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

The Indomitus Report
Volume 2, #29

16 September 2005
Forty-five!

Being Sovereign

      "The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can't get and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time is made good by looting A to satisfy B. In other words, government is a broker in pillage, and every election is sort of an advance auction sale of stolen goods."

      - H.L. Mencken

Apparently, someone in the Bush Administration figured that the difficult process of responding to emergencies would never arise, and therefore the directorship of the unconstitutional agency FEMA has become a patronage giveaway. Or, it was until Jon Stewart played video of Bush saying, "Brownie, you're doin' a heck of a job."

Stewart must have been stepping on a hot spike or something, because he then delivered, "Blackie, I've seen ya looking better," without cracking a grin. Followed by mock-Bush laughter. Brilliant.

If the aftermath of hurricane Katrina seems horrifying, if the suffering looks intense, if it seems everything not destroyed was damaged, the one shining thread in this disaster, the burnished silver lining in this terrible storm cloud is the obvious failure of government. Leading up to Bush's speech on the Ides of September, Ted Koppel narrated an ABC News special report, "System Failure." Even the mainstream media are beginning to twig to the fact that the government is incompetent.

Let me take exception to Mencken's first line. The government, at any given level, certainly consists of a gang. Some men, some women, but all gangsters. We live in more enlightened times when women are not discriminated against in tasks relating to gangsterism. Mind you, calling these goofs in government a gang is demeaning to gangsters everywhere who often provide useful products and services. The historical character of government, however, has always been a group that defrauded and brutalized others for the sake of enslaving the productive.

But are they "exactly like you and me"? How rude. No, of course not. You are better than the men and women in government. Those in government include tax takers who steal money, extort it, or defraud others for it. They also include those who accept stolen money as pay and for the budgets they administer. Being in government they accept and prefer the use of force for aggressive and coercive purposes. They produce nothing of value, but only convert the production of others to some purpose they insist must be accomplished. You are, of course, better than such people.

By and large, such people have no special talent. It is not only that they have no special talent for the business of government. They also have no special talent for business, for math, for ethics, for language, for literature, for art, for integrity, for reason, for leadership, nor for action. Those in government bureaucracies and positions of political power are mediocre. If they were actually good at anything, they'd be pursuing a career in that activity. Thus, brilliant actors like Alec Guinness or Tom Hanks are not seen running for public office, but mediocre ones like Reagan or Schwarzenegger are.

What are mediocre people good for? Well, perhaps not much, but there are some things they are good at. As Mencken points out, they are good at getting and holding office. This skill consists of two basic approaches. The one approach is to get office by being elected, then hold office by being re-elected. The other approach is to get office by being appointed or hired.

Mind you, on the election front, those in government have had to resort to increasing levels of patently offensive control on free speech, campaign contributions, public advocacy, peaceable assemblies, and election fraud in order to maintain their power. It is now practically impossible to finance a successful campaign to overturn an incumbent. In 2004, only five incumbent Congresscritters lost to challengers; in 2002, only four incumbents lost to challengers; only ten of 435 races were won by margins of less than five percent. (Source:FairVote). In 2000, one of the rare losses by an incumbent Senator was the hated slime John Ashcroft losing to a very popular, very dead former governor.

It has never been especially hard to retain appointed office. All the bureau-rat has to do is follow the bureaucratic imperative: seek more budget and more staff. Wherever there is a problem, fail to resolve it, and use its difficulties to demand more budget and more staff. Never leave a budget dollar on the table. Always find something to spend all your budget upon, so as to be able to demand more next cycle. Such are bureau-rats.

Groups that pant and pine for something they cannot get are widespread. The ones who tend to get what they want, even from government, are the ones that have power and influence. For example, people who qualify for Social Security retirement "benefits" tend to be wealthier and have higher average annual incomes than those who pay Social Security "taxes." Isn't that fun? A program to forcibly extract wealth from those who produce it and make less of it to turn over to those who have retired from actively producing wealth and both have and (through passive investments) make more.

Most of the promises are, of course, meaningless and worthless. Consider the promises of safety and security for city dwellers in New Orleans. Denizens of that city were promised effective flood control by lying filthy graft mongers in their city, parish, and state governments. The USA Army Corps of Engineers lied about their ability to control flood waters from Lake Pontchartrain. Hundreds are now dead who relied upon those empty promises.

