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

The Indomitus Report
Volume 2, #31

27 September 2005

Being Sovereign

      "Insurgencies tend to go on five, six, eight, ten, twelve years."

      - Donald Rumsfeld

Vice president Cheney says that the insurgency is in its last throes. General John Abizaid, commander of USA armed forces in the Persian Gulf region, told Congress that the insurgents are just as strong today as they were six months ago.

If there is any good news coming out of Iraq, it is that the USA military, having made intense foes out of Shi'ite Islamic clerics and believers in Iran, is now hard at work making enemies out of Sunni clerics and believers in Iraq. So, we ought to see some really interesting developments as a billion muslims around the world unite in their common hatred of the USA.

Let's take a long hard look at the cost in lives and in treasure. Lives are harder to replace, so let's look at the lives, first. As Bruce Springsteen once sang:

    I had a brother at Khe Sahn
    Fightin' off the Viet Cong
    They're still there, he's all gone.

The war began in October 2001 with Operation Enduring Freedom in Afghanistan. Since then, 238 USA military personnel are dead in Afghanistan. A further 583 have been wounded. Of these, 84 were killed in 2005, and 166 were wounded in 2005. The year isn't over, and already more American soldiers have died in Afghanistan than in any other year thus far. Five years in, there's no sign of victory, no indication that the war is ending. The military occuption of Afghanistan is a classic "land war in Asia." There is a light at the end of the tunnel, which is clearly a train coming full steam straight on.

In Iraq, there are 1,922 American military dead. There are ninety-six British military dead. Other nations have contributed 101 dead. Altogether, 2,119 troops are dead. The two thousand figure came and went with essentially no media attention, so we can presume that all the editorials about the Iraq occupation are being held for the USA military body count reaching 2,000. Of course, since I count from the invasion of Afghanistan, the total is 2,160 dead American soldiers.

In addition to military deaths, a further 269 fatalities among contractor personnel have been recorded. These are men and women working for various companies, often in essentially a combat application. Nationalities include Americans, Turks, Filipinos, Brits, Bosnians, Lebanese, Japanese, and other countries as well. There are probably more fatalities among this group, but information is not complete.

Just in case there were any doubt, the elections in January 2005 did not end the military occupation of Iraq. It seems just as hard to find victory, just as clear that the war in Iraq isn't ending, either. Again, it is a land war in Asia, the very metaphor of endless war.

Continuing on the matter of deaths, we have figures on Iraqi police and military personnel killed in 2005, around 1,956 and 3,256 altogether. From context, these are personnel supporting coalition forces in Iraq.

The figures on civilians in Iraq killed during the war are less clear. The evil and vicious General Tommy Franks of USA Central Command said, "We don't do body counts." Apparently the embarrassment over the body count figures from Vietnam, when the total had exceeded the estimated population for North Vietnam, is not to be repeated. Equally clear, the USA military does keep track. Somewhere in the Pentagon is some clerk with a tally of enemy and non-combatant casualties. It's the nature of military organizations to track such information, but, being basically bullies and therefore cowards, they won't release it.

The figures for civilians reported killed by military intervention in Iraq are necessarily only some part of the total. The best estimates place this figure between 26,165 and 29,478. I'll use the higher figure, since I don't regard this number as anywhere near an upper bound on the total death toll.

Then there are the wounded. Anyone who is even vaguely familiar with combat injuries cannot neglect the wounded. In many instances, these men and women have seen their lives ruined just as completely as if they were dead, in some cases with far more suffering involved. The Pentagon reported as of 8 September 2005 that 14,265 men and women in the USA military have been wounded. Of these, approximately 6,980 did not return to duty within three days, so we should expect them to be injured in some major way - limbs torn off, eyes blinded, shrapnel lodged in the head or chest. Ugly, brutal wounds from which the soldier does not recover within 72 hours, if ever.

Over 17,000 USA military personnel have been killed or injured in Afghanistan and Iraq in the last five years. Counting Iraq civilians as reported, contractor personnel, British and other coalition troops, and Iraqi police or military, a total of 50,208 are listed as dead or wounded in Afghanistan and Iraq.

Next time you see one of those sanctimonious jerks with a "support our troops" bumper sticker, casually run them off the road and when they get out to take you to task, hand them a note saying, "Over seventeen thousand troops are dead or wounded from the conflicts in Afghanistan and Iraq. Support them. Bring them home, now." You know, for fun and profit.

The war in Vietnam escalated from 1958 to 1967 before reaching a crescendo of violence from 1968 to 1972, so there is no reason to expect the rate of deaths and injuries to remain constant. But, at the rate for the last five years, if this "insurgency" lasts another 12 years, as Rumsfeld seems to predict, the figure for USA military personnel killed or injured would be a further 40,800 in addition to the 17,000 thus far, for a total of 57,800 military casualties.

Including all coalition forces, civilians, contractors, and Iraqi police or military, if the war continues another 12 years, the total including those already dead or injured would exceed 170,000. When you take a few moments to think about the lives involved, the children who grow up without parents, the parents holding the torn bodies of their children, the wounded who are never again able to lead normal lives, walk or run, have children, the soldiers who come home unable to live with what they saw or felt or did over there, you begin to get an idea of what twelve more years of war would be like. Unless you actually experience it, there's no way to really understand the horrors of war. These numbers, like 170,000 prospective victims, are just intended to give you a sense of how many lives are deeply affected.

