they were able to move into position rapidly.
So, why not motorcycle cavalry? It doesn't work out. The motorcycle is not an effective tool for cavalry-style charges. Owing to the dynamics of low speed maneuvering on a motorcycle, it is simply not possible to effectively engage an enemy combatant while riding a cycle. It is difficult to maintain balance while firing any weapon, especially anything as powerful as a rocket propelled grenade. Even with a second rider as gunner, the motorcycle is simply ineffective as a combat vehicle.
It is, however, very effective for dragoons. It moves faster than horses, it has greater range than horses, it carries more weight than a comparably heavy horse, and when the rider dismounts, it requires no horse holder, it doesn't nicker or whinny to give away a position, and it leaves behind exhaust rather than piles of stool. Moreover, a motorcycle may be equipped with an armor plate fairing, night vision gear, extra fuel, and become an even more effective mobility tool for moving men and materiel wherever a fight may be.
In an emergency, the vehicle can be laid down, and its armor plating used for last resort cover. (Gunfire, especially .50 caliber sniper or machine gun rounds would play havoc with the cycles, tires, engines, and riders, so this option is clearly a last resort. Plus, a heavy motorcycle won't be picked up by one rider - at 700 to 900 pounds, heavy motorcycles take two or more to lift once down - so dropping them immediately reduces their use for rapid mobility.)
There are various issues one would want to work on. A good friend has been developing a heads-up display for his closed-face motorcycle helmet. He's also suggested armored saddlebags designed so the down side bag is accessible when the bike is laid down. He mentioned camouflaged paint schemes so that it would be hard to distinguish major parts while the vehicle is in motion. Under seat fuel tanks would allow for various equipment mounted where most bikes have their fuel tank, and eliminate an obvious target for snipers.
What would a company of dragoons look like in the future? Very likely, these would be militia, rather than regular army. That is, they would have individually owned vehicles, outfitted by their owners, brought together for some mutual defense objective or series of objectives. Thus, each vehicle would be different. Common technologies would allow for some interchangeable parts. The bikes would tend to be high end dirt bikes or moto-cross bikes, for cross country capability. The troopers would wear kevlar battle armor and ceramic chest and back plates for maximum protection both on the road from snipers and in combat.
A squad might consist of four troopers led by a fifth, call him a corporal. Each squad would have two riflemen, two rocket propelled grenadiers, and one sniper. The riflemen would likely have .308 rifles, semi-auto; the sniper a .50 cal. The rocketeers would have RPG-7 launchers or equivalent. All five would have helmet mounted radios, and two of them would carry satcomm gear for communication up the chain of command.
Such a unit, being highly mobile, could move rapidly into positions, conceal their vehicles, and deploy to take an objective, snipe on an enemy position, or ambush an enemy column. The RPGs would provide effective anti-aircraft fire, anti-armor capability, and would be defended by the sniper and riflemen.
As with the Somali "technical" - nothing more than a pickup truck with a vehicle mounted weapon such as a .50 cal machine gun or one-pound anti-aircraft gun in the truck bed - these vehicles would be innocuous when not outfitted for war. Swap out the armor plated fairing, put the RPGs in the attic, and you've got a dirt bike in the driveway.
One of the fairly frequent experiences we had in Somalia was wandering out to the garage of a friend. There would be a rack of AK-47s with a couple of cases of ammo. Another friend had several very nice pickup trucks. In his equipment yard, he also had two very obvious .50 cal machine guns under tarps. Another friend had his pickup truck roaming the streets one day, and we got a lift. He took us to his place, and parked next to this tarp-covered equipment. "What's that?" we asked, hoping for something interesting. It was an artillery piece he had mounted in his truck bed the first day after Ethiopia sent 500 men over the border in 1995 allegedly "chasing criminals." He'd used it to disable the treads on two of their tanks.
Further up the chain of command, squads would form up four to a platoon, with one sargeant for 21 troops. Four platoons would form a company with a captain, an intelligence sargeant, two computer operators, two cooks, ten trucks for ammo, rations, spare parts and equipment, and ten drivers for a complement of 100. The drivers would be trained as emergency medical technicians (three of these), mechanics (three), armorers (three) and communications expert (one).
