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

The Indomitus Report
Volume 2, #34

2 November 2005
"Cruel and Unusual"

Being Sovereign

      "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted. "

      - this Constitution for the united States of America, Bill of Rights, 15 December 1791

The United States is becoming more like Zimbabwe every day. While its officers and agents conspire to violate their oaths of office, betray individual liberty, and commit treason, the people are subject to coercion, fraud, deception, control, theft, murder, and torture. There is no moral difference between what the existing government does to Americans and what Mao's government did to the Chinese. Presently, there is a difference in degree, but such differences are quickly made up.

Before examining the use of torture against American civilians by the military and espionage agencies, let's take a step all the way back to the ratification of the Bill of Rights in 1791. The Eighth Article of the Bill of Rights pertains to the actions permissible for officers, soldiers, and sailors of the United States, including any bureau-rat or politician who has sworn an oath to uphold and defend the constitution of the United States. This provision does not speak to the subjects of torture, but to the persons explicitly forbidden from committing acts of torture.

Anyone sworn to uphold the constitution who requires excessive bail, imposes excessive fines, or inflicts cruel or unusual punishment is a traitor. Such persons should be routinely arrested, tried, and executed, preferably by ad hoc tribunals of American citizens. Since oath takers are expected to uphold every provision of the constitution, any oath taker who reneges on this agreement should not be regarded as fit for the ordinary "due process of law," but should be met with extraordinary justice, as immediate and as deliberate as possible.

It isn't even as though torture were a useful tool. Time and again, torture has been revealed as ineffective in producing accurate or reliable testimony. Victims of torture are eager to say anything that they come to believe would stop the torture, including as many false things as true. Since these facts are extremely widely known, one has to ask: what kind of filthy vermin commits acts of torture? Evidently, the kind that enjoys the prospect of torturing others. There is no valid reason for torture, it doesn't produce good information, it doesn't assist in providing accurate results.

It gets worse. By torturing enemy combatants of whatever group, the members of that group become more likely to engage in acts of violence, including torture, against captured American civilians and soldiers. Again, the evidence for such retribution is widespread. Thus, any American official who engages in or condones or omits to prevent or punish acts of torture must be viewed as someone who wishes to see American civilians and American soldiers tortured.

Therefore, the obligation of Americans sworn to uphold the constitution - a constitution which could not have been ratified without the ratification of the Bill of Rights itself, is to arrest and prosecute any other person sworn to uphold the constitution who engages in acts of torture or any other form of cruel and unusual punishment.

When I began writing this issue of the newsletter, much earlier this month, the Washington Post had reported that the Central Intelligence Agency has been (and continues to be) hiding and interrogating captives at a Soviet-era compound in Eastern Europe. The evil and malicious maniac who now serves as USA Attorney General has just indicted Jose Padilla on charges which are not supported by the torture in Egypt (by "water-boarding" or attempted murder by drowning) of another al Qaeda operative. Additional evidence of torture of captured civilians and soldiers in Afghanistan, Iraq, and Cuba has become widespread. The United States government is being operated by murderers, torturers, thieves, and scum.

In the presence of such overwhelming evidence that these vindictive, vile, putrescent individuals continously violate their oaths of office, commiting thereby repeated acts of treason against the constitution, making war against the United States, and giving great aid and comfort to its enemies, it is extremely difficult to have any respect for badges of office or symbols of coercive, externally imposed government. Perhaps the French civilians rioting in the communities surrounding Paris (and others rioting elsewhere in Europe) are correct in identifying the proper response to such sustained abuse of power.

If the CIA is allowed to hold individuals without trial, without Congress having suspended the writ of habeas corpus, if the USA Attorney General is permitted to hold Jose Padilla for three years before indicting him on any charge, if torture is to be commonplace, if these disgusting vermin are not willing to make any distinction between American citizens (e.g., Padilla) and foreign nationals - then what safety is there for anyone? The government is out of control. The United States are being subjugated under tyranny most foul.

