2004 Issues #1 to #16
Seventeenth Issue 10 January 2005
B M GM FMM S LT N L P
Twenty-eighth Issue 11 April 2005
Buy this essay and others in Jim's new book Being Sovereign.
The Indomitus Report
6 June 2005
"Liberty is impossible without secure private property."
There was another quote on the same page of Jim Blanchard's Golden Insights but it just wasn't right. John Dickinson, like many other politicians, simply didn't know when to shut up. He wrote in October 1765 for the resolutions of the Stamp Act Congress that, "It is inseparably essential to the freedom of a people that no taxes be imposed on them but with their own consent, given personally or by their representatives."
Now, see where he went wrong? He just kept on and on, blathering. Here was a chance to stop at "given personally." Great. Personal endorsement before a nickel in tax money can be collected. Without the personal approval of the tax payer, it isn't consensual. Without consent, it isn't freedom but tyranny. Fabulous.
But, really, he should have stopped much sooner. "It is inseparably essential to the freedom of a people that no taxes be imposed on them." There. Isn't that better?
We're reminded of taxes because good old Eamonn Butler has penned a note to remind us that "tax freedom day" for the United Kingdom came on the 31st of May. Excellent. Mind you, we doubt it.
After all, the taxes involved in the UK are not just "Inland Revenue" income taxes, but also value added taxes and petrol taxes and the like. People don't really stop paying taxes until they stop buying things. Nobody really knows how much shopping they'll get done, how much found money will show up in their pockets, how many chances they'll have to put a bit more in the hands of the state.
A similar calculation for the USA would have to consider state sales taxes, fuel taxes, taxes on telephone service, Internet service providers, cigarettes, alcohol, firearms, any number of things. Really, there are so many licenses, fees, taxes, and such that it is impossible to say when "tax freedom day" might be.
Tax freedom day is the day you stop paying taxes. Maybe that day never comes, for you. Or maybe that day is every day. Perhaps if you are paying any taxes, you are paying too much.
In any event, there is no secure private property without freedom from taxation. Unless governments are bound down with chains and thwarted from their pernicious desire to steal everything in sight, they will simply take all that you own, create, or buy.
Remember that we don't have to put our hands on the tyrant to bring him down. Just stop holding him up. Please.
Free Market Money
"The threat of the speedy loss of their whole business if they failed to meet expectations (and how any government organisation would be certain to abuse the opportunity to play with raw material prices!) would provide a much stronger safeguard than any that could be devised against a government monopoly. Competition would certainly prove a more effective constraint, forcing the issuing institutions to keep the value of their currency constant (in terms of a stated collection of commodities), than would any obligation to redeem the currency in those commodities (or in gold)."
Refined: An Analysis of the Theory and Practice
of Concurrent Currencies, 3rd Edition, 1990
Well, there you have it. Thirty years ago, Hayek predicted that the governments would play with the price of gold. Amazing man.
So, who keeps their currency constant in terms of a stated collection of commodities? Well, in 1972 the Schumacher Society, Robert Swann, and Ralph Borsodi created something called "the Constant," which was a currency they established to remain constant in value against a basket of commodities. An intriguing form of free market money, indeed, and with a New Hampshire connection, we gather.
Of course, nobody has heard of the Constant except perhaps Bernard von NotHaus and a few other rare monetary architects. Why not? Because of the ingredient missing in Hayek's analysis. Acceptability plays the key role.
Sure, as he points out, it would be cheaper to simply issue a currency and keep it constant in terms of various commodity prices. Lots cheaper than paying to store silver and gold. But, who would accept such a currency?
Eventually? Maybe anyone would, eventually. But at first? Nobody. Nobody is going to trust the Schumacher Society or the Schumpeter Society or Joe's Grocery Store and Diner to issue currency. Therefore, any novel, new, intriguing, excellent currency, to be accepted, must have some practical use.