Keep in mind that the known cost in Spring 2004 to fix or upgrade the levees and canals in New Orleans was approximately $100 million, of which the Bush Administration allocated $42 million or so. The rest of the money was apparently diverted to the war in Iraq or other graft and corruption. Alaska got federal funds to build a bridge to an island with zero resident population, so we can all be glad about that graft. No doubt one of the reasons New Orleans wasn't able to complete its work on the levees and canals in 2004 was because a high percentage of the money allocated had to be distributed as graft.

Where do tax dollars come from? The experiences of Vernie Kuglin and Joe Banister illustrate that the government has no authority to require the withholding of income tax nor payroll taxes. There is no law obligating any American to pay these taxes, with few exceptions - those living in territories such as Puerto Rico or the District of Columbia, in certain instances where their situations involve actual tax obligations as defined by the law. Most people who file tax paperwork and pay taxes have no actual tax obligation; not only do they owe no tax, they have no obligation to file. Yet, every year, the 15th of April 1861 is commemorated with this customary filling in forms and submitting gifts of money to surly and incompetent postal clerks.

Who clamors for things from government? Curiously, it seems mostly to be people who have been, well, screwed over by, gosh, what a surprise, the government. Space enthusiasts pant and pine for more money for NASA which has completely screwed them out of any chance of ever flying in space. Environmentalists pant and pine for more money for the Environmental Protection Agency, National Forest Service, National Wildlife Service, and National Park Service (four agencies which do not, as I understand the text, have a shred of authorization within any article or amendment of the constitution) while simultaneously decrying the horrid failures of these agencies at doing anything even vaguely resembling protection of the environment. Farmers, to offer another example, pant and pine for more money for agriculture programs and subsidies while identifying endless fraud and abuse in Department of Agriculture activities. Veterans are, to my knowledge, very nearly universally afraid of being committed to Veterans Administration hospitals where doctors seem to practice experimental surgery and random acts of amputation, but faithfully write their Congresscritters to demand more money for veteran-related programs. Elderly people seem to have an endless supply of stories about elderly people screwed over by the government and, through their enthusiastic memberships in groups like AARP seem determined to see more money thrust at programs for the elderly.

So, although the people who run the government are mediocre at best and despicable at worst, it is no surprise that the government functions the way it does. There is no way to satisfy the numerous disparate interest groups. The only question that remains is which group is going to suffer more today.

There are generally a few useful clues available, some of them quite obvious. Defense contractors, government agencies, bureau-rats, and those with corrupt connections to the highest levels of government are going to get fatter and more arrogant. Those who pay taxes are going to get thinner and more annoyed.

On the horizon, not far away, is a fantastic new possibility. There is an opportunity approaching to do business transactions entirely free from the oversight of any government. New systems are being developed to move value and activity beyond the state, so that productive people aren't forced to support their erstwhile slave masters. I hope to write more specifics about these systems in the near future.

Free Market Money

      "The rate of interest, like any other price, ought to record the aggregate effects of thousands of circumstances affecting the demand for and supply of loans which cannot possibly be known to any one agency.... The whole idea that the rate of interest ought to be used as an instrument of policy is entirely mistaken, since only competition in a free market can take account of all the circumstances which ought to be taken account of in the determination of the rate of interest."

      - F.A. Hayek, Denationalisation of Money - The Argument
      Refined: An Analysis of the Theory and Practice
      of Concurrent Currencies
      , 3rd Edition, 1990

Monetary policy is a fraud. The notion that central bankers have even a modicum of the information necessary to set interest rates intelligently is unsupportable. There is no hypothesis here, there is no supporting evidence, there is only a bizarre notion and determination.

The bizarre notion is that some committee could possibly have enough information at its disposal and be provided with adequate analytical tools to identify an interest rate appropriate to three hundred million free enterprisers and their overseas business associates. The determination is the usual one: those who have a bit of power are determined to hold onto it and exert influence with it, despite endless evidence that their behavior is destructive, their results harmful, their thwarting of free enterprise dangerous, and their ideology evil.