You'll notice that we've flattened the organization chart by eliminating lance corporals, privates first class, various types of sargeant, both first and second lieutenants. Note that the intelligence "officer" is non-commissioned, so that intell gets to the front line troops rapidly. Further up the chain we'd have majors run battalions of one headquarters company and six combat companies, possibly to include one air dragoons, one cycle dragoons, two companies of technicals, and two infantry. Other battalions might include artillery and armored cavalry. Obviously, mixed companies would need to be equally mobile, so the infantry would ride trucks. The headquarters company would include commo, field hospital, and additional intelligence non-commissioned officers.
Air dragoons would be similar in concept to the motorcycle dragoons, only mounted on auto-gyros or other aircraft. Again, the objective would be to ride to the battlefield rapidly, land, conceal their vehicles, and deploy. These are not air cavalry - they do not ride into combat - they are dragoons. They fight on the ground, but they get there faster than infantry. Their vehicles would also potentially be individually owned and maintained as peace-time vehicles. Of course, an air capability has immediate applications for reconnaissance, rescue, and strike force.
Colonels would manage regiments of seven battalions. Generals would manage divisions of seven regiments. Of course, a given sovereign individual might only have a squad of trusted troops, or a company. The wealthier the sovereign, the more territory and assets he seeks to protect, and the more generals he has managing his divisions.
In addition to individual sovereigns, many corporations, foundations, universities, and churches would have their own security services. As the states founder and flail, then fail, private security services would become increasingly necessary.
In the 1970s, Isaac Asimov wrote of a galaxy-spanning empire that was readily applied to the globe-spanning empires then extant. His "Foundation" trilogy introduced the concept of "psycho-history" or the study of historical trends and patterns in cultures. Harry Selden, the protagonist, and his teams of psycho-historians were able to establish that the empire would fail, that its decline could be swift or slow, and that there would be a dark age to follow. If the decline were slow, the dark age would be deeper, more primitive, and longer than if the decline of the empire were rapid. So, bringing about the rapid decline of the empire would result in a less brutal and shorter period of barbarism, and a faster rise for some new galaxy-spanning republic or second empire.
Several things about this series need to be kept in mind. First, Asimov was basically a socialist. He wasn't interested in free markets. Second, Asimov was right to see the corruption and decadence of the American and Soviet empires. No doubt we'll soon perceive decadence in China's empire, as well. The USA and Russia have no shortage of corruption and decadence for years to come. Any global empire would clearly have similar features, if one is even established.
Third, and most critically, the fall of the Roman Empire was not followed by a dark age. Rather, the Roman Empire itself was a brutal, barbaric, decadent, dark age that followed a very lengthy period of enlightenment and widespread free trade. Even with the brief period of Alexander's conquests, the thousand years preceding Julius Caesar's empire was a period of tremendous exploration and technological achievement, paid for with the wealth of enormous trading systems. Considerable evidence exists that Phoenicians circumnavigated Africa as early as 480 BC. They probably fished the Grand Banks off Newfoundland, and may have had trade with the natives of the Western Hemisphere. Trade between India and Great Zimbabwe has been well established in the archaelogical record. Before 49 BC, Archimedes had developed the calculus and recorded it in his Palimpsest (before being butchered by a Roman soldier); Aristarchus of Samos had correctly calculated the sphericity of the Earth and the distances to the Sun and Moon, and proven that both Earth and Moon are spheres (though his data was tainted by corruption in the Egyptian tax rolls, so his circumference of the Earth is off by exactly ten percent - the priests had told everyone their land was 10% larger north-South and 10% larger east-West so they could collect 21% more taxes); steam engines and indoor plumbing were well known; Aristophanes had discovered "Gresham's Law;" and a blind Greek bard named Homer sang an epic poem about the Trojan War, informing us of an earlier civilization which had motion pictures on shields, automated serving carts, and dancing golden robots, things so fantastic that he could only tell about them as artifacts of the gods themselves.