Free Market Money

      "The two goals of public finance and of the regulation of a satisfactory currency are entirely different from and largely in conflict with each other. To place both tasks in the hands of the same agency has in consequence always led to confusion and in recent years has had disastrous consequences. It has not only made money the chief cause of economic fluctuations but has also greatly facilitated an uncontrollable growth of public expenditure. If we are to preserve a functioning market economy (and with it individual freedom), nothing can be more urgent than that we dissolve the unholy marriage between monetary and fiscal policy long clandestine but formally consecrated with the victory of 'Keynesian' economics."

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

Consider the situation in France as a harbinger of events soon to be seen in the USA and elsewhere. With the possible exception of New Zealand, nearly every Western country should expect similar events.

The people of France are once again suffering from fiat inflation. It was bad enough under John Law's Mississippi money when King Louis Quatorze made John Law into the head of the Banque Royale and perpetrated an enormous scam on the French economy. So-called "realizers" at the time moved their funds into anything of value - one even bought out an entire edition of an early encyclopedia, being sure that books would sell when paper money would buy nothing.

It was much worse under the National Assembly with its assignats and under the Directorate with its mandats. Andrew Dickson White in his excellent book Fiat Money Inflation in France demonstrated the extent of this difficulty. For many generations thereafter, the French were extremely wary of fiat inflation scams. As recently as the 1960s, France led the way in restoring gold to its fair market value by demanding redemption as it became increasingly obvious that the scammers in the USA Treasury were printing far more money than they could redeem for gold at the fixed rate of $35/ounce.

But, the temptation of inflation is overwhelming, and politicians are not the sort who can long resist. So, the French government's fiscal policies have not met the standards set for the European Union "euro" currency. Ever. Germany has also been running excessive deficits. The euro has been printed up to match these deficits, and the euro is inflating.

Alas for the poor souls on fixed incomes from their governments. Faced with the prospect of not having enough money to eat this winter or, if they choose, having food but not enough money to heat this winter, French civilians have looked for another choice. Heat or eat or fight the pigs in the street? Inflation is the root cause of their unrest, because the policies which tax them into poverty and provide them state welfare at levels insufficient to meet their rudimentary needs are unworkable.

Fortunately, the advent of free market money means we don't have to wait for politicians to do anything intelligent. Goodness knows, one could wait until the end of time for such an event from the current crop.

Rather, we can preserve a functioning market economy, and with it individual freedom, by individually choosing to dissolve the relationship between fiscal policies of the madmen in government and the monetary policies which apply to our market economy. We don't need government issued money to engage in trade and commerce. Instead, we have many choices of gold, silver, platinum, palladium, and other value-backed currencies. These are available now, today in both physical and digital forms.

Don't like the monetary policies of Alan Greenscam? Not to worry, "Helicopter Money" Bernanke's policies won't be much better. But these policies are irrelevant if your currency of choice is GoldMoney. These policies are irrelevant if your currency of choice is e-gold. The policies of government madmen are irrelevant if your currency is e-Bullion, Pecunix, the Liberty Dollar, the Phoenix Dollar, 1MDC, or any other free market money.

The recent growth in bar counts at GoldMoney and at e-gold make it clear that interest in alternatives to fiat money inflation is growing. People are beginning to pay attention to these alternatives.

Another way that people are making clear their dissatisfaction with fiat money inflation is their deliberate shift of resources from fiat currencies into gold and silver. The price of gold has sailed up within spitting distance of $500/ounce. The price of silver has been above $7.50/ounce long enough for a 30 day moving average to have exceeded that price for more than 30 days. The Liberty Dollar is doubling its face value.