I have some bad news for Donald. Insurgencies sometimes go on for decades. The French occupation of Indochina was resisted during the First World War. Ho Chi Minh appeared at Versailles, as a young man, seeking help from Woodrow Wilson (turned away by Mandell House). The Vietnamese insurgency lasted until 1979, if you count prospective and actual occupations by French, Japanese, USA, and Chinese military. Call it sixty years, in round numbers. If this war lasts sixty years, figure on over 600,000 casualties. Possibly far more.

Randolph Bourne said, "War is the health of the state." L. Neil Smith says, "War is the health of the state, and of nobody else. Put an end to the machinery of war, government, and you put an end to war. Simple, but most [people] are blind to it because, as much as they desire peace, they want to keep the state around for other reasons (Tom Paine Maru)." If you are against the state, you should be against this war. If you are for this war, please feel free to get in touch and explain why that might be.

The American Revolutionary War was a war against tyranny. It was horrible, brutal, and lasted from 1775 to 1781. As often happens, that war didn't fully settle all the issues, and there was another in 1812 to 1815 with the British militarily occupying parts of the USA. The War for Southern Independence was a similar war against usurpations and tyranny. It was even more horrible and much more brutal, lasting from 15 April 1861 to at least 1872 when the last militarily occupied state was declared to be subjugated. Over a million and twenty thousand men shed their blood on the field of battle in that war. The rest of the American wars have been deceit, betrayal, empire building, and madness. I've reviewed these facts elsewhere.

In addition to lives, the current war has expended treasure. By some estimates as much as $205 billion has been spent on the war in Iraq from 2003 through the end of the fiscal year on 30 September 2005.

Out of this war, three major accomplishments are certain. First, the price of oil is much higher, so the profits of oil companies are much greater. Second, the corrupt allocation of defense contracts is much greater because there are more defense contracts than there would have been without the war. Third, more people around the world despise the USA policy of military aggression and occupation.

A fourth, more pressing concern is whether the war is going to destroy the American way of life. It has already destroyed tens of thousands of lives. But, in some ways, a foreign war is about destroying lives elsewhere. Machiavelli taught The Prince to distract the people from discomforts at home by organizing a foreign war which would result in quick victory. Stir up those patriotic feelings. Insist that the loyalty of the people is necessary for a victory against the enemy. It is a technique that has been used to lead people into slavery time and time again.

(Please don't think Machiavelli evil. The lessons he taught are tools for subjugating a people, and may be used by people to resist subjugation. Any tool, any information may be applied for good or for ill.)

In September 2005, the military occupation of New Orleans began. USA military personnel began going door to door to seize guns from ordinary Americans. These gun seizures were direct and defiant treason against the constitution. Under no circumstances may the right to keep and bear arms be infringed. Under no circumstances may any freedom identified in the Bill of Rights be set aside. The constitution grants the central government no power to suspend any liberty except the great writ of habeas corpus and then only by act of Congress in cases of invasion or rebellion. The constitution is a dead letter, and all pretense of obedience to its terms is gone.

In plain words, that means rebellion. Some Americans are going to rebel. When Americans in New Orleans shot at military helicopters, they were rebelling. We can dispute whether their choices were wise or their purposes just, but their acts of rebellion are clear. Americans seeing the military attacking an elderly woman whose only perceived crime was having a gun to protect herself from looters and rapists are going to be angry. Americans are already angry about homes invaded in the Lower Garden District of New Orleans by thugs in military uniform who handcuffed homeowners and then seized their means of self-defense. For many Americans the right to keep and bear arms is a line in the sand. This month, that line was crossed.

The fascist dictatorship has endless apologists. Tune in any conservative talk radio show or visit any conservative web site. Try the Free Republic site for some clear cut neo-Nazi enthusiasm for the contemporary fascist military dictatorship. These people are not content with a republic unless the side they support is running things. They aren't enthusiastic about democracy unless they are in the majority. They perceive themselves to be in power and in the majority, now. And they are eager to run roughshod over individual liberty.

Make no mistake, these rebellions are being brutally repressed. The military occupation of New Orleans is just the beginning. The entire United States is to be militarily occupied. For years, now, the police have been militarized. The national guard has been, well, nationalized. Power has been centralized. Even the office of the presidency, according to John F. Kennedy in a speech shortly before his assassination, has been turned against the American people. The machinery of espionage, black operations, black budgets (in defiance of the requirement that all expenditures be published), and the military industrial complex does not merely threaten individual liberty, it stands in full opposition, today.

As the scale of the deaths, injuries, and victims of the war in Afghanistan and Iraq is more widely perceived, as the clear example of civil elections in Afghanistan with no end for the military occupation becomes more thoroughly understood, as the continued absence of any cassus belli and the compelling evidence of fraud and deceit take their toll, Americans are going to protest the war. The arrest of Cindy Sheehan is a typical example of what to expect. The same sort of thugs who picked up night sticks and bashed heads at the Chicago Democratic National Convention in 1968 are going to bash heads in the next several years. Already, at the 2004 conventions, we've seen demonstrators forced into cages where they can be ignored by not only the power-mongering convention delegates but also the mainstream media. More oppression, more brutality, and more atrocities may be expected. Waco, Ruby Ridge, and the atrocities in New Orleans are going to look like a walk in the park by comparison to what's coming.

Should you speak out against the war? If you wish. You have a conscience, you have a mind, use it. Should you write about the war? If you wish. You have an opinion, express it. Should you protest? If you wish. But as you contemplate resisting and protesting and perhaps even rebelling, consider the consequences. The cost is total: your life, your fortune, and your sacred honor.