By way of contrast, the Romans first conquered the Etruscans. Then, they burned the libraries and temples of the Etruscans. Then they conquered Carthage. Not only did they burn nearly the entire Carthaginian library, they tore down the buildings "so no two bricks stood atop each other" and sowed salt in the land so nothing would grow there again. They conquered Alexandria and set fire to the great library there. The Romans did nothing to preserve art, architecture, or history. The Palimpsest of Archimedes ended up being copied a few times by Catholic monks, then the last copy was bleached and used for a prayer book. It has only recently been recovered. (Imagine what the Renaissance would have been like with calculus for da Vinci and Galileo, rather than waiting for Newton and Leibniz.) Rather than accepting the results of Aristarchus, the Romans and their hierarchical bureaucracy which survives as the Roman Catholic Church, adopted the erroneous model of Ptolemy as "received wisdom." No wonder towns all across Europe, sick of the depravity of Roman bureau-rats, tired of the corruption and greed of Roman Senators, and eager for taxes to be reduced to one part in ten, opened their gates to various barbarian hordes of Goths, Visigoths, Ostrogoths, Huns, and Vandals. (Somewhat later, the Roman Catholic Church would return to the Roman tradition, burning the libraries of Mayans, Incas, and Aztecs. To duplicate the skill with which a Roman soldier had gutted Archimedes, the Church set Giordano Bruno on fire.)
So, empires are not the peaks, they are the pits. After the fall of Rome, roughly AD 490, the two great civilizations which arose were Byzantium and the Caliphate. Both were commercial empires rather than military empires. Both valued learning and culture, preserving works of art, history, and literature. Both had incredibly stable currencies. The Byzantine "solidus" gold coin or "bezant" was so stable that it was the basis for accounting thousands of miles from Constantinople. The Islamic gold dinar and silver dirham were used from Grenada in Spain to the Pacific Rim.
Byzantium and the Caliphate held sway for a thousand years of peace, prosperity, and progress. Both were swept away by the Mongol hordes of Ghenghis Khan and his sons. Their currencies were replaced with mulberry bark paper money, the inflationary horrors of which are still remembered by peasants in India to this day. Both Byzantium and the Caliphate were colonized by the Ottoman Empire, which brought all the ills of empire back to the fore.
It is empires that conquer, sack, pillage, loot, plunder, and destroy. It is empires which enslave, whether with manacles or debt peonage. It is empires that oppress, conscript, and imprison. Empires are the depths of depravity. The periods of individual liberty, prosperity, and enlightenment are those which come between the shallow brutality of empires. Rather than emulating Rome, or the Ottoman Empire, Western Civilization should have held up its prize possession of liberty with the great tradition of distributed defense.
Empires fail. The USA empire is failing. Whether it falters sooner or later, it will fail, the country will split apart, and the surviving small holders, regions, and sovereignties will see the greatest burgeoning of art, history, science, literature, liberty, and prosperity of all time. The contest is to those who survive to see it.
From Alexander's Empire to Rome's was 300 years. From Rome's fall to the Ottoman's rise were a thousand good years. From the decline of the Ottoman Empire (at the gates of Vienna, late 17th Century) to the fall of the British Empire were three hundred years. Sometime this century, the last vestiges of empire should be swept away, and another thousand good years without any major world empire should hold sway. During that time, some of us will escape into space. Thousands of years from now, the backward peasants of this world, fighting a hopeless war for some misbegotten king for the honor of his philandering brother or the beauty of his sister-in-law may remember, sadly, echoes of the greatness which we shall see.
Free Market Money
"Fiat currencies do not float, they just sink at different rates."
We met Clyde at the 2002 Eris Society conference. He gave the most engaging speech of the entire event. And he's right. Fast or slow, the fiat paper money systems all fail.
We've written a great deal about fiat money inflation, and read a lot more. We've discussed in these pages the importance of free market money, and the discipline the market brings with gold and silver. But we hadn't heard about the five quadrillion percent inflation in Yugoslavia between 1 October 1993 and 24 January 1995.
James Lyon wrote about it in "Yugoslavia's Hyperinflation, 1993-1994: A Social History," published in the East European Politics and Societies journal, volume 10, number 2, Spring 1996, pages 293-327. Our friend Bob Nugent was kind enough to upload few pages of this text.
One of the choice examples of irrational government policies is autobiographic. Lyon, a journalist, made twenty hours of international telephone calls from Belgrade, Yugoslavia in December of 1993. The bill for these phone calls was 1,000 "new new dinars" and it arrived on 11 January 1994. At the exchange rate for 11 January, one Deutschmark was 150,000 dinars, so it would have cost less than one German pfennig to pay the bill. But, the bill did not come due until 17 January 1994, by which time the exchange rate reached one Deutschmark to 30 million dinars. By some measures, the more or less free market or Western cost equivalent for those twenty hours of phone calls was about $5,000. The government, despite being depleted of hard currency reserves, gave jounralist James Lyon about $5,000 worth of phone calls for next to nothing.