What does that say about the Liberty Dollar? It says that the silver and gold which each Liberty Dollar warehouse receipt represents are better stores of value than the fiat dollar indicated on the face of those notes. (The Liberty Dollar silver money is moving up from a base of $10 to $20. One does now begin to wonder what the gold Liberty pieces are going to become.) In seven short years from 1998 to 2005, the dollar price of silver has doubled. If 1980's price levels are any gauge, silver may go to fifty 1980 dollars per ounce. In rough numbers, $50 in 1980 are equivalent to more than $200 today.

But, remember last issue? It has been a while, admittedly. In our last issue, we mentioned the work of Robert Landis once again. Inflation has been exported. All those dollars for which there was tremendous demand overseas are coming back to the USA now. That's why the dollar value of the stock market is increasing dramatically. The word is out, hyperinflation is here. Which means that all the dollars created with the stroke of a computer keyboard are coming back to be invested in anything that pays a dividend. Anything that isn't dollars is now in demand, provided it can be bought with dollars.

It is clear that a great deal of pain and suffering is going to ensue as free people convert from worthless government promises (to tax them and bully them) into free market alternatives.

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 (evening Thursday 24 November 2005):

Company Symbol




Almaden AMM.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



- 0.09

Tan Range TRE




Tan Range has hit our first home run. The stock is up four times the value when we suggested you buy it. It is actually our easiest calculation. When we first suggested Tan Range as a buy, it was one Canadian dollar. Now at C$4.07, it is up 407%. We continue to like the underlying value and the excellent prospects for this company. If you sold half your position on the double, you should be very happy with the value the rest of your position has gained.

No news on Luzon, and no movement. The underlying value remains considerably greater than the market price.

Lumina Resources and Northern Peru continue to represent enormous pricing errors in the market. There is excellent underlying value for these stocks. Copper continues to rise in price, though with hyperinflation now raging in earnest, the dollar price of copper has as much or more to do with the freefall in the dollar's value. Even so, higher dollar prices of copper make the market price of these two stocks incredible buying opportunities.

Northgate, our other red mark, has closed its gap considerably. Again, there is excellent underlying value here.

Free Market Money

Gold has now moved firmly higher to $495.70/ounce (Friday 25 November 2005). There is an excellent prospect of $500/ounce gold in the next few weeks. We should see gold well into the $600-$700 range before the Summer doldrums begin in April-May.

Dow stocks gained ground Friday 25 November to close at 10,931.62. At our last report, the Dow:Au ratio stood at 21.91 and a bit more than a month later the ratio is 22.05. So, the Dow's gain is almost entirely inflationary; the tiny shift upward in the Dow:Au ratio is probably due to market exuberance about the current rally.

Oil was $55.16/bbl, and it takes 8.99 barrels to buy an ounce of gold (compared to 7.31 last issue). Evidently the short term crisis in oil brought on by Hurricane Katrina has ended. The long-term crisis in the dollar has not.

Silver has run up to $8.19/ounce. The Au/Ag ratio is up a bit to 60.53. Silver is still under priced at this level, and should continue higher. In spite of recent gains, the ratio has moved further away from our anticipated target of 50.

Copper rose to $2.0128/pound (Friday 25 November 2005). Given the impending collapse of the dollar due to hyperinflation, it seems obvious that we should be tracking copper prices against some other market-determined value mechanism, such as the price of silver or the price of gold. Accordingly, the Ag/Cu ratio would be the number of pounds of copper needed to buy an ounce of silver (or the silver price divided by the copper price, thus Ag/Cu). Today, that ratio stands at 4.068. The related Au/Cu ratio is 246.27.

By way of contrast, at the end of June 2005, the prices were Au $442, Cu $1.6425, Ag $7.19. The corresponding ratios were thus Au/Ag 61.47; Au/Cu 269.1; Ag/Cu 4.38. So, the ratios were all higher in June than they are now. This means it took more ounces of silver to buy an ounce of gold; more pounds of copper to buy an ounce of gold; more pounds of copper to buy an ounce of silver then than it does today. In other words, the same amount of copper today buys more silver and more gold; the same amount of silver today buys more gold but less copper. In a hyperinflation, we expect to see the prices of the lighter metals rise at a faster rate than the prices of the denser metals, and that expectation is being fulfilled.