In rebellion or revolution, there is no prize for second place. If you don't win, you face torture, suffering, destruction, and death, not only for yourself but for your family, your friends, everyone you know. So, be sure you have a plan for victory before you begin.

The American Revolution ought to be a cautionary tale. It is one of the very rare occasions when individuals got together, overthrew a tyranny, and didn't immediately form a new one. For a short span of years, suffering horribly from inflation, the Americans kept their governments on very short leashes. Ultimately, the revolution was betrayed by the framers of the constitution, who created the means by which a total government of absolute authority has since been established.

So, limited government only lasted about four score and four years. By the time the tyrant Lincoln made his Gettysburg address, the constitutionally limited republic was three years dead. Americans celebrate the anniversary of its destruction by making gifts of money and paperwork to ungrateful, incompetent postal workers every Fifteenth of April. For all that it was short lived, it was glorious. For most the years from 1800 to 1860, the average American never encountered anyone from the national government. Post offices were few and far between. Revenue collectors were rare, and mostly on the coasts. Taxes were light. There was no standing army, though, admittedly, Congress authorized some military forces every two years, and various corrupt contracts for gunpowder and weapons to fight needless wars with Indian nations betrayed in one treaty after another.

It didn't last. People lived pretty well when left alone. Very little government is actually necessary, and even less is actually desirable. (There are some necessary things which are undesirable, of course.) If anything should be learned from that period, it is that national banks are a bad mistake, corruptly allocated contracts are a spreading blight, and constitutions do not, in fact, limit government power for long, if at all.

So, if protesting and rebelling and writing letters to the editor and fighting against this useless, stupid war are not the highest and best use for your time or mine, what should one be doing?

It is a major question, and I don't intend to answer it quickly or casually. Rather, this question of what to do is the topic for the next several essays in this section of the newsletter. In brief, each of us should consider laying a solid foundation upon a bedrock of good ethics. Each one of you, and I, should lay a cornerstone for a new system of the world. A system not based upon authority or control or oppression, but a system based on individual liberty, private property, free enterprise, and the infinite possibilities these create.

The history of the world, up to now, has been very macabre. Billions of people have died in wars, in plagues, in famines, in natural disasters, and in unnatural ones. Systems of tyranny and oppression have infested every nation on Earth. Yet, in the long view, individual liberty always wins. Private property always comes back. Free enterprise and free markets create prosperity, so people always return to these methods, no matter how brutally they are suppressed. The looters are incompetent to manage their own affairs, they are incapable of producing wealth, and eventually they lose.

So, I'm optimistic. Yes, I find the deaths in Afghanistan and Iraq distressing. Yes, I find the effusion of blood to be unnecessary and lamentable. Yes, I mourn for the lost, the injured, and the impoverished, here and abroad. But, because of these sacrifices, and in spite of the suffering, in some cases deliberately because people want to overcome these things, I believe the future is going to be fabulous. We have within our grasp enormous power, enormous wealth, enormous potential, enormous capacity, a galaxy of stars and planets - a veritable cornucopia of blessings. We can reach for paradise, and we should.

Free Market Money

      "History certainly disproves the suggestion that government, which only profits from excessive issues, can be trusted more than a private issuer whose whole business depends on his not abusing that trust. Does anyone really believe that in the industrial countries of the West, after the experience of the last half-century, anybody trusts the value of government-sponsored money more than he would trust money issued by a private agency whose business was understood to depend wholly on its issuing good money?"

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

People have reason to distrust government. Indeed, people have no reason to trust any externally imposed, coercive government. Ever.

Government paper money is a bad idea. Is paper money in and of itself a bad idea? Should one be suspicious of a paper money issued by a private enterprise and voluntarily accepted? Certainly not in every case. Consider the Ithaca "Hours" or the Liberty Dollar paper warehouse receipts. These are examples of privately issued and organized paper money which anyone is free to accept or reject. In places around Ithaca, New York, where hours are accepted and used regularly, there is no great loss in accepting community money rather than some other form of money. The main expectation to be met is that, "...the risk they run in holding it will be smaller than the risk they run in holding any other good on which they do not possess special information (Hayek, Ibid)."

The nice thing about the Liberty Dollar warehouse receipts is they are acceptable more widely. Anyone, anywhere may accept a one ounce warehouse receipt with the expectation that if nothing else is workable, if nobody else accepts it as tender in payment, he can get the warehouse to redeem the receipt for silver. And, he knows one ounce silver bullion rounds can be cashed.

So, once again, we have acceptability as the sine qua non for a currency. If it is acceptable, it is a workable medium of exchange, and passes for money. If it isn't acceptable, if nobody wants it, then it isn't money. A store of value necessarily works as a medium of exchange, even though a medium of exchange can be implemented without a store of value.

Unfortunately, the experience in the time since Hayek's last edition of his great work on Denationalisation has not been uniform with regard to privately issued money. OSGold, evocash, and other privately issued monetary systems have failed. Beenz, Flooz, DigiCash, and other digital currencies are gone. The experience of many users of PayPal has been less than satisfactory.

However, the gold and silver based privately issued currencies are working, surviving, and doing well. There are certainly complaints about some of these currencies, but by and large the ones that uphold the basic standard of redeemability have survived. The e-gold currency is about to celebrate its tenth anniversary. The Liberty Dollar is not far behind.

Mind you, in their most insane nightmares, nobody who trusted OSGold with some part of their wealth would imagine the sort of suffering the people of Yugoslavia went through from 1993 to 1995. Nor the sort of wild, reckless, insane, deviant hyperinflation perpetrated on the people of the Weimar Republic from 1919 to 1923. These events, and the disaster with the piastre, the British stagflation, and the contemporary hyperinflation of the USA dollar involve billions of dollars of wealth, millions of people, and economic chaos on an epic scale.