Many observers suggest that Yugoslavia was better off under Tito. His partisans had certainly done a number on the Nazi occupation of the Balkans during World War 2. He did hold the country together, though not without oppressive policies of his own. His government ran a budget deficit which it financed by printing money. So, a persistent rate of inflation of at least 15 to 25 percent resulted, year after year.
As the Balkans, well, Balkanized, Tito's successors in the communist party ran increasingly irrational economic policies. To finance their madness, they printed money. The result was hyperinflation.
The worst sign is always currency controls. In the early 1990s, the government had used up its own hard currency reserves. So, those in power wanted to loot the hard currency of private citizens. Having already monopolized banking to the government, they simply made it increasingly difficult to access private hard currency savings in government banks.
Price fixing led to scarcity in Revolutionary France. The fiat money inflation raised the price of bread, the people complained, and the national assembly fixed the price of bread. So, of course, bread disappeared from the shelves of public markets. The clamoring was so great that Marie Antoinette asked about it. What were the people upset about? There was no bread. So, this naive and sheltered woman pondered the condition for a moment and wondered why the people don't eat cake. For her, the absence of bread at a meal would invariably mean cake or some other good food was available. Her famous utterance was regarded by the Jacobins as an indication of cruelty. So, they chopped her head off. Ultimately, the law of the Maximum under the Directorate and the fiat money laws mandating the acceptance of assignats and mandats and criminalizing the use of gold and silver specie resulted in the deaths of hundreds of government victims at the guillotines.
Much the same in Yugoslavia. Lyon reports, "The government operated a network of stores at which goods were supposed to be available at artificially low prices. In practice, these stores seldom had anything to sell and goods were only available at free markets where the prices were far above the official prices that goods were supposed to sell at in government stores. All of the government gasoline stations eventually were closed and gasoline was available only from roadside dealers whose operations consisted of a car parked with a plastic can of gasoline sitting on the hood. The market price was the equivalent of $8 per gallon. Most car owners gave up driving and relied on public transportation. But the Belgrade transit authority (GSP) did not have the funds necessary for keeping its fleet of 1,200 buses operating. Instead, it ran fewer than 500 buses. These were overcrowded and the ticket collectors could not get aboard to collect fares. Thus, GSP could not collect fares even though it was desperately short of funds."
Price controls led to producers stopping production. In October 1993, an amazing 200 years to the month from the October 1793 execution of Marie Antoinette for treason (she had urged Austrian intervention) the bakers in Belgrade stopped making bread. The slaughterhouses refused to sell meat to the state stores. Stores began to close down rather than sell at government mandated prices. The government refused to sell fuel to farmers for harvests and planting. The farmers refused to sell to the government at controlled prices. The government retaliated by using some of its scarce hard currency to import food, selling it in state stores at the unworkable controlled prices.
Another government edict required stores to file papers every time they raised a price. Lyon reports, "Many of the store employees had to devote their time to filling out these government forms. Instead of curbing inflation, this policy actually increased inflation because the stores tended to increase prices by a bigger jump so that they would not have to file forms for another price increase so soon."
Faced with these terrible conditions the government did what governments always do. They changed the printing plates to a new design and struck six zeroes from their money in October 1993. We're reminded by Doug Casey's International Speculator that Turkey did this trick a few weeks back.
To conserve its scarce currency resources, the government postponed turning on the heat in state-run apartment buildings in which much of the population lived. November of 1993 was not an especially warm month in Belgrade. Lyon writes, "The residents reacted to this withholding of heat by using electrical space heaters which were inefficient and overloaded the electrical system. The government power company then had to order blackouts to conserve electricity."
Those on fixed incomes are always hardest hit. Of course, the government set the level of pensions. Pensions were paid at the post offices, but there were never enough funds to pay all the pensioners. So, the pensioners, having little more important to do, would line up to collect their pensions. A post office would run out of state funds, but rather than closing its window, the employees would take in money from someone mailing a letter or package, and use that money to pay the next pensioner in line. Very compassionate. (People seem to find it easy to have compassion with other people's money.) Of course, the rate of inflation was so high that pensioners dared not go home and come back the next day. "So they waited in line knowing that the value of their pension payment was decreasing with each minute," writes Lyon.