Wal-Mart, Borders, and many other retailers issue gift cards that are like old-fashioned gift certificates. You may spend them like money at the retailer. So, if the retailer has locations where you are, or where you want to send value, great. That works. There's something practical to do with the currency, so you can buy into it. If someone you know likes to go to Bed, Bath & Beyond, and you buy them a gift card, they may be very appreciative.
For a general currency, though, how do you get acceptance? If you don't design for acceptability, nobody is going to accept your currency, perhaps for a long, long time. Then what would you do?
So, redeemability is not just a nice idea. It isn't just an alternative to keeping the value of a free market currency stable in terms of a designated basket of commodities. Redeemability is the basic practical thing you can do with a general currency if none of the stores in your area would accept it. If you can turn the currency into gold or silver, then it has an inherent practical use. So you may feel free to accept it because you know that there is something to do with gold or silver. Gold and silver have always had value, are very likely always going to have value, and represent money to nearly everyone on the planet. So acceptance is widespread.
Really, without acceptance, constancy is just a theoretical construct. What does it mean to keep the value of the money constant if nobody accepts it? The day before someone accepts the money, the value of the commodities in terms of the new money is infinite - no amount is enough to get anyone who has some of the commodities in question to part with any portion of them. The day that person accepts the new money, at some rate, for some set of commodities he's willing to sell, the value of the commodities drops to some finite figure. And, frankly, who knows what happens when more and more people find the currency acceptable. Prices fluctuate.
Gold and silver cut through this problem. The currency provider gains immediate acceptance. People know about gold and silver, know that there is a value to these things, and accept the new money because it has an intrinsic practical use. Moreover, the test of constancy is a complex economic equation, the more so depending on how many commodities are in the basket. The test of redemption is simple. If I follow the process, does gold or silver change hands?
Yes, ultimately, other things are going to be available as free market money. People are free to accept and use anything for money they like. Cigarettes, silk hose, and chocolate have been money in recent decades. People may become used to the idea of valuns or constants and use them, or even issue them. After all, they got used to Ithaca hours - in Ithaca, New York, anyway. But gold and silver have an edge over these other things. They've been money before. They are understood to have value. They've held value pretty well for a few years now. So, the market accepts them as money.
Here's how the stocks we presently suggest in this area look of late (close Tuesday 14 June 2005):
Jim Sinclair, Doug Casey, Gary North, and Bill Bonner were all mentioned in a recent New York Times Magazine essay by Stephen Metcalf. Metcalf is certainly no expert on gold, weight, structure, or much else, judging by his essay. He seems to think that nothing human could hold seven thousand tonnes, because some goofball at the Federal Reserve told him so. We'd advise him to stay off 19th Century bridges like the one from Manhattan to Brooklyn if he believes such drivel.
Metcalf skates on thin ice by saying that the above individuals are either gold speculators, gold hoarders, gold philosophers, or outright nut jobs. Since I'm clearly among the class "outright nut jobs," I can only speculate on which mocking name Metcalf would attribute to each of the above.
Nevertheless Metcalf himself is a bit odd. He seems to think that German sociologist Georg Simmel is "the greatest theorist of money," which gives rather short shrift to Aristophanes, Gresham, von Mises, and Hayek, to name but a few. The nice thing about this essay is that it is entirely conventional, which, amusingly enough, is how Metcalf sees money (as entirely conventional).
The New York Times it would seem, is against gold, hates gold, slanders those who buy it and keep it, and has about as much cleverness in publishing this essay as they did in the 1920s quoting a then-widely-known scientist (whose name has been otherwise completely forgotten by history) that Robert Goddard's dreams of flying rockets to the Moon were impossible because in space a rocket would have nothing "to push against." The Times had to apologize and print a retraction in 1969 when men landed on the Moon. Somehow it seems doubtful they'll come to their senses about this situation on any faster schedule.
Mining companies are sending out press releases quite often these days to announce that there won't be much to announce until Fall. Drilling programs are running full-tilt boogie, and we should be able to update you as results come in. For information on drill schedules, please see the web sites of the mining companies.