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 (Wednesday 28 September 2005):

Company Symbol




Almaden AMM.TO




Free Gold ITF.TO




Luzon LZN.V




Pinnacle PNL.V




Western WNP.V




Lumina Resources



Northern Peru Copper



Regalito Copper RLO




Silver Standard SSRI




Vista VGZ.TO




Apex Silver SIL




Newmont Mining NEM




Northgate NXG



- 0.29

Tan Range TRE




Forbes magazine has a special promo on their web site saying that gold and energy are the hottest sectors of the stock market. With mainstream interest coming, a huge amount of institutional and individual investor interest is going to be crowding into stocks which are thinly traded in comparison to many other industries. You should see a boost wherever value is found.

Almaden turned from green to grey, and is back where it was when we suggested you look at it last November.

Free Gold goes off this list next week; we suggest you sell on any strength. Luzon actually has measured and indicated gold worth about $5/share, but it would be anyone's guess how much more dilution we'd have to take to get the financing needed to exploit the resource at Amayapampa. I expect to follow Luzon for a few more weeks, given their underlying asset value.

Lumina Resources and Northern Peru continue to be under valued by the market, which seems absolutely clueless to the measured and indicated underlying asset values. These are gigantic buying opportunities, and we suggest you get in while the getting is good.

Tan Range has announced more shares are being bought by the chairman, Jim Sinclair. Generally, when management believes in the company to put their own money in, there's a good opportunity.

Northgate is closing up further. They report discovery of new mineralization at Kemess North.

Pinnacle has completed the private placement with Zijin. Their financing is now rock solid. They placed three million units for cash proceeds of C$1.9 million.

Free Market Money

Gold lost its raging bull this week, but has held onto most of the ground gained last week. Early Thursdsay morning, gold was $469.

Stocks haven't done much; the Dow:Au ratio is down to 22.33. Oil is $67.00/bbl, and it takes 7 barrels to buy an ounce of gold.

Silver has run up to $7.36/ounce. The Au/Ag ratio is down to 63.72. Silver is still under priced at this level, and should go higher in the next few weeks.

Copper ran up to $1.82. Tonnage keeps going into warehouses.

Zinc topped $0.65 in the past week, falling back to $0.6369. Taken together, the price of copper and zinc tell us that there's over 20% premium on pre-1982 pennies. Three thousand pennies from that era, face value $30.00 have metal in them worth $36.22.

Nickel metal was $6.1031 early the 29th.

U3O8 was $31.25/pound on 26 September.

Schlumberger was up Thursday morning (after hours trading from Wednesday) to $84.96. Our favorite oil field services company is up $2.58 since we suggested it a few weeks back.

The three stocks we've suggested in this sector are PVH, GBH, and MCG. Prices from Thursday 29 September 2005.

Company Symbol gAu
Gold Barter Holdings GBH 0.001

- 0.999

MicroCasino MCG 0.834

+ 0.321

Pecunix Venture Holdings PVH 0.027

- 0.03

Pecunix Venture Holdings is off a bit. GBH hadn't shown any improvement, but a thousand shares open interest at 0.01 grams of gold suggests some improvement is coming.

The Gold Casino last sale was 105 grams of gold (~$1621) per share. The gram price has changed not at all, but the dollar price is up sweetly. Dividends post on Saturday.

Space Frontier

It all began back in 1977. The space shuttle was about to undergo drop tests from the back of a 747 carrier aircraft specially outfitted to haul it up to altitude. A campaign was underway to name the drop test article Enterprise for various fatuous reasons. And a powerful expendable rocket launched the first Voyager of two toward the outer Solar system. After a few years, amazing photos of Jupiter, Saturn, Uranus, and Neptune came back. After 28 years, both Voyager spacecraft are still functioning, far from Earth.

Those were the days when radio-isotope thermo-electric generators (RTGs) were cheap and plentiful. People in remote locations were seriously considering acquiring them as "pocket" nukes for their electric power needs. RTGs power the two Voyager spacecraft. Deep space radio receivers listen for their signals. In another ten years or so, Voyager One will pass the heliopause and enter interstellar space. Voyager Two should follow suit about five years later. The two spacecraft have taken very different paths out of the Solar system, so they provide useful data for comparison.

Voyager One has passed through the termination shock. This boundary layer forms where the Sun's "solar wind" meets the interstellar medium. The wind slows from a million miles an hour to become much denser and hotter. Beyond the shock zone, the wind speed slows and even reverses to flow back toward the Sun. The reduced outward pressure may be related to the eleven-year cycle of sun spot activity, the so-called solar maxima and minima. (There was a maximum of sun spots in 1979, again in 1990, and again in 2001. Minima were about 1985, 1996, and around 2007. The Earth's atmosphere expanded in 1979 to bring down Skylab and might have done the same to Mir in 2001 owing to increased solar radiation, but NASA persuaded the Russian government to force the issue, to the financial detriment of Walt Anderson's MirCorp.)

Scientists were suprised by the speed at which the direction of the interplanetary magnetic field varies in the outer Solar system. As the Sun rotates every 26 days, the direction of the field alternates each 13 days. After passing through the termination shock boundary layer, it took more than 100 days for the magnetic field to switch direction, in contrast to the 13 day pattern inside that boundary. It is not clear whether other star systems would have a similar slowing of their magnetic field variations.