It would be desirable to develop a parallel economy where interest rates were found by free enterprise mechanisms, where free people would engage in profit making enterprises, including lending money at interest or paying interest on deposits without let or hindrance. If such an economy did not already exist, it would be necessary to invent it.

Fortunately, there already exist many essential elements of such a system. There are alternative currencies, many of them now based on gold or silver, there are alternative exchanges such as PVCSE.com, there have been companies which have reliably paid on corporate bonds, and new techniques are being developed to extend upon these systems. Indeed, one correspondent recently described a prospective system which would not compete with the digital gold revolution "but complete it."

It won't be necessary to lay hands upon the fiends of the Federal Reserve. They are making abundantly clear to everyone their inability to effectively "manage" the global economy. There would more than likely be a plentiful supply of volunteers in the next few decades to seek out these vile men and women and remove them, but, it may yet be that an alternative system would be in place before the old system collapses. Transitions are rarely easy or painless, but there is some promise now of such a possibility.

We'll continue our focus on Denationalisation next week.

Gold Mining

Here's how the stocks we presently suggest in this area look of late (Friday 16 September 2005):

Company Symbol C$ US$
D
Exploring
Almaden AMM.TO 1.98 -
C$0.24
Free Gold ITF.TO 0.135 0.126
-C$0.145
Luzon LZN.V 0.115 -
-C$0.175
Pinnacle PNL.V 1.23 -
C$0.60
Western WNP.V 5.00 -
C$3.26
Holding
Lumina Resources LUR.to 0.37
-C$0.38
Northern Peru Copper NOC.to 1.72
-C$0.18
Regalito Copper RLO - 5.90
$1.00
Silver Standard SSRI - 13.54
$0.76
Vista VGZ.TO 4.94 -
- C$0.06
Mining
Apex Silver SIL - 17.20
$4.65
Newmont Mining NEM - 46.21
$2.91
Northgate NXG - 1.21
- 0.44
Tan Range TRE 3.19 2.73
C$2.19

First, the good news. Tan Range has hit a triple for us. It is now up to 319% from our original suggestion (C$1). It joins Lumina Copper (now Regalito and others) on our list of triples.

Western Prospector's price is 284% of our initial suggestion, so it appears well on its way to triple status, as well.

Pinnacle, our most recent entry in the exploration set, hit a double for us and settled back. It now is coming close to double the initial suggested value (C$0.63) again. Given Pinnacle's recent announcement of a high grade ore find showing a bit more than an ounce per ton gold and six ounces per ton silver in a 50-foot intersection within a 290-foot intersection showing 0.2 ounces per ton gold, we expect good results. Simply put, their Silver Coin property is turning up a winner.

Apex Silver is doing very well, up 37% from our first suggestion. In spite of its initially high stock price, it seems likely to at least double for us. It is confirmation of our idea that Bolivia holds some sound mining investments.

Newmont has bounced back into positive territory on the new gold price rally. It is up 7% on our initial suggestion. Silver Standard has also moved back to green, up almost 6% on our initial suggestion. We've held consistently to our view that these two companies were undervalued by the market and represented good management, good properties, good business plans, and overall good underlying value.

By the very same token, Vista Gold is coming back, narrowing its red value and should be into the green soon.

That's it for good news. Now, let's look at the bad news.

Northgate has not responded well to a higher gold price. It is difficult to see why not. Presumably, part of the problem is Northgate's ongoing process of permitting to get the Kemess North property up and running, even though that process does not seem to have hit any snags. The underlying value for Northgate is very good, and should represent at least a double or triple against our initial $1.65 suggestion once the market reflects that value. Keep in mind that at lower gold and copper prices last year, Northgate had a bit less than $300 per share in copper and gold assets; with today's prices the numbers work out to something over $305 per share. Rather than suggesting abandoning your position, if any, at this time, we suggest you may wish to buy on current weakness.

Let's take a long hard look at Lumina Resources. Recently the company announced drilling results from their copper exploration project on the north end of Vancouver Island. The result show some 108.8 meter interval grading 0.35% copper and .53 grams per tonne gold on the Hushamu deposit. Not bad, but, the purpose of the drill programme was to find new mineralization below a defined quartz feldspar porphyry sill, and that mineralization was not found.