Western Prospector mentions their drill schedule in a news release of 16 June 2005. Tan Range mentions their drill program in a release of 9 June 2005. Also, Frank Vogl has said nice things about Jim Sinclair's business ethics in a recent speech.
Free Market Money
Gold climbed back over $436 on Thursday 16 June 2005, gapping upward strongly. Remember that base that was built at $420? It seems to have grown strong enough to build new higher prices upon.
Silver followed suit, topping $7.40 briefly. Last week's $7.50/oz prices seem to have dissipated somewhat.
Copper popped up to $1.62 per pound. Looks like a general disaster for the dollar.
U3O8 seems to be holding at $29/lb.
The three stocks we've suggested in this sector are PVH, GBH, and MCG. Prices from Tuesday 14 June.
Gold Barter Holdings traded briefly over .174 gAu ($2.39 at the time) on 10 June 2005 and has stayed well above its low water mark. Further dividend payments this July should inspire higher prices.
MCG is doing very nicely, with its shares trading at a substantial premium to the underlying stock, TGC of dBourse.com. PVH on the other hand seems stuck with a plentiful supply of sellers and fewer buyers.
"This is the smallest extrasolar planet yet detected and the first of a new class of rocky terrestrial planets. It's like Earth's bigger cousin."
Paul Butler is from the Carnegie Institution in Washington. The report is very exciting news, as the planet in question orbits a star only 15 light years from Earth in the constellation Aquarius. The planet is one of three discovered to orbit the star Gliese 876.
Aquarius is visible at about right ascension 23 hours, declination negative 15 degrees. It may be seen from the South pole to any latitude up to 65 degrees north. As with most Zodiac constellations, you want to look toward the Sun's path in the sky - toward the north if you are in the Southern hemisphere; toward the South if you aren't. Any planetarium software or web site should be able to identify for you the pattern of stars of this constellation.
While you are looking at Aquarius, be sure to check out the three globular clusters visible through any small telescope in that constellation. Both the Saturn Nebula and the Helix Nebula are planetary nebula - formed by the shedding of a ring of plasma from a star - in the Aquarius constellation.
While the newfound planet is the smallest extrasolar planet ever, it is still 7.5 times as large as Earth. The star it orbits is a red dwarf star, about one-third the mass of the Sun. The other two planets known to be orbiting Gliese 876 are gas giants (such as Jupiter). Further investigation may reveal even more planets, around this and other stars, and eventually we may discover another Earth-like world.
SpaceDev is at $1.57. It is up $0.07 since we first suggested it.
"Foam is understood now and ice isn't."
NASA's spokesthing also says, "NASA will be able to determine whether they can safely launch the shuttle only after reviewing an analysis of its debris-impact risks which will be presented on June 24." Gosh, so, why not waste some taxpayer money hauling the shuttle to its launch pad, again, just in case that analysis is a go, huh?
Well, after stealing a new fuel tank from the shuttle Atlantis and the addition of a heater which is, oddly, situated near its top rather than, say, near the shuttle, NASA may, or may not be able to launch Discovery without killing another batch of astronauts. Time will tell.
It seems beyond reason to say that NASA understands foam better than ice. Ice is, after all, simply water that is cold enough to be solid. Rather a lot more experimentation has been done with ice in the last few hundred years than with whatever foam-of-the-month the Michoud facility has been spraying on external tanks, lately.
In other news, a Russian Progress spacecraft took about a tonne of waste from the Internationalist Socialist Space Station and sank in the Pacific ocean about 3,500 miles east of New Zealand. It is unclear from the news source whether the sinking was planned. A replacement Progress should be launched from Tyuratam this week.
In other mysteries-of-NASA-idiocy news, their Pluto mission spacecraft has been shipped to NASA Goddard and should make its way to a launch site in Fall 2005. The launch window that opens 11 January 2006 for 35 days provides for the Atlas V rocket to throw the "New Horizons" spacecraft past the Moon's orbit in just 9 hours, for a slingshot gravity assist from Jupiter in 13 months. The weird part is that the half ton spacecraft reaches the Pluto-Charon system in Summer 2015 about sixteen long years after the duo of planets have passed back outside Neptune's orbit. See, Pluton and Charon were inside Neptune's orbit from 1979 to 1999 - and many missions were proposed. Now that the two are headed further out, their atmospheres are re-freezing and they are becoming much less interesting - just in time for NASA to get around to visiting them.