Another interesting development is the velocity of cosmic rays beyond the boundary layer. Some scientists theorized that the boundary layer would provide the most intense cosmic rays, but in fact as Voyager One has gotten further beyond the termination shock, the intensity of cosmic rays has been steadily increasing. Thus, cosmic rays are not caused by nor intensified by the termination shock, but come from further out.

Now nearly three decades old and billions of miles in the cold and Sun-dimmed reaches of the outer Solar system, two spacecraft continue to send back useful data as long as NASA bothers to pay to tune in. In case you might have been convinced that NASA would never abandon the Voyager spacecraft, keep in mind that these bozos turned off the Viking Mars landers well before they would have ceased to function. If NASA ceased to exist tomorrow, radio astronomers would continue to receive the signals from these distant probes, and scientists would continue to study the data.

NASA delenda est.

SpaceDev closed at $1.59 on Wednesday 28 September 2005. It is nine cents up from our first suggestion.

We discussed shorting airline stocks. Delta Airlines unchanged at $0.82. America West rose from $8.40 last week to $8.70 on Wednesday. US Airways Group has taken over LCC which was the ticker symbol for Lumina Copper. LCC is $20.50, and we'll keep track for a few weeks. JetBlue is up 12 cents to $18.11 on Wednesday. (An impressive landing with a busted nose gear made international news.)

Launch Technology

      "The objective is to have a vehicle which is more comfortable than the Soyuz capsule. It will be used with pilots and four passengers. It's meant to service the space station and to go between Earth and an orbit around the Moon with six crew members."

      - Alain Fournier-Sicre, ESA permanent mission to the Russian Federation

Since 1966, the Soyuz capsule has flown hundreds of missions. After 40 years of cost effective, safe, and reliable space transportation, Russia is considering the future. And the future has never looked better.

Not only does the Soyuz have an immense base of experience behind it, but the same launch vehicle has orbited hundreds more Progress freighter vehicles to resupply the seven Salyut, one Mir and one international space stations with which the Russians have experience. The majority of humans taken to orbit have gotten there on a Soyuz, and the really good news is that wealthy entrepreneurs are standing in line to pay $12 to $20 million for a chance to fly.

With that in mind the Russians have envisioned a Clipper vehicle. From its design, it would clearly be launched atop some Russian rocket, possibly an upgraded Soyuz lifter with stretched fuel tanks, more likely something on the order of their Proton. It might also be made compatible with the European Space Agency (ESA) Ariane rocket system.

The current approach to Russian space tourist flights is one tourist with two pilots. Using the Clipper, the Russians could launch four tourists with two pilots, quadrupling their revenue per flight. This approach suggests significant reductions in per passenger fees, depending on demand.

The good news is that the design approach is comparatively incremental rather than radical. Unlike the idiotic NASA program of the 1970s to scrap Saturn V rockets and replace them with a totally bizarre shuttle built around budgetary considerations rather than design concerns, Russia is building a reusable space capsule with winged re-entry and, presumably (based on the shape) parachute landing systems. It isn't a totally new launch system, just a new capsule. Russian space experts anticipate having the new vehicle ready for fully automated space test flights in 2011, proving it with people on board in 2012, and possibly phasing out the Soyuz in 2014.

The bad news is the European Space Agency is demanding 40 million EU euros this year from member nations' taxpayers and 100 million euros per year until 2012 to complete it, in addition to whatever the Russians beat out of their peasants. Perhaps the Russians would get some funding from Space Adventures or other tourism companies to fund the development.

ESA is planning to have two seats on every flight in exchange for their contribution to the development program. That's good for ESA, which has had to buy flights from the Russians or rely on the wholly unreliable NASA for occasional flights aboard the now-grounded shuttles. It may also provide an opportunity for ESA to sell its seats to space tourists. Whether the hidebound 35 year old bureaucracy would ever gather the nerve to sell trips into space to a space tourism company seems doubtful. But, in 1990 I was completely surprised that the Soviet space agency Glavkosmos was eager to fly an American to their space station Mir. Stranger things have happened.

NASA delenda est.

New Country Developments

It says something about Estonia that their national epic poem is over 19,000 verses long. Friedrich Kreutzwald published his poem Kalevipoeg in 1857. The outline of the story is that this great hero goes to an island where he seduces a young woman who later kills herself, has a blacksmith forge a sword for him, kills the blacksmith's son, and returns to the mainland where he goes about shaping the Earth with his bare hands and heroic strength. The blacksmith casts a spell on the sword. Later the hero visits hell and overcomes the devil with a spell or potion. The devil casts his own sword into the hero's path across a river. The sword, in keeping with the blacksmith's curse, cuts Kalevipoeg's legs off. So the hero descends into the underworld where he awaits an opportunity to redeem his homeland and free his people from oppression, much like the legend of King Arthur.

Perhaps Mart Laar carries some of the blood of Kalevipoeg. In any event, former prime minister Laar's flat tax system has been an economic miracle for the people of Estonia. The program was originally 26% tax, no exemptions, no inheritance tax, and no corporate income tax. Corporate income is only taxed when distributed as dividend income to individual shareholders. Within a few years, economic growth reached double digits. Since 2000, it has remained at 6% growth per annum, and the flat tax is being reduced to 20% next year. Laar's only economics text? Milton Friedman's Free to Choose according to the latest issue of Doug Casey's What We Now Know.

For a new country, Estonia is incredibly old. In 2004 archaeologists digging near the confluence of the rivers Reiu and Pärnu discovered remains of a settlement approximately 11,000 years old. Those were days when "global warming" really meant something and wasn't just a policy of the BBC News editors to be spouted every few weeks on whatever flimsy evidence.