Lumina Resources then moved their drill to another site where they came up with 124.9 meters grading 0.11% copper and 0.52 grams per tonne gold. Combined with data from an airborne survey, the results of the drill program have generated eight new targets for prospecting, mapping, and sampling to take place currently and develop targets for core drilling for 4th Quarter 2005. Lumina also has a geophysical program at Redstone. Altogether, they have a budget just over C$2 million being spent on exploration this year. The company has a third property in Canada, the Casino property, which is a very large, lower grade copper/gold/molybdenum porphyry deposit, and not the subject of any exploration work this year, since it shows a 43-101 compliant resource estimate.

So, the company is exploring for copper, why are we showing them under "holding"? Well, that Casino resource is huge. It holds about US$3.4 billion of gold and about $7.9 billion in copper at today's prices. With only 22.4 million shares fully diluted, the Casino resource is worth over $505/share. Clearly, the market is severely discounting this asset's value.

Across all three properties, Hushamu, Redstone, and Casino, Lumina Resources has measured and indicated 6.1 billion pounds of copper and 9.7 million ounces gold, plus inferred 3.2 billion pounds of copper and 0.6 million ounces gold. Discounting the inferred to zero, I still show US$660 per share for these resources.

Management of Lumina Resources continues to involve Ross Beatty as chairman. Anthony Floyd is president. The plan seems to be to hold onto these resources until 2006 or 2007 and then divest to a Canadian copper producer. It is very difficult to see why this company has a 37 cents per share value, and that in Canadian dollars, when its underlying assets have so much value. In spite of very strong management, we suspect the market is treating Lumina Resources as a new and untested entrant. We continue to suggest you buy and hold this stock based on very strong fundamentals.

It's time for a hard look at Northern Peru Copper, as well. This company just announced drill results from their copper and gold property at Galeno. One of the better cores shows 54 meters grading 1.25% copper and 0.18 grams per tonne gold. A previous 43-101 compliant resource estimate suggests the Galeno property has a bit more than a billion dollars of gold and $10.2 billion worth of copper. Their Pashpap property has about $6 billion worth of copper and molybdenum. Altogether, I found about $17 billion in asset value, 22,361,442 shares fully diluted, so a bit more than $768/share for the mineral assets.

So, again, the market seems to be dramatically under valuing this company. Presumably, part of the error is in viewing Northern Peru as a brand new company formed in May 2005, whereas the properties and underlying asset values represent years of exploration and development. We continue to suggest you buy and hold this stock based on very strong fundamentals.

More than half of the value for Free Gold has been frittered away. It seems like a mistaken idea on our part, and we're now suggesting that you look for opportunities to get out. We probably should have suggested that action sooner. The company announced completion of their Union Bay platinum project exploration program in Alaska. One joint venture partner, Lonmin, seems to think the program was a bust and has notified Free Gold they won't fund further exploration there. The other, Pacific North West Capital intends to retain the project, reducing the property to encompass remaining prospects.

It now appears that the figures we used last Fall in our calculations for the value of the resources at Free Gold's Almaden (Idaho) and Grew Creek (Yukon) properties were based on historical calculations and were not 43-101 compliant. So, although they represent some $16/share of gold and silver, these figures have been completely discounted and should not be relied upon. I apologize for this misunderstanding on my part.

Free Gold's Golden Summit project in Alaska is certainly prospective for gold, but the report on this property suggests spending another $2.4 million to properly characterize the mineral resource. Similarly, their Rob property in the Goodpaster mining district of Alaska is prospective for gold, with some interesting grab samples and drill results, with the report on this property recommending a further million dollars in exploration to properly characterize the mineral resource. The reports on Free Gold's web site for the Almaden and Grew Creek property read much the same.

For all that the company got nowhere at Union Bay, that property isn't even listed as an active project for Free Gold. It seems to be a joint venture project and the focus of much of the company's 2005 efforts, and it didn't work out. Neither has Free Gold. Unless a dramatic turn-around occurs before our 3 October issue, we plan to drop this turkey.