New Country Developments
"If people spent any time thinking, they'd miss 'American Idol.'"
In Latin, the phrase is pan et circenses or "bread and circuses." To keep people from paying attention to their own enslavement, the clever and innovative folks in government have various programs. With their licensed lap dogs in the media, events like the Downing Street Memo go little reported while a runaway bride is catapulted onto the national scene.
Thinking must be very hard work to judge by how little of it is done by such a large population. If most Americans thought for very long, or very hard, they would likely take steps to eliminate tyranny and oppression. Thus, it is essential for their masters that the American people think as little as possible.
To support this thoughtlessness, two things are essential. First, there must be the hologram or illusion of prosperity. Prosperous people do not "rock the boat," and do not overthrow systems which they associate with their own comfort and well-being. Second, there must be some distractions on which to cogitate. People will think, inevitably, about something. If that something is football, baseball, basketball, hockey, race cars, poker tournaments, celebrity mischief, or the occasional runaway bride, so long as it is not about oppressive laws, corrupt bureau-rats, bloodthirsty politicians, or the traumas of war, it matters not.
The illusion of prosperity is not actual prosperity. It is a façade or veneer of wealth, not very deep, not easily obtained, but sufficient to keep the hamster on the treadmill pushing that wheel around. Beautiful cars, beautiful houses, even beautiful bodies are available for the price of mere debt peonage, wage slavery, and the abandonment of freedom. Americans love their chains.
Except those that do not. Some do not love slavery, are not willing slaves, won't be held captive, resolve their debts, leave their wage earning positions, and set up on their own. Some never were slaves, never held a "real" job, and a few of these don't go for the Alexander-style shaving that was mandated in the Macedonian army 2300+ years ago so that men would learn to obey officers who looked like young men - like the young Alexander. "Get a haircut and get a real job," makes no sense to some few.
Over the years, entrepreneurs and determined individuals have formed projects, like the Atlantis Project of Werner Stieffel, or that of Eric Klien. A New Country Foundation and a Libertarian Nation Foundation have been organized, as have free market networks, an International Society for Individual Liberty and a few free state projects.
Recently, I spent time in Wyoming with the Free State Wyoming jamboree. Why Wyoming? Well, it has an existing culture of freedom. Open carry is lawful in Wyoming. People carry quite often, in bars, grocery stores, restaurants, to and from their ranches, as they please. It is much easier to support and extend a culture of freedom than it is to create one out of whole cloth.
Wyoming has a low population. So, freedom enthusiasts who still feel compelled to vote may be more influential in rural counties in Wyoming such as Crook, Weston, or Hot Springs, than they would be in crowded counties in the east. Wyoming also has a business-friendly environment with comparatively few regulations and an attitude opposing bureaucratic ineptitude and legislative stupidity - not that it is exempt from these problems.
Great empires always fall apart. Balkanization is a trend that has been going on for many decades, and it is a friendly trend. Large empires have broken up into commonwealths, old countries have split off and re-established their sovereignty, and native clans and tribes are asserting their aboriginal sovereignty. Already, the British empire of the 19th Century is gone.
In its place are a number of English-speaking countries. One of the larger of these geographically is Canada. Of course, Canada is also a French-speaking country. Settled by colonists from both France and England, Canada became formally British in the after-math of the Seven Years War which ended in 1763 with the defeat of French forces. British soldiers brutally ousted many French settlers from their homes thereafter, inspiring a great migration to Cajun country in Louisiana.