(There was an alarmist report on BBC World recently. NASA has filmed the late Summer ice cap in the Arctic from orbit. Yes, during a Solar minimum period which we are now in, the ice cap is quite small. NASA says the ice cap is some 30% smaller than it was 28 years ago. Of course, 28 years ago, in 1977, many popular scientific articles were deeply concerned about the prospect for a new ice age.)

As the interglacial began, the sea level rose, the temperatures became more moderate, and the glaciers covering much of the northern hemisphere began melting away. Around 8,500 years ago, hunters and fishermen living near the town of Kunda created bone and stone artifacts. About 5,000 years ago, Estonia was probably occupied by the Comb Ceramic culture. In between these two auspiciously ancient dates, Estonians developed agriculture, formed clans, and began to trade with their neighbors.

One of the advantages for Estonia was its great distance from Egyptian, Chinese, and Roman imperial ambitions. Estonia managed to avoid being conquered by any of these weird empires, happily arranging to have a wide variety of Germanic tribes as a buffer with the Romans, and various Mongol tribes as a buffer with the Chinese.

Being remote didn't last forever. The Catholic church found pagans in Estonia in AD 1193, so Pope Celestine III demanded a crusade. Germans came to Riga in contemporary Latvia where they established a stronghold. Their allies the Livs and Letts, tribes newly converted to Christianity, assisted the German crusaders on raids into Estonia. Resistance was fierce until 1217 when the Estonian general Lembitu was killed. Danish crusaders, not many generations removed from Vikings arrived in 1219 at Tallinn. The last Estonian stronghold on the island of Saaremaa in the Gulf of Riga fell to German conquerors in 1227.

Tallinn, on the Southern shore of the Western end of the Gulf of Finland is more or less opposite Helsinki. Of course, it is an important trading center for the region, which includes the Russian port at St. Petersburg. So, about 1248 Tallinn joined the Hanseatic League.

The Hanseatic League was organized about the time of the founding in AD 1158 of the German city of Lübeck by Henry the Lion of Saxony. The term hansa refers to guilds, especially trading guilds or merchant associations. Some of the goods they were particularly interested in were timber, wax, resins, honey, furs, rye, wheat, copper, and iron from the Baltic Sea region, for which they provided cloth and manufactured goods from the North Sea region. Many of the Hansa were early anti-government trade enthusiasts who frequently organized their affairs to be on equal footing with local monarchs from whom they demanded concessions and privileges, including tax avoidance. In London, the Hansa were able to demand from Henry II market rights which freed them from all London tolls and provided for open commerce at all trade fairs throughout England in 1157.

Estonia had two major Hanseatic ports at Reval, now known as Tallinn, and Dorpat, now called Tartu. The Hanseatic League became important for developing trade routes, advancing the law merchant, and establishing a general diet or merchant's parliament. For all that it was a league of local merchant guilds, the Hanseatic towns were not unified nor were they bound into a closely managed formal organization. Rather, League decisions even of the assembly of Hansetag were not binding on individual cities. About 170 cities all over northern Europe participated in one way or another.

The wealth of Hanseatic merchants and cities bought tools for defending trade routes and securing them against grasping government authorities. The league had heavily armed warships, fought the Danish government to a favorable treaty, trained pilots in all the ports of commerce, and erected lighthouses as aids to navigation. The model was so effective, that science fiction author Poul Anderson conceived of an interstellar trading empire based on similar lines, his "Polesotechnic League" with several novels based on that idea. The Man Who Counts was among the better reads in that series.

The downfall of the Hanseatic League was better organized states and a failure to keep abreast of new monetary technology. Queen Elizabeth I, feeling strong from her victory over the Spanish Armada, expelled the League from London in 1597. Bills of exchange and related innovations from Italy were ignored, along with credit vehicles - the Hanseatic merchants relied on silver coins changing hands. And, of course, the great store of value of silver, mined in the Harz mountains and struck into Joachimsthalers, was dramatically inflated when Spanish Conquistadores raped the New World and brought huge lodes of silver to market. The League began to fizzle out in the 17th Century, and was effectively dead in 1754. However, it was a remarkable mercantile empire which created a lasting impression. Even today, cities all over northern Germany identify themselves as "Free and Hanse" cities.

For some years, we've pointed out that military conquest settles very little for long. And, indeed, in 1343, less than 120 years from the supposed pacification of Estonia, Vesse, the king of Saaremaa led the Estonian people in the St. George's night uprising against their German-speaking overlords. As so often happens, this rebellion was brutally suppressed, with Vesse hanged in 1344.

German and Hanseatic influences remained in control in Estonia thorugh 1561, when the Swedes invaded the region. By 1625, Estonia was entirely under Swedish rule. Gustavus II "Adolphus," the Vasa hero of Breitenfeld and the original Protestant Defender established a printing press and a university in Tartu. He also deigned to allow Estonian nobility to grant peasants greater autonomy, the first major break in the serf system. Swedish rule continued until 1721 when Russia defeated Sweden. However, German and Swedish influences continued in the legal system, the Lutheran church, and even in the schools where German continued to be taught.

The Vasa reforms took hold, and Estonia and her neighbors abolished serfdom in 1819. Peasants were allowed to own their own land, move off the land into cities, get jobs in factories, and generally be economic free holders once again. Partly in response to this greater individual freedom, Estonians began a cultural movement in favor of the Estonian language. Schools began to teach their native tongue, all-Estonian song festivals were held regularly, and Kalevipoeg was published in its extant form.