Luzon has lost more than half its value. We thought the new management should have a chance to come to grips with the underlying value of the Amayapampa property (about US$7.62/share based on a legit 43-101 estimate) and some time to find financing for further exploration and development in Bolivia. It hasn't worked out. Again, we suggest you get out on any strength that materializes. We'll be tracking this stock until 3 October, unless it recovers its value.

Free Market Money

Gold broke through $450 and $455 in a very nice week, touching above $460 as if to count coup on that price level. Gold closed Friday 16 September at $459/ounce.

Last week the price of gold looked low, all the factors seemed lined up for a rally, and it happened. Next week the price may close some gaps in trading, such as $452, but the trend is up and you should want to be along for this ride.

Flash! Monday afternoon gold is rising against all fiat money, which are starting to sink at similar rates.

Silver at $7.21 per ounce (Friday 16 September) did close the Au/Ag ratio from over 64 to 63.66 today. It seems likely to narrow further, which, combined with a gold price rally suggests an even better silver price rally.

Copper was priced at $1.6741/pound on Friday.

Zinc was at $0.6204 per pound early Monday 19 September.

Nickel metal was $6.3874 also early the 19th.

U3O8 has not updated from the 12 September published price of $30.75/pound.

Friday saw US light crude at US$64/bbl and London Brent at US$62.90/bbl. Schlumberger was up Friday to $83.16 a share.

The three stocks we've suggested in this sector are PVH, GBH, and MCG. Prices from Monday 19 September 2005.

Company Symbol gAu
D
Gold Barter Holdings GBH 0.001

- 0.999

MicroCasino MCG 0.834

+ 0.321

Pecunix Venture Holdings PVH 0.028

- 0.029

Someone sold 2803 shares of Gold Barter at 0.001 grams per share on 14 September 2005 according to the PVCSE market data page. That same day, all other open interest above that price was met with sales. The only remaining open interest is a buy order for 3500 shares at 0.001. The lowest asking price is 0.155 grams per share.

The share price has collapsed to the dividend yield for third quarter 2005 (0.001091 g/share paid 1 August 2005). If you believe further capital disbursements to shareholders (dividends, returns of capital) are to be anticipated, the stock is clearly a good value at last traded price. Dividend yield for 2005 has so far been about 0.007 grams per share, or nearly 10.5 cents per share.

The Gold Casino last sale was 105 grams of gold (~$1548) per share.

Space Frontier

NASA plans to put four astronauts on the Moon in 2018. Unless something goes wrong or they run out of money. The plan includes sending four astronauts to Earth orbit where they would rendezvous with an "Earth Departure Stage" which would take them to lunar orbit.

All four would leave their vehicle in lunar orbit and travel to the Moon's surface in a lander. And, of course, nothing would ever go wrong in lunar orbit, so there's no need for anything but automation and remote operational capability there. Right.

After seven days on the surface, all four would take the lander back to lunar orbit, rendezvous with their "Crew Exploration Vehicle" which would, naturally, need nobody aboard to ensure the success of this rendezvous, and then, unless something went terribly awry, return to Earth orbit. Their vehicle would then re-enter the atmosphere, jettison its heat shield, ride down the rest of the way with a parachute, and bounce off air bags onto the ground somewhere in the vast American West. Unless something goes wrong, in which case they either abort to an ocean landing, or go splat. On a really bad day, their vehicle lands in some city, preferably square on the federalistas headquarters for that part of the country.

Sometime later today (Monday 19 Sep) NASA is to tell everyone about how clever their plans are. Apparently, one of the ideas is to put their Crew Exploration Vehicles into Earth orbit atop the four-segment shuttle Solid Rocket Booster. You know, the thing that burned through an O-ring system and fried the Challenger crew. Not to worry, it won't fail again.

One of the slimier people we know, Courtney Stadd, asserts, "The challenges facing successful implementation of the exploration vision are formidable, ranging from budgetary to the noise-signal ratio of competing priorities facing the political system." Which means...it's really hard to see where NASA is going to actually get this thing done.

But, presumably NASA is going to do what NASA is best at, wasting tens of billions of dollars of taxpayer money. And, no doubt, slime like Stadd will get their unfair share.

NASA delenda est.

SpaceDev closed at $1.50 on Friday 16 September 2005. It is exactly where it was when we first suggested it.