Canada is not a coherent country with broad cultural forces promoting unity. Rather, it is a hodge-podge of Western and eastern interests, an agglomeration of numerous native or "First Nations" peoples as they prefer to be called, and its central government attempts to be socialistic and environmentalist without any broad base of industry. Francophone and Anglophone interests are not unified, the Maritime provinces in the far east have their own difficulties, and the Western provinces have substantially different interests from Ottawa. Even within eastern provinces such as Ontario and Québec, population centers are exclusively in the South, with vast northern regions populated mostly by First Nations natives, and wealthy in natural resources of all kinds (timber, minerals, oil, natural gas, fish, game).
Canada has no treaties with the Coast Salish peoples, and Britain never did. Thus, there is an ongoing "treaty process," through which many of the First Nations clans and tribes are asserting their sovereignty. When Canada splits, and split she shall, dozens of new countries are likely to form.
Canada already has provincial separatist groups in Québec, Alberta, and British Columbia. In the far north, the Nunavut are already recognized on contemporary maps as separate from the "northwest territories." As Canada splits up, some of those fracture zones are likely to propagate across the borders into Alaska and the northWest states of the USA, according to author Ken Royce of Free State Wyoming.
So, what's the objective of Free State Wyoming? One of the key ingredients is for "those who formally reject fraud, theft, and aggression as political and social expedients, and who desire to relocate to Wyoming as good neighbors for the peaceable goals of political liberty, free trade, and voluntary cooperation" to move there. Those who honor their agreements, work hard, leave their neighbors alone, and make at least some effort to get along should consider locating near each other.
As empires falter, sway, and begin to topple, the rulers inevitably turn up the heat. They become repressive and brutal in an effort to remain in control. They seek out all opposition and make examples of those they can find. In this process, cities are a poor choice for liberty. After all, power moves from the provinces into the cities. Cities rarely supply their own food, power, or water. Most cities have a few days of food on hand, a few battery-operated devices per person, and little stored water.
Cities do have populations, to be compelled, enslaved, taught lessons, used as examples to deter others. What is a nuclear-capable empire likely to do in the event that loss of control seems inevitable? What body count could possibly be too high for a government that has nuked civilian population centers in Japan and tested nuclear weapon fall-out on population centers in the USA? While the evidence isn't conclusive, it is beginning to accumulate in support of theories that the Oklahoma City federal building was bombed by forces within the government, that World Trade Center Seven was (by the published admission of its owner) deliberately demolished, and that the Twin Towers could not have fallen as they did without demolition charges being used.
Follow the money. Who had the resources to create and fund the al Qaeda network in the first place? Clearly, this quasi-governmental organization (quango) was formed by the CIA and other intelligence agences in the 1979-1989 war in Afghanistan. Who gained the most resources from the popular story that al Qaeda operatives stole four planes and killed thousands of Americans, mostly civilians on 11 September 2001? The defense department and intelligence agencies, foreign and domestic. Who let these events transpire? The FAA has documented careful wanding inspections of several of the hijackers at the airports, yet admits that known terrorists were allowed to fly. The Downing Street Memo attests to the fact that the Bush administration was dead set on war with Iraq in spite of no connection to the terror attacks of 2001 and in spite of knowing that there were no weapons of mass destruction in Iraq.
To Machiavelli, it would all be terribly clear. What is needed to distract people from a corrupt government at home? A foreign war that may be won. What target is easier than the poorest nation on Earth, Afghanistan? Perhaps the nation that has been subjugated for twelve years by sanctions and kept from flying any aircraft by British and American air force operations? A quick victory solidified support behind Bush. Of course, that victory led to no triumphal exit, but an ongoing occupation.
These are not clever men and women who seek to rule the world, steal your wealth, and bind you into slavery. They are certainly vicious, brutal, and evil, but not especially clever. They won't be able to hold onto power. They would, however, very likely assert that terrorists had gotten ahold of a nuclear weapon and they would very likely detonate a nuclear device in a major American city for the sake of grabbing more power. After all, they obliterated the lives of seven dozen Texans in a church in 1993. They very likely blew up a federal building in Oklahoma in 1995 to limit the inquiry into the events at Waco and eliminate all popular support for the militia movement then extant. They may have been responsible for many of the deaths at the World Trade Center in 1993 and 2001, and they are undoubtedly behind the cruel sanctions and war in Iraq that have killed hundreds of thousands. These are not nice people, and trusting them to behave pleasantly as their power slips through their fingers like water in a fist is not sensible.