The contrary movement toward repression was evident in 1889 with the central government of Russia demanding "russification." Many German legal institutions were abolished. The university at Tartu had to convert to teaching all classes in the Russian language. (The czarist policy of russification was continued even more vehemently, and bloodily, under the Soviets.)

Backlash to the repressive central government of Russia gained ground thanks to Jacob Schiff's financial support for the Empire of Japan. In 1905, the Japanese defeated the Russians. A revolution swept across Russia. Estonians demanded freedom, universal franchise, and national autonomy. These demands went unmet until Russia was effectively destroyed in World War One, at which point the Russian provisional government granted Estonia national autonomy. An elected national assembly was formed.

Of course, the evil Bolsheviks, also funded by Jacob Schiff and the banking cartel, were quick to force Estonia's national assembly underground. Even so, the assembly's committee of elders declared the Republic of Estonia on 24 February 1918. The next day, German troops invaded. The withdrawal of German troops after the armistice in November 1918 was followed by a brief return to power for the Estonian provisional government. Then the Soviets invaded. The war for Estonian Independence lasted until February 1920 and the Treaty of Tartu. The Soviet government renounced "in perpetuity" all rights to the territory of Estonia, a renunciation which proved to be just as worthy as any other promise of any national government. For the time being, however, the Russians had been expelled and Estonia joined the League of Nations in 1921.

Estonia's independence began inauspiciously with the forcible redistribution of property from large estate owners to volunteers who had fought in the Estonian war for independence, and a few other peasant class folks. However, Estonia focused on trade and commerce, selling throughout Scandinavia, the UK, Western Europe, and the USA. Sharing a border with the Soviets, it was inevitable that some trade occurred to the east, but most of Estonia's focus was directed West.

Perhaps inevitably, the republic form of government adopted in a constitution in 1920 didn't last long. In the following decade, eleven governments were formed with various factions in the hundred member parliament. From 1934 to 1938, the country was ruled by decree by Konstantin Päts. The Päts regime continued after 1938 with an "election" of sorts with him serving as the first "president of the republic."

On the plus side, the parliament passed in 1925 an act of toleration guaranteeing cultural autonomy for any group with at least 3,000 members. This particular act was seen as a great blessing among the country's Jewish population. Estonia may have been planning for an open society of freedom and independence, but others nearby had darker plans for her fate.

On 23 August 1939, Molotov and Ribbentrop signed the non-aggression pact between the Soviet Union and Nazi Germany.

    Once a Nazi, would be shot, see?
    Oh my darlin' party line.
    Now the Nazi's hotzy-totzy,
    Volga boatmen sail the Rhine.
- "Songs for Sectarians"

Under the accord, the Soviets would occupy Estonia, Latvia, Finland, and Lithuania. The Germans would occupy Poland. Within weeks, blitzkrieg and the world was again at war.

For Estonia, the beginning of the war was a "request" from the Soviet Red Army to station troops in Estonia in September 1939. By June 1940, the government of Estonia was driven from power. All political parties except the Communist were outlawed. The Estonian Socialist Republic was born on 21 July 1940, becoming the Estonian Soviet Socialist Republic 6 August 1940. Meanwhile, many government leaders had fled, along with some of the gold from the Baltic states.

On 14 June 1941 the Soviets began a program of mass deportation of Estonian leaders, teachers, merchants, and others. Nobody had been formally charged, there were no prosecutions, and sentencing was immediate exile. A week later, Germany attacked the Soviet Union.

Having been part of the Hanseatic League with German speaking nobility for seven hundred years, the invasion of Germany was largely welcome. However, the Nazis weren't the nice German merchants and burghers of yore. Instead, they made Estonia a province of Ostland, put thousands of Estonians in concentration camps, and called for volunteers to fight the Soviets. Fighting Russians is generally attractive to Estonians, and many heeded the call to arms. The First Estonian division became the 20th Waffen Grenadier division of the SS which saw action throughout 1944 defending the Narva frontier. The division retreated to Germany and surrendered to American and British troops in 1945, only to be turned over en masse to the Soviets. Presumably, most of these Estonian volunteers ended their days in gulags.

In September 1944, with Germany retreating from the Baltic, the last prime minister of the Estonian republic assumed the presidency and sought recognition. Unfortunately, the evil FDR had consigned the Baltic states to Soviet control along with the rest of eastern Europe. So, the new government fled to Sweden.

It was a terrible war all over the world. Estonia's major ports were destroyed, their railroads damaged, industry bombed into oblivion. About two hundred thousand Estonians died and some 80,000 fled to the West. Thirty thousand Estonian soldiers were killed in action. Then, the Soviets came back in 1944, stripping Estonia of her Narva and Petseri border districts which had a substantial Russian minority population. Then came the arrests. Anyone who had actively supported German occupation or actively opposed Soviet rule was arrested, shot, deported, or imprisoned.

But it was war time, so the population had many guns, the Soviets were truly hated, and an underground resistance was formed. The Metsavennad or "Forest Brethren" was organized with as many as 35,000 people participating. The peak period of resistance was between 1946 and 1948. The last of these resistance fighters remained at large until September 1978, and suicided upon capture. The Soviets deported nearly 21,000 people in March 1949, around one person in forty. These people mostly died in Siberian gulags.