Last week we discussed shorting airline stocks. There may not be much time left. Consider the max year chart of Delta Air Lines. Now there's a statist company to be shed.

Launch Technology

      "I don't view it as a risk at all. Soyuz has an excellent reputation for safety and reliability."

      - Greg Olsen, 16 September 2005

Greg Olsen is a scientist and a wealthy man. So, he's paying for his own trip into space. Given what Dennis Wingo has reported on the price actually paid by Dennis Tito, I suspect that Dr. Olsen may not have paid $20 million as he is reported to have done. But, on the first of October he's scheduled to lift off from a launch pad in the Baikonur Cosmodrome in Kazakhstan. Presumably he will engage in the traditional cosmonaut collective urination on the tire of their launch pad access vehicle, as Yuri Gagarin did all those long years ago.

Meanwhile, the government of New Mexico and the governments of Europe have thwarted taxpayer efforts to be wealthy by seizing their funds in taxes. New Mexico State University and Arianespace are co-hosting a symposium to introduce the X-Prize Cup on 6 October 2005. We gather that Erik Lindbergh, yes, of the Charles Lindbergh family, is to be on hand to speak, along with Steve Attenborough of Virgin Galactic.

Given the success of the Ansari X Prize in stimulating a great deal of interest in space tourism, we look forward to seeing what the X-Prize Cup does, as well.

NASA delenda est.

New Country Developments

      "It's the nature of life. Life tries to expand and tries to adapt. If there's a forest fire in one valley, then all of the organisms in the next valley will slowly creep over the ridge and repopulate that valley. Any species that don't do it eventually die out. [Going to Mars would be ] all of Earth's life, acting together...trying to get into the next valley. And the only way we can do it is by building rockets."

      - Bruce MacKenzie, 19 September 2005

Bruce MacKenzie wants to build new countries on Mars. Why not?

Frontiers, as Frederick Jackson Turner and Dr. Robert Zubrin have pointed out, are healthful and life affirming. It is good to have frontiers. People who get tired of being told what to do and subjugated by jerks would be better off if they could pack up and go to the frontier. While the frontier was within walking distance, people on the eastern seaboard were able to leave labor disputes, political disputes, corruption, chicanery, and even court sentences behind them.

Mark Hornick, a former manager for Intel, has organized 4Frontiers Corporation with Bruce's help. The company's long term goal is to open a small human settlement on Mars, the 4th planet from the Sun (if one discounts Icarus planetoids within the orbit of Mercury, ignores Apollo asteroids and other Earth and Venus crossing bodies and counts the Moon as merely a satellite of Earth - depending on which rocks you count, Mars is the fourth big one) within 20 years. In the short term, the company plans to be profitable by bringing together talented people and patented technologies and market these in effective ways. The company takes its name from four frontiers, on Earth, on the Moon, on Mars, and among the asteroids.

One of the rather clever plans is to put together a 25,000 square foot simulator of a Mars settlement. In addition to providing a test bed for research, the simulator would be a tourist attraction and the 4Frontiers would charge admission.

The company has a $25 million private placement ongoing, has raised several million already, and plans an initial public offering within five years. Mark is the CEO for the new company and Bruce - whose name is legendary among Mars Underground enthusiasts - are joined by MIT master's student Joseph Palaia as co-founders.

Among other ways to make money, the company plans to gather patents and engineering ideas that would facilitate Mars habitat development. They plan to sell consulting services to aerospace companies or NASA. They expect to get work as consultants designing Mars sets for films and Mars rides for amusement parks. Meanwhile, their simulator would be established by 2007, possibly in Colorado, Florida, or New Mexico. Altogether, the company anticipates $34 million in revenues for 2007, including $7 million at the gates of their tourist attraction. Operating profits in 2006 are forecast at $1.4 million. By 2010, this figure would rise to nearly thirty million. Of course, anyone's guess what the after tax, depreciation, amortization, and related accounting silliness profits would be.

"It's a question of when. I really hope we get started before we have an economic decline that delays it. I'd really hate to have something like the Great Depression, or the Dark Ages that lasted several hundred years, delay getting into space," says Bruce.

Of course, government manufactures all kinds of problems. The way gold is shooting up presently, it seems likely that a lot of people are fleeing fiat currencies to get to something of value.