Zinc is up again to $0.7592/pound. The premium on pre-1982 pennies is now stands at 33.7%. The metal in $100 face value of pre-1982 pennies is worth about $133.71.

Nickel metal was $5.8998 the afternoon of 25 November. Again, as with the price of copper, zinc and nickel (and uranium) should be tracked against free market money, so we'll put together some charts and tables for the next issue.

U3O8 was $34.25/pound as reported from 21 November.

Schlumberger was $97.03 on the afternoon of 25 November. It is up $14.81 (or 18%) since our suggestion.

The four free market money stocks we've suggested in this sector are PVH, GBH, CGB, and MCG. Prices from Fridy 25 November 2005.

Company Symbol gAu
Cyber Gold Bank CGB 0.209


Gold Barter Holdings GBH 0.080

- 0.92

MicroCasino MCG 0.843

+ 0.33

Pecunix Venture Holdings PVH 0.025

- 0.025

Disclaimer: Jim Davidson has organized the acquisition of from Simon "Sidd" Davis. Jim represents the company which made the acquisition as their representative for North America. He has taken the role of chairman of the PVCSE board of directors. A new stock listing, PRV, is anticipated for early December. PRV will be the stock of the Private Venture Capital Stock Exchange itself. More details shall be forthcoming in coming days.

The Gold Casino last sale was 104.95 grams of gold per share.

Space Frontier

Michael Griffin is a liar. He pretends to want commercial space transportation, but refuses to cancel the shuttle program. He asserts, falsely, that it would be just as costly to cancel the shuttle as it would be to continue operating it - in spite of the fact that the shuttle cannot fly as currently configured.

He suggests in his speech before the American Astronautical Society (AAS) that by 2018, when NASA purports to be able to return to the Moon, the Internationalist Space Station will have been completed and will have been supplied by commercial crew rotation transportation services for several years. In his speech, Griffin deliberately ignores the commercial driver for the current vigorous development of commercial space transportation services, not using the word "tourism" even one time.

Griffin wants to allow commercial space companies to develop cargo carrying capabilities to service the space station. Curiously, a previous administrator in the early 1980s wanted to allow commercial space companies to develop upper stages to launch commercial satellites from the shuttle. When NASA proved incompetent to launch the shuttle reliably, President Reagan correctly changed the policy to remove commercial satellites from the shuttle, expecting that private launch alternatives would be developed. However, the companies such as Orbital Sciences, that had relied upon the earlier policy in formulating business plans to develop its expensive Transfer Orbit Stage were left twisting in the wind by this policy shift. Companies which today develop commercial space transportation capabilities to service the space station are going to be disappointing their investors if they rely upon the current policy to remain in place long enough for them to eke out a profit.

NASA's shuttle program has yet to admit that the decision to change to the current foam chemistry from the earlier chloro-fluorocarbon foam was a mistake. Shuttle managers are evidently puzzling over cracks in the foam found after pressurizing an external tank coated with the current foam.

Previously, the space shuttle Columbia was destroyed on re-entry, with the loss of seven lives, due to NASA's incompetent decision to use the new foam in spite of extensive evidence of foam loss and even foam strikes damaging the shuttle's re-entry system. It is believed that a 1.7 pound chunk of foam separated from the Columbia external tank and damaged its wing. The most recent launch of Discovery included the loss of another chunk of foam weighing about a pound. NASA has asserted that workers at NASA contractor Lockheed Martin's Michoud facility damaged the foam with access platforms and cutting tools. However, the cracking foam found in this latest escapade was not touched by access platforms nor by cutting tools.

NASA engineers are considering various ways to mitigate the foam loss problem, including leaving the external tank's liquid hydrogen protuberance unprotected from airflow by removing its air load ramp entirely. Other approaches include a new manual foam application process and a new robotic foam application process. It is apparently beyond their wit to go back to the foam used successfully on dozens and dozens of flights.