There's not much to say about the brutally repressive Soviet regime of the 1950s, 1960s, 1970s, and early 1980s. Finnish television broadcasts were received in Estonia and became the basis for some understanding of the lies of the Soviet propaganda machine. Ultimately, this communication link from the West became significant in Estonia's leadership under the glasnost and perestroika of the Gorbachev regime. (Glasnost or "openness" being something now greatly needed within the regimes of the UKUSA treaty.)

It is important to understand that Soviet rule was not really about socialism nor communism. It was largely about Russian ethnic and cultural dominance. The "Communist" party was the mechanism for political and economic control. It favored ethnic Russians, forced Russian language into Estonian schools, and generally tried to extinguish Estonian culture. By 1988, political parties were organized to oppose the monopolistic evil of communist party central control. On 16 November 1988, the Estonian "supreme soviet" declared Estonia's sovereignty.

Ultimately, though the Estonian people chose to wrest political power from the hands of the Soviets of every ethnicity and nationality. So, they formed dozens of Citizens Committees in 1989. Their goal was to identify the pre-war citizens of the Republic of Estonia and their descendants. They emphasized the illegality of the Soviet occupation and the de jure existence of the Estonian republic, still recognized by nations in the West.

Within a year, the citizen committees had identified 900,000 citizens of the republic. As a result, free elections were held. On 24 February 1990 the Congress of Estonia was elected. Incuded in their membership were thirty-five delegates from refugee communities overseas. These events didn't sit well with the "supreme soviet" of Estonia, which held elections of its own in March 1990. Soviet troops stationed in Estonia were encouraged to vote in these elections. Over the border in Latvia and Lithuania, confrontations and violence were the norm. Customs and border guards were murdered in Summer 1991. Estonians pursued a policy of non-confrontation during this difficult transitional time. Then came the August 1991 coup in Moscow.

Finally, on 20 August 1991, Estonia declared its independence once again. This event is celebrated every year in Estonia. Formal diplomatic relations with the USA and the USSR were established in early September. By the end of August 1994, the Russian troops stationed in Estonia had been withdrawn. Estonia joined the European Union in 2004, and is now a member of the North Atlantic Treaty Organization.

So, there you have it, the eleven thousand year history of Estonia. It is a small country, geographically situated athwart significant trade routes. It is "new" since 1991, or at least renewed. Expect to hear more about it in the future.


Here's the math on Tysabri. It is the only drug that has shown significant benefit to multiple sclerosis patients. The only fatal side effects cases occur when Tysabri is used with Biogen's drug Avonex. Around 300,000 people in the USA have multiple sclerosis, and 200 new patients are diagnosed every year. Across the globe, perhaps five or six million people would be diagnosed with MS if they weren't suffering from some more dire condition (starvation, malaria, etc.).

Three patients have contracted progressive multifocal leukoencephalopathy, two of whom have died. However, that rate of side effect is one tenth of one percent. And, all those victims of that side effect were also taking Avonex. About 91% of patients who took Tysabri have now been screened for this deadly side effect, and no more have been diagnosed. The partnership with Biogen led to the decision to market both Avonex and Tysabri as a dual therapy without first getting Tysabri approval by itself. Obviously, that choice was a bad one and Biogen's interests lay in seeking approval for Tysabri alone.

Around 25% of patients get no relief at all from existing drugs. The remainder complain of limited effectiveness of existing treatments, which only slow the progress of the disease, have a high relapse rate, and often have significant side effects of their own. Thus, many patients simply stop taking them. The progressive debilitating effects of the disease are 100% certain. Tysabri provided full remission for three years to one patient who gave a testimonial to Forbes. The potentially fatal side effect occurs in one-tenth of one percent of patients, and has occurred in none which took Tysabri alone.

Thus, very likely, the pressure to test Tysabri without Avonex and to approve it should be more than the FDA can resist. However, keep in mind that the FDA kills hundreds of thousands of people every year by refusing to approve drugs known to be effective against fatal conditions. The FDA has harmed millions of people by delaying approval for useful drugs.

The authors of the above quoted Forbes analysis suggest that approval of Tysabri as a drug treatment by itself (without Avonex) would likely double the market price of Elan.

FDA delenda est.

Legislatura delenda est.

CytRx was $0.97 on Thursday 29 September 2005, up seven cents since we suggested it. The FDA has approved arimoclomal for fast tracking through their crazy labyrinth of deadly red tape.

Accelrys was $6.66 on Thursday the 29th. It is up a nickel on our first suggestion.

Dendreon was $6.55, or $1.23 higher than our first suggestion.

Elan Corp, PLC, was up to $8.81 on the 29th, up $1.58 since our first suggestion.

We casually mentioned the idea of shorting Pfizer and other major drug makers at the end of May. Pfizer was $25.09 on the 29th, down 11.5% since our suggestion. Merck is off 14.6% in the same period.

Publication Note: Closing in on the schedule.

Consider encouraging your friends to sign up for The Indomitus Report. We are prepared to pay a 10% finder's fee to anyone who brings in a trial subscriber or annual subscriber.

Gratuitous example of bizarre legislation: Florida lawmakers are fighting a new law in Congress that would repeal an existing unconstitutional law banning offshore drilling in certain locations along the Florida coast. Apparently, these bozos and Governor "Jeb" Bush haven't heard that energy prices are sky high.

A quick follow-up on the story of gun seizures in New Orleans. A lawsuit by the Second Amendment Foundation and some old-line gun group (the Nationalist Rifle Association?) has resulted in a judge enjoining the City of New Orleans from further gun grabbing activity. Eddy Compass has resigned as police chief, may his disgrace dog him the rest of his days.

We've added "Voting Is Madness" to our collection of essays.


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