Some figures on the inflation. The new dinars were each a million old dinars. The exchange rate on 12 November 1993 was one Deutschmark to 1 million new dinars. By 29 December 1993, the exchange rate was 1 Deutschmark to 950 billion new dinars. On 4 January 1994, the exchange rate was 1 Deutschmark to 6 trillion dinars. So, since everyone was using it in commerce anyway, the government declared the Deutschmark to be an official currency of Yugoslavia. They also announced a new, new dinar, only months after the last. This time, taking no small measures, they struck nine zeroes off their money. A new new dinar would be a billion old new dinars. The temporary exchange rate was 1 Deutschmark to 6,000 new new dinars on 6 January 1994 when the new currency came out. By 19 January 1994 the exchange rate was 1 Deutschmark to 10 million new new dinars.
Lyon relates a charming story. The telephone bills for the government phone monopoly were paid to the postmen. "One postman found that after trying to collect on 780 phone bills he got nothing, so the next day he stayed home and paid all of the phone bills himself for the equivalent of a few American pennies."
Government maniacs do not know shame. Having issued new dinars in October 1993 and new new dinars on 6 January 1994, the government introduced the "super dinar" on 24 January 1994. Each super dinar was equal to 10 million new new dinars, so they struck seven zeroes off the money. Lyon reports the official explanation for hyperinflation: "hyperinflation occurred because of the unjustly implemented sanctions against the Serbian people and state." Riiiight.
Misery, poverty, and bloodbaths. These seem to attend every instance of fiat money inflation.
In other free market money news, there is much rejoicing this day. We've been paid an advance on royalties for a new book on digital gold. More on this event to follow. Also today, we received an invitation to speak at this year's Eris Society conference, their silver anniversary event.
Here's how the stocks we presently suggest in this area look right now (as of Friday, 18 March 2005, 13:00 PST):
Western Prospector has already doubled from our first suggestion at C$1.74.
Today, 18 March 2005, we received their press release detailing their proposal to raise C$20 million in a brokered private placement offering of common shares. The dilution would be 5.8 million common shares at C$3.45 per share. The offering is to close on 7 April 2005. Obviously, the stock has not been severely depressed on this news. Co-lead agents for the offering are National Bank Financial and Haywood Securities. They split cash equal to six percent (or C$600K each) plus warrants for 6% of the shares sold under the offering at C$4 per share good for 12 months from closing. So, the agents are clearly positive on this stock. The company asserts this dilution would be the only dilution needed to finance their Saddle Hills through completion of preliminary feasibility. The press release then reviews their uranium project at Saddle Hills, including the info that Gurvanbulag was previously readied for production (we gather by its previous owners, during low uranium prices).
Note that Lumina has nearly doubled from our first suggestion at $4.64. It's a nice one, no doubt about it.
Free Market Money
There's been a lot of action on the metals this week. The following prices are for close of 18 March 2005.
Gold closed at $438.80/oz today. It was a good week to be negotiating a book deal to be paid in digital gold. Gold was over $445 last weekend, and has come down to "fill in the gap" this week. Tuesday it ran back up to test $443, got smashed down. It ran up Wednesday to scurry along at $443 and change through to Thursday's London open, then got smashed in New York to close at $438.10. Today it wandered down in London and up in New York. So, unless there is some dramatic news about the end of deficit spending and the revitalization of American trade and commerce, expect gold to continue up toward its upper channel marker. We think that's getting close to $495 now. Various pundits we follow such as Jim Sinclair and Dennis Wheeler have suggested $526 or $500 gold on this leg up.
Silver closed at $7.35 today, also filling in the gap.
The big news was copper, closing at $1.544 per pound. That's a new high for copper, which has briefly touched $1.55 late this morning. The pre-1982 pennies have a 2.75% premium for their metal content over their face value. (The nickel, at least those before the 2004 re-design, is two-thirds face value for the metal, and closing on unity.)
Uranium is unchanged $21.75 per pound for U3O8. We're informed by two corroborating sources that forward contracts are now selling at $27/pound.
The three stocks we've suggested in this sector are PVH, GBH, and MCG. MCG is up a bit, GBH unchanged, PVH down a tiny bit.
"Pointing out the success of last year's $10 million private X-Prize and the recently announced and privately funded $50 million America's Space Prize for the first commercial passenger carrying spaceship, the Foundation thinks the government is being too timid."