Griffin says that it is vital to have US government systems (and non-military systems) for crew and cargo launch. In particularly, he says, "[Our] approach allows us to meet lunar return mission requirements with US government systems - no external entities are in the critical path for mission accomplishment - it does not exclude such entities, and indeed provides several 'hooks' and 'scars' by which their services can be used to facilitate or enhance the mission." But, he's being disingenuous, at best.

First off, he can't get a crew to the Internationalist Socialist Space Station without "external entities." The shuttle fleet is grounded, and there is no evidence it can be safe to fly as currently configured. (There is no evidence that the arrogant fools at NASA are going to return to flight using the known, workable, earlier foam chemistry.) Indeed, in his same speech, Griffin praises Congress for reducing restrictions on having Russia launch American astronauts to the space station. He admits that without Russia there is no way "to ensure the continuous presence of American astronauts on the station." NASA cannot put humans in Low Earth Orbit today.

NASA cannot put humans in Low Earth Orbit with government systems developed at great expense (by some estimates as much as $14 billion before the first flight in 1981), operated at great expense for 24 years (by our rough estimate, $5 billion per year whether any shuttles flew or not, so about $120 billion); redesigned after Challenger at considerable cost, with a hiatus in scientific and commercial spacecraft launches resulting in a tremendous economic opportunity for Europe's Arianespace; and after the loss of fourteen shuttle crew, numerous ground crew, and other lives at contractor facilities. NASA has demanded lives and treasure for its shuttle fleet, but is incompetent to fly the shuttles. Yet, Griffin demands more money so that government contractors may develop a government designed Crew Exploration Vehicle and have it ready to launch by 2012.

Every time NASA refuses to step aside, its policies have a chilling effect on investor confidence in the private sector. Every time NASA announces a policy to supposedly encourage the private sector, shrewd observers of the past cringe in fear that honest individuals may take NASA at its word. Yet, time and again, since the 1950s, NASA and the government have thwarted private space launch efforts. Time and again, NASA has established policies to undercut "competitors," to offer free launches to nearly all comers, to embarrass the private sector operators whenever possible, and to insist that technologies being developed in the private sector won't work or cannot be profitable.

Michael Griffin should get down on his knees, cover his head with ashes, put on a hair shirt, and beg forgiveness for forty-seven years of NASA abuses, insults, and deceptions perpetrated against the private sector launch industry. As his first act of contrition, Griffin should shut down the shuttle program, distribute the remaining shuttles to museums, and auction off the remaining hardware. As his second act of contrition, Griffin should cancel the Crew Exploration Vehicle program. As his third act of contrition, and his first constructive act toward a better future, Griffin should establish a policy that all NASA spacecraft, crew, and supply payloads are to be launched by the private sector.

Were these policies to be adopted, the private sector would respond rapidly and overwhelmingly. During any brief gap of launch capability, Russia, Europe's Arianespace, China, and India could be called upon to supply space launch capabilities.

Of course, no such policy is going to be adopted. Griffin does not have the integrity to admit that NASA is not only incompetent to fly the shuttle safely, but the wrong sort of agency to develop low cost access to space. He admits that routine, cheap access to space is desirable; he admits that the free market is the mechanism by which routine operations are made inexpensive; he refuses to take the actions necessary to encourage the private sector to engage in competitive space transportation; he is determined to have a government-only capability at any cost in lives and at any cost in treasure. Therefore, he is a hypocrite, at best. At worst, he is a malicious, evil, liar who seeks to thwart all private commercial space activity, just as each and every one of his predecessors managed to do.

NASA delenda est.