Naturally, in our view, the Dark Ages weren't really that big a deal. Stable gold currencies in Byzantium and the Caliphate created a broad economic prosperity away from the brutal and dictatorial Romans and their sycophants. Of course, it was a dark age for empire, but an age of enlightenment for those not sold on brutality and coercion.

NASA delenda est.

Longevity

The entire science of genetics came about because Gregor Mendel liked to garden. He identified inheritance traits in pea plants during his study in his monastery's experimental garden between 1856 and 1863, and came up with laws of inheritance. His interest in peas was nearly a monomania. In eight years he cultivated about 28,000 pea plants.

So it comes as no surprise that in 1990, other guys (Napoli, et alia) messing about with flowering plants came up with a key break through. They wanted to enhance the color of certain flowers, starting with petunias and perhaps ending up with new shades for roses. But, when they enhanced the genes responsible, they found they had canceled out the expression of those genes. Subsequently, this work and related discoveries in roundworms led to the development of virus induced gene silencing and the discovery of RNA interference.

RNA interference is a mechanism of molecular biology. The presence of certain fragments of double-stranded RNA interferes with the expression of a particular gene. The nice thing about RNAi as it is called is that it is highly potent and specific. Lots of things are potent and general, like systemic poisons. But, RNAi is both potent and specific so it is possible to turn off the expression of certain genes.

Note that the genes aren't eliminated. If you have the genes for expressing a particular disorder, RNAi doesn't modify things in the cell nucleus. But, the technique does potentially reduce your suffering by turning off the expression of that gene. The memory RNA that transmits instruction sets from the cell nucleus to the rest of the cell where proteins are made and enzymes excreted is modified and interfered with by RNAi. Done right, you can go on living with defective genes and never suffer from the related disorder.

The good news is that this technology is now yielding companies that specialize in development of RNAi techniques to oppose specific disorders. One of these, CytRx has come down off the hype highs of earlier biomedicine publicity, has a nice low price at US$0.90, and has made some impressive announcements.

"Earlier this month we announced a novel HIV DNA and protein vaccine ...[with the] ability to produce potent antibody responses with neutralizing activity against multiple HIV viral strains. We have also responded to US FDA action items cited for the clinical hold placed on our arimoclomol phase two clinical trial for the treatment of ALS or Lou Gehrig's disease....we anticipate beginning this phase two trial for ALS before the end of the year, and possibly within the third quarter," said Steven A. Kriegsman, president and CEO of CytRx in a recent press release.

The company is developing treatments for ALS, obesity, type 2 diabetes, and cytomegalovirus using RNAi technology.

We'll be following CytRx.

Legislatura delenda est.

Accelrys was $6.40 on Friday and dropped to $6.25 on Monday the 19th.

Dendreon which we began to follow at the ides of June was up to $6.93 on Friday, or $1.61 higher than our first look. It opened Monday at $6.97 and was at this writing down a bit to $6.70.

Elan Corp, PLC, has dropped to $8.17 on Monday the 19th against an earlier high of over $9/share. It is up a bit under a dollar since we first suggested it and began following the price, but the company's drug Tysabri is now associated with side effects. Tysabri has been effective in treating multiple sclerosis but has been pulled from the market after clinical trials showed several patients with a rare fatal brain disease apparently caused by the drug. While this matter settles, you may want to get out of Elan while the price is still above your point of entry.


Publication Note: Still running behind schedule.

Gratuitous example of bizarre legislation: The USA House of "Representatives" has passed a "hate crimes" bill that would extend federal law that now covers crimes motivated by race, color, religion, or national origin to include other crimes based on "actual or perceived gender, sexual orientation, disability, and gender identity." The amendment passed 223 to 199. Among other unintended consequences, the law would require all states to set up permanent sex offender registries, to keep on punishing after sentences have been served. In some states, public lewdness is a sex offense, and may be imposed on any act or speech the police would like to discriminate against. The law also calls for the creation of a national DNA database of anyone arrested or detained by a federal agency, so look forward to lots of cheek swabs at the next FEMA concentration camp at a "super" dome near you. The law also eliminates federal review for any prisoner convicted of killing anyone under 18, whether that "child" was a convicted rapist or not.


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