The Space Frontier Foundation wants Congress to spend $200 million of funds stolen from taxpayers on space prizes. They complain that the $34 million allocated for "Centennial Prize" funds should be greater, and that the prize commission is susceptible to corrupt influences. (Keep in mind that these guys organized a tiny "cheap access to space prize" with some of Walt Anderson's money and couldn't find anyone willing to attempt the suborbital launch within their scope of time.)
"The group is also hoping to avoid conflicts that might arise if the prize-giving entity remains with NASA, which has many vested interests in areas where prizes might best be applied. For example, one often cited prize would be for the development of a comfortable, rugged, and easy to use glove for astronaut space suits. In this case, NASA has personnel already working on space suit development with multi-million dollar contractors, who have strong ties to various NASA centers and programs, which might cause biases to creep into the prize process."
Gee, ya think? So, Space Frontier Foundation HMFIC Rick Tumlinson says the prize team should be isolated from the rest of NASA or moved to "somewhere else in our government, for its own good."
We disagree. We believe that NASA is corrupt, certainly, and also vicious, a killer, negligent, and frequently violent toward entrepreneurs. So, rather than increase its budget for space prizes, in competition with the existing successful prizes funded in the private sector, we think NASA should be disbanded. NASA should be destroyed, now, before it does more harm. NASA's field centers should be shut down, its workers fired, its budget allocated to tax refunds, its equipment auctioned off, its technology made available to the highest bidders, its space shuttles sent to private museums, its management put on trial for negligent homicide, and their pensions revoked to pay reparations to the families of their victims.
Since that won't happen, NASA's budget should be kept as small as possible. The things that make private sector space prizes work should not be applied to the government sector. Stolen money is not the proper basis for prize giveaways. As we see in the case of Walt Anderson, not everyone is willing to pay the IRS whatever the IRS thinks they owe. Notice that our approach to keep space prizes private neatly circumvents the problem of corruption in the prize process at NASA. NASA delenda est.
Here's how things stand for the stock we suggested in this sector:
SpaceDev is at $1.67. It is up $0.17 since we first suggested it.
"He told me their first spacecraft is going to carry three people up to the edge of space and back. But ultimately, his thing is space colonization."
Jeff Bezos is building a space port in West Texas. Bezos is 41 and was accompanied by Rob Meyerson on this trip. Bezos is a billionaire thanks to his very successful Amazon.com web site. Meyerson manages Blue Origin. Previously, Meyerson worked on the shuttle emergency return vehicle project and as an aerodynamics engineer developing the shuttle's parachute system for landings. (That's a drag chute for help in slowing the vehicle on the runway, not a vertical landing chute.)
Bezos is apparently planning to build some basic structures at the 165,000-acre ranch he bought, including an engine test stand, fuel tanks, water tanks, and an office complex. Flight tests would start in six to seven years. Research and development is expected to proceed in Seattle, where Bezos lives and his companies are based.
Bruce Hicks, a company spokesman in Houston, Texas says the project "won't go anywhere any time soon." His news release and company fact sheet says that Blue Origin's mission is to "facilitate an enduring human presence in space." Bezos apparently attended elementary school in Houston for three years while his stepfather was an engineer at Exxon.
Other Texas connections abound. Elon Musk's SpaceX is testing its rockets in McGregor, Texas near Fort Hood. John Carmack's Armadillo Aerospace is developing its own launch vehicle, even though now out of the running for the X-Prize.
Meanwhile, back at the ranch, the Bezos property near Van Horn has been posted. No trespassing signs are now up about every mile along the barb wire fence along Texas Highway 54.
In other launch news this week, we understand that Scaled Composites is expanding. Rutan's company has bought a large hangar and is now hiring additional personnel. Among other major projects, they have designed and should soon start building the Virgin Galactic spaceships to carry six to nine passengers per trip into suborbital space. Meanwhile, on 24 March 2005, Richard Branson is expected to zoom in spectacularly to a press conference to announce the winner of Volvo's "trip into space" prize giveaway.
New Country Developments
"Eighteen X-55 cruise missiles were smuggled out of the country in 2001."
Ukraine's new pro-West government has announced today that their predecessors allowed (or failed to prevent) the export of 18 cruise missiles to Iran. The X-55 cruise missile has a range of 1,800 miles. Thus, it could reach Israel, Turkey, much of India, and all of the Persian Gulf. No nuclear warheads were exported, it seems.