News Flash! The Japanese Aerospace Exploration Agency (JAXA) announced Friday evening (Tokyo time) that the Hayabusa space probe has successfully landed on the asteroid Itokawa. The spacecraft is expected to obtain samples and return to Earth in June 2007. The probe was launched in May 2003. It is on an asteroid which orbits the Sun between Earth and Mars. The low-energy trajectory involves traveling 180 million miles on the return journey, which is slated to begin in early December 2005. The target asteroid is named for Hideo Itokawa, a famous Japanese rocket scientist of yore.

SpaceDev closed at $1.62 on Friday 25 November 2005. It was up twelve cents from our first suggestion. SpaceDev has ordered a Falcon launch vehicle from SpaceX of El Segundo, California. SpaceX is the space start-up organized by Elon Musk, discussed below under Launch Tech.

We discussed shorting airline stocks. It now seems very clear that this strategy only works in time with higher oil prices. Delta Airlines has continued to fall. It opened Friday 25 Nov at $0.58, down 32.5% from our first suggestion. The other stocks we've been tracking have all gone up from our initial suggestion. We'll keep monitoring and let you know when the strategy seems like a good idea, again, if ever.

Launch Technology

There are a bunch of things wrong with the idea of using a military base for commercial space launches. Among many other things, the military is, by its very nature, an organization dedicated to the enslavement of individuals. Or as Edward Gibbon wrote, about two centuries ago, "The temper of soldiers, habituated at once to violence and slavery, renders them very unfit guardians..." of a legal or civil contract of any sort.

So the USA Army has seen fit to support SpaceX's plans to use Kwajalein Atoll to launch its Falcon 1 rocket by delaying the launch by 24 hours. Why? Well, er, to launch some missile defense system tests? Well, no, not exactly. To prepare to launch some missile defense test? Well, no, not to prepare for a launch, but to "facilitate preparations for a missile defense launch."

The private sector being generally competent and inclined to promptly inform interested persons of pressing schedule matters, it seems likely that the late Thursday release of this information was as fast as possible. In turn, that suggests that the Army decided to squash the Friday launch schedule on Thursday. Nice.

Kwaj is literally thousands of miles from the mainland of North America. Thus, a rocket company such as SpaceX, based in California, has an enormous logistics tail from Kwaj to California. Logistics have played a key role in several rocket launch failures, including at least one early commercial space launch attempt (Percheron, 1981). If that were not sufficient deterrent, Kwaj has a corroding atmosphere very inimical to delicate space-related hardware. Worst of all, it is infested with military men and bureau-rats.

While it is no doubt advantageous to the military men who seek to thwart all efforts to have a published accounting of how every dollar is spent from the treasury (Article One, Section 9, paragraph 7, USA constitution) to have a missile launch site miles from everywhere, off the major shipping lanes, deep in the heart of the Pacific Ocean, it seems economically untenable for commercial launches. One of the major attractions for Kwaj was apparently that it wasn't Vandenberg, where other scheduling conflicts have been imposed by the military.

Mind you, SpaceX is presumably married to the military. Its customer for the current launch is the US Air Force Academy which built "FalconSat 2" to monitor the effect of space plasma on satellite communications. SpaceX has also won a military contract reportedly worth up to $100 million for small-scale launches through 2010. Anyone planning to use SpaceX to launch a commercial satellite should be aware of this close tie to the military industrial complex.

An attraction of the Falon 1 is its price tag of $6.7 million for the launch. Other established competitors are charging much more for comparable payload to orbit. So, if it works, it would be a good deal. SpaceX is also developing a heavier version which is to be fully reusable; Falcon 1 is partially reusable.

To their credit, SpaceX principals have not been quiet participants in the greed and gluttony usually attendant on defense contracts which typically presume silence on all matters relating to other defense contractors swilling gruel at the same trough. In particular, SpaceX has filed suit alleging that Lockheed Martin and Boeing are engaged in an illegal combine in restraint of trade under the anti-trust laws. Boeing and Lock-Mart have formed a joint venture to attempt to get all government launch contracts consolidated under one venture - apparently because the government is still convinced that competition and free market economics don't work. (Note to Pentagon analysts: please review 70 years of Soviet economic ineptitude. Try not to repeat their mistakes.)