Activities like Free State Wyoming represent an opportunity to move out of the cities, into the provinces, without losing sight of opportunities in business, technology, and social relationships. Groups like FSW may become mutual aid societies during the troubling times ahead. I'll continue to investigate and report on these groups as I encounter them.
Meanwhile, consider the news on Staff Sergeant Alberto B. Martinez as evidence that history repeats - for those who refuse to learn its lessons.
"We know that it works, and we know why it works. In any rational regulatory environment, that would be reason to speed Provenge to market. But, this is the FDA we are talking about."
Men with metastatic prostate cancer who received an immune-boosting vaccine called Provenge were eight times more likely to live six months without disease progression than those fed a placebo. The company with this impressive drug is Dendreon, currently $5.32/share. However, its drug is only effective in a subset of patients, those with less aggressive prostate cancer.
Thus, the FDA refused to accept the study results. The fascists at the FDA have a rule against allowing retrospective analysis of a subgroup that may have benefited from an experimental drug. This sort of rule keeps many useful drugs off the market, is helpful to the high barriers to entry the FDA imposes for the benefit of their major pharmaceutical company masters, and kills many thousands who would benefit from useful medicines every year, something the FDA loves because all government agencies are about hate, death, and poverty.
Dendreon followed patients in the original study anyway. Of those with less aggressive cancer, some 75 patients, those receiving the Provenge treatment were 3.7 times more likely to be alive after 30 months. Or, 53% of the Provenge group were alive compared to only 14% of the placebo group. The Provenge group also remained pain-free twice as long. (It is widely known that FDA policy makers have a secret fetish to cause as much pain and suffering as possible.)
A new clinical study on Provenge shows three times as many advanced prostate cancer patients who received Provenge were alive compared to those receiving a placebo. A recent Life Extension essay on the subject suggests that given 30,000 American deaths per year from prostate cancer and a possible 2002 approval by the FDA, their delay in approving this one drug may have resulted in the premature death of tens of thousands of men.
When tried and convicted, these FDA butchers should perhaps be slowly tortured to death, with hot wires inserted rectally and the like, to coincide with the types of death they have inflicted on the public. Authoritarian scum should be prosecuted beyond the full extent of the law.
Meanwhile, doctors Wong, Jiang, Fyrst, Saba, and Ames of the National Academy of Sciences have reported that gamma tocopherol and mixed tocopherol Vitamin E supplements help kill prostate cancer cells. The study, conducted at Children's Hospital Oakland Research Institute in California, showed that adding gamma tocopherol to prostate cancer cell cultures not only inhibited cell proliferation, but caused cell death. The mechanism appears to relate to interrupting sphingolipid synthesis.
Alpha tocopherol is one of eight structurally similar forms of the vitamin E family which are all potent antioxidants. While it is also the most abundant in the body and in nutritional supplements, it actually suppresses gamma tocopherol levels in the body. High gamma supplements are available from groups like Life Extension, and may now be found at the vitamin aisle in Wal-Mart. Delightfully, the Wal-Mart available supplement is also high in delta tocopherol, which, in combination with gamma tocopherol was even more potent in killing off prostate cancer cells. The two forms of vitamin E produced cell death in hormone sensitive prostate cancer cells.
Ultimately, we are making a strong suggestion that all prostate cancer sufferers, and all with any family history of hormone sensitive prostate cancer evaluate the information available on mixed tocopherols. Please consider the value to your health of a mixed tocopherols supplement.
Elan Corp, PLC, was at $6.72 when we looked in on it Tuesday 14 June 2005.
Publication Note: This issue is late, and should have been released prior to our travels. Fortunately, there was a break for the travel to the Wyoming jamboree. Unfortunately, we weren't able to support the conference in Vancouver. Perhaps next year.
Copyright © 2005 Free West Trust, All Rights Reserved.