This news should make the anticipated June 2005 attack on Iran by USA military forces somewhat different. Aegis anti-missile cruisers would be deployed, but even so the USA could lose an aircraft carrier if Iran counterstrikes with several of these cruise missiles.
In other news today, the Pentagon published two documents outlining their strategy for winning the war on terrorism and preparing for future conflicts. We wonder what basis they have for declaring on the front page of the new "National Defense Strategy" that "America is a nation at war." The strategy seems to include various forms of extortion and bribery for nations that might support terrorists or freedom fighters.
These news events are not about new countries, but they do relate to overall trends of Balkanization, imperial excess, and the development of new nuclear nations. As TE Lawrence once said, "It's going to be fun!"
"Something that executives should seriously ponder: does their death add to shareholder value? Death does not add to shareholder value, so executives should make meaningful efforts not to die."
BK Adams, EM Ferstl, and MC Davis, along with others, have published "Synthesis and biological evaluation of novel curcumin analogs as anti-cancer and anti-angiogenesis agents," in Bioorganic Medical Chemistry 15 July 2004. We've written here previously on the subject of curcumin, the compound in turmeric which makes yellow mustard yellow. Curcumin has anti-cancer, anti-inflammatory, anti-oxidant, and now anti-angiogenesis properties. It may reduce the risk of cancer, heart disease, and Alzheimer's.
Adams, Ferstl, and Davis are Emory University researchers in Atlanta who report on lab tests performed at the National Cancer Institute. These tests covered a dozen artificially synthesized curcumin analogs, of which nine showed "a moderate degree of anti-cancer activity." Three of the new curcumin derivatives showed "a high degree of cytotoxicity." These same analogs inhibited the growth of tumor cells better than cisplatin, which is a common chemotherapy drug.
Angiogenesis is the process by which tumors stimulate the body to provide blood vessels to bring nutrients to the tumor. Eliminate these vessels, or slow their formation, and you strangle the tumor. The Emory tests showed eight of the compounds exhibited a "high degree" of anti-cancer activity including limiting or preventing angiogenesis.
More results on the Rotterdam Study were reported in Nutrition in November 2004. The researchers are JM Geleijnse, C Vermeer, DE Grobbee, and others. The report is, "Dietary intake of menaquinone is associated with a reduced risk of coronary heart disease: the Rotterdam Study." As you might guess from their names, the researchers are Dutch. The vitamin is also called vitamin K2. They sought to establish that vitamin K deficiency increases calcification of atherosclerotic lesions, increasing the risk of heart disease. The data was obtained in the Rotterdam Study of 4,983 men and women aged 55 and up who were enrolled in the study from 1990 to 1993. The present review analyzed the dietary data of 4,807 participants with no history of heart attack and followed them through 2000.
Vitamin K1 is phylloquinone; K2 is manquinone. Both were associated with beneficial high-density lipoprotein, only K2 is correlated with decreased total cholesterol. High intake of K2 reduced fata and non-fatal heart attacks, sudden cardiac deaths, and other forms of ischemic heart disease. Mortality from both coronary heart disease and all causes was significantly less for those with the highest vitamin K levels. High K2 intake correlated to decreased severe aortic calcification. Higher levels of vitamin K seem to protect against coronary heart disease in elderly adults without increasing the risk of death from other causes.
We mentioned Alteon three weeks ago. We continue to research this company. Its price is down to $0.60 this week. At this time, we are not suggesting Alteon. In February 2005, they stopped enrolling new patients in their clinical trial of alagebrium, their lead product. It appears that their senior vice president of scientific affairs, Robert C. deGroof resigned in August 2004. He continued as a consultant to the company, but has not been replaced. In other words, it appears that there is a finance team now in charge. We're unclear how this team should result in significant scientific advances - their sale of sundry lab equipment is not a good indication. The main plus on the ledger is that the stock is at a very low price. However, purchasing it as it heads lower is not prudent. If you remain interested in Alteon and the drugs it is testing, we suggest you follow it until it bottoms, then buy on the way up. Of course, it may not bottom, and may reorganize or be absorbed into another company, or simply fold.
Having dispensed with Alteon, we'll try to focus some attention on Elan Pharmaceuticals next week.
Publication Note: For the last several days, we've been experiencing server trouble. It looks like Indomitus.net is back online today. We've not done more than a cursory check of web pages, though.
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