NASA delenda est.

New Country Developments

In a scene that sounds reminiscent of the strike of the productive in Ayn Rand's Atlas Shrugged, the people of Macao brought the government to its knees. They stopped paying taxes, providing services, and selling to the Portuguese rulers. Within two months, their demands were met and the government apologized.

Historically, Macao is an interesting place. In AD 1277 some 50,000 refugees from the invading Mongols fled South to the islands and peninsula of Macao. They were able to defend themselves there, much as the Venetians who had fled from the "barbarians" that were conquering Rome. Although Macao is largely flat, it includes very large areas recovered from the sea, much like Holland in this respect.

The name Macao is the original Portuguese spelling of the city. In contemporary Portuguese, the spelling is Macau. The government of Macao considers "Macao" to be the official English spelling. The name refers to the Temple of A-Ma and the Chinese word for "gates" or "inlet." The place is also known as Haojing'ao or "Oyster-mirror inlet."

The Temple of A-Ma was built by the Chinese locals in 1448, dedicated to the goddess Matsu. Matsu in the Tao religion is the goddess of the sea who protects fishermen and sailors. This particular deity reflects the ascension of a mortal woman, according to local tradition, who was born in AD 960. She is reputed to have saved many sailors' lives, including those of her brothers during her life. Various legends surround her ascension.

Macau is doing very well economically. It is one of those golden-egg laying geese with which the imperial authorities of the People's Republic of China are presently wise enough not to trouble.

Official statistics record a drop in the jobless rate to 4.1 percent for the period between August and October, a drop from the previous year of 0.4%. The economy is booming, with GDP up 28% in 2004 and expected to be around 8% in both 2005 and 2006. Much of that growth is due to gambling and tourism.

Venetian Macau Limited is now marketing the senior secured credit facility to finance $2.5 billion for its new casino venture in Macau. Macau wisely abandoned the 42-year monopoly policy toward casinos in 2001 and is encouraging the wealth formation attendant on the "casino effect" with all its powers. (The casino effect is simply the observation that when more casinos are next to each other, they bring in more tourists and gamblers, rather than dividing a finite market. The growth of Las Vegas is almost entirely due to the casino effect and the ease with which gaming licenses are obtained there.)

If you like the idea of investing in Macau, consider Venetian Macau, a subsidary of Las Vegas Sands Corp - LVS on the NYSE. Currently trading at $44.65, Las Vegas Sands owns the Venetian Resort Hotel Casino in Las Vegas, the Sands Expo and Convention Center, and the Sands Macao. They are also developing the Palazzo in Vegas and the Venetian Macau.

Another Macao casino is the Singapore Galaxy, which is planning a $500 million bond and note offering to fund its casino construction. They have one of three casino licenses in Macao. Their investment bankers on the debt offering are Merrill Lynch and Morgan Stanley. Galaxy opened their Waldo casino in Macao last July. We gather they generated US$16.4 million in 2004 and $88.4 million in the first six months of 2005, though we're not clear whether this latter figure is USA or Hong Kong dollars.

Now, Macao is not new. It has been the site where archaelogists have found Chinese cultural artifacts dating back to some 6,000 years ago. Nor is it entirely its own country. In 1974, the leftist government of Portugal attempted to hand Macao over to China, but the PRC refused to accept the obligation to administer the territory. In 1979, formal diplomatic relations were opened between Portugal and China with Macao recognized as Chinese territory under Portuguese administration. In 1987, the two sides agreed to have Macao returned to China as a Special Administrative Region which took place on 20 December 1999. Under the "one country, two systems" formula, China continues to have a "socialist" system (wherever it is not more practical to have capitalism) and Macao enjoys autonomy in everything except foreign policy and defense policy at least through 2049.

So, it isn't new, and it isn't its own country. Why are we talking about it here?

First, Macao is an obvious break-off in a future fragmentation of the Chinese empire. Second, Macao is an economically successful sovereign dependency. Third, it has its own country code top level domain .mo, its own currency, its own territory, control of its borders, and a thriving gambling industry. It is probably good for more than just gambling and a bit of tourism. Besides, every country isn't going to be a world superpower of sovereign individuals. Yet.

Next issue, Taiwan. Then Tibet. Then the Himalayas.


    "Based on FDA's review of the strength of the total body of publicly available scientific evidence for a claim about green tea and reduced risk of prostate cancer, FDA ranks this evidence as the lowest level for a qualified health claim. For the reasons given above, FDA concludes that it is highly unlikely that green tea reduces the risk of prostate cancer."

    - FDA report on green tea beverages

In a controlled study, men with pre-malignant prostate disease were given either 600 milligrams per day of green tea extract or a placebo. Compared to those receiving the placebo, the men receiving the green tea extract supplements were 90% less likely to develop prostate cancer.

We've reported on that study previously in this newsletter. That study was available to the Food and Drug Administration at the time they released their report on green tea. Evidently, the FDA would rather have men die by the thousands suffering horribly from painful malignant prostate cancer than identify green tea extracts as a valid form of treatment.

The House of Representatives has a bill, HR 2352 which amends the Food, Drug, and Cosmetic act to ensure that accurate health claims are not suppressed, that consumers are given truthful and complete information on the benefits of food supplements, and to ensure that the FDA does not censor accurate health claims. This proposed legislation is absurd, since it puts the FDA in the position of establishing what is and is not an accurate health claim, something they are incompetent to do; were they competent to do so they've shown an aggressive tendency to disregard accurate information available to them. I have a better idea.

My better idea is to eliminate the FDA. First, Congress should cease all funding for the FDA and demand that the agency be shut down. Second, Congress should hold hearings on the deaths caused by the FDA censoring information in violation of the First Amendment, denying useful treatments for years and in some cases decades, and licensing dangerous drugs like Vioxx. Then everyone who ever worked for the FDA should be tried as accessories to murder (for approving drugs that kill) or manslaughter (for refusing approval for drugs that work).

But, since neither of these things are going to happen, information about food supplements will continue to circulate on the Internet. Some sites should be hosted offshore to provide jurisdictional diversification of political risk.

Eventually, rigid, whorish, corrupt agencies like the FDA are going to cease to exist because the corrupt, hyperinflationary monetary system of the United States is going to collapse, and people are going to rebel and revolt and convert to silver and gold free market money.

Until then, remember, the FDA is with the government, so they are here to hurt you.

FDA delenda est.

Legislatura delenda est.

Here's how our stock suggestions in the nanotechnology and life extension sector look right now (morning Tuesday 29 November 2005).

Company Symbol US$ delta
CytRx CYTR 0.93 0.03
Accelrys ACCL 7.68 1.07
Dendreon DNDN 5.84 0.52
Elan Corp. ELN 10.50 3.27

Things seem to be going well with our longs. We're very late (very, very late) with this issue, so we'll review these stocks next issue.

We casually mentioned the idea of shorting Pfizer and other major drug makers at the end of May. Pfizer was $21.69 on the open on the 29th, down 23.52% since our suggestion. Merck is off 7.5% in the same period.

Publication Note: This issue is our fiftieth. Thanks for seeing us through to this point. We regret the extreme delay due to press of other business. Mergers and acquisitions are fun! But time consuming.

Gratuitous example of bizarre legislation: See the longevity section for another really bad idea. It isn't like the FDA has any interest in protecting consumers. The FDA protects drug makers because the staff of the FDA can often get hired by major drug makers when they are ready to retire. The only rule needed for protecting consumer access to accurate information is the First Amendment and the free market. Congress is asinine in saying the FDA should be set the task of ensuring that accurate information isn't censored. Accurate information won't be censored in a free market, but Congress won't ever admit that it is unneeded and counter-productive.


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