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The Indomitus Report
Volume 3, #1

9 January 2006

Being Sovereign

      "Civilization is the progress toward a society of privacy. The savage's whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men."

      - Ayn Rand, The Fountainhead, 1943

As the new year begins, at least as far as Sixteenth Century and subsequent European tradition is concerned, it would be well to review some of the things we believe are right. We are engaged in an identifiable culture war between an existing culture of death, theft, and corruption against a new culture of life, private property, and freedom. It would be well to examine some of the hallmarks of the two cultures.

It seems to me that the single value that does the most to distinguish the two cultures is ownership of private property. In our culture, the free market ideal of which David Friedman spoke at Freedom Summit, to own things is basic, right, good, and true. In their culture, property is contingent, wrong, evil, and false.

Since the acme of their culture was 1969, and since their cultural concepts were developed in the period from 1815 to 1848 and gained widespread acceptance thereafter, being entirely discredited by 1989, we can view these concepts as relating to the period from roughly 1845 to 1989. The wars, genocides, and governmental excesses of socialism, communism, totalitarianism, and imperialism during those years are the indictment of their culture, the evidence against them, and the clarion cry for a better way. Something over a billion lives were exterminated in the name of nationalism, socialism, communism, and imperialism in China, Russia, the United States, Europe, Africa, Asia, and the Pacific. These honored dead stand in the witness box in testimony against the culture of death, theft, and the omnipotent state.

One way to judge things is to look at words. Words of one syllable are simple, common, easily understood, basic, and often describe ideas that are so vital, so cherished, recognized so early that very small, short sounds were assigned to them. Ma. Pa. Milk. Good. Bad. My. Your. Hers. His. Own.

Ideas become more complex as we build upon older concepts. Sometimes people go in a useful direction and build up a series of better and better ideas on the structures laid down before. Technological progress is an example of building new capabilities with tools developed previously. New tools lead to new techniques which lead to new abilities which make it possible to build newer tools. Thus it is possible to go from a largely agrarian Fifteenth Century culture with the merest beginnings of celestial navigation across oceans to a globe spanning culture which can routinely access Earth orbit, and has reached beyond the heliopause with spacecraft.

However, not all ideas are equally good. It follows that ideas built upon a structure of error, wrongness, poor concepts, or base and evil notions may create superstructures that are not stable, not worthy, and although making some basis for further extension, cannot produce good results.

It then follows that we ought to have a method by which to judge which ideas are good and which bad, which supporting good structures and leading on to a better world, which supporting bad methods with worse results, which identifiably evil and promoting malice, horror, and madness. Happily, there are effective tools for this purpose.

One of the oldest is to judge the tree by its fruit. It is not possible for a good tree to bring forth corrupt fruit. A good tree has to have goodness all the way through. If the fruit is tasty, delicious, nutritious, healthful, and life affirming, then we may speak well of this tree. If the fruit is foul, putrid, disgusting, or poisonous, we should know the tree for a source of badness. Jesus taught this lesson thousands of years ago, and it is as true today.

So, look at socialism, communism, totalitarianism, the denial of private property, the rise of the supposedly omnipotent state. What fruit has it brought? It has brought genocide, warfare, torture, outrage, and horror. In the period from 1845 to 1989, something over a billion people were massacred in wars of imperial conquest, in wars of extermination, and in genocidal slaughter. Sometimes it was an idea such as individual liberty, sometimes it was a process like intellectual inquiry, oftentimes it was a particular ethnicity such as Native Americans, Armenians, Jews, Slavs, and sometimes a religious minority such as Mormons, Branch Davidians, Jews, Muslims, Buddhists, or Christians who were the targets of massacres and pogroms.

Certainly these activities are not unique to the socialists. Indeed, they simply extended on concepts from the Catholic Inquisition, from the westward expansion of the Mongols, and from earlier imperial madness. But, they carried the idea further, with greater fervor, and they industrialized slaughter. By their fruits shall ye know them. By their fruits, socialists are thieves, murderers, and scoundrels. By their own behavior, they endorse and support corrupt, evil, brutal institutions of total, centralized power.

There is a better way. Wholesome, good, friendly, decentralized institutions are better. These ideals arise under free markets, where individual liberty and private property are held in high regard.

One of the outcomes of many technological developments is greater privacy. Greater privacy is a good thing. The less others know about what I do, the better I like it.

Now, some of the technology developed to enhance privacy has been developed to bring certain vices out of the public eye and into private homes. A widely discussed example is pornography. For various reasons, many people don't like to view naughty pictures in front of a random assortment of people they know and don't know. So, a large number of systems have been built to move away from slime-seated, run down theaters in the less desirable parts of town and provide access to similar sounds and images in the privacy of homes.

Among the technologies that have served this purpose of greater privacy are video cassette players, video compression algorithms, and high speed network connections. Now, it is rational to question whether this fruit is good. But, take a look at Times Square. Previously the site of dozens of porno theaters, it has been totally revitalized with mainstream businesses. Dozens of property owners in cities all over have been able to replace porn theaters with more profitable tenants. Real estate values have risen in many of these places. Crime has dropped in many of these places.

Similar privacy developments have allowed people to engage in banking, gambling, and many other activities in the privacy of their homes, with people they choose to invite over, or in solitude. Even certain types of shopping have come home. These developments allow people greater ranges of choice not only in where they engage in certain behaviors, but whether and how they do so.

Suppose one were to regard some of these activities, such as viewing porn or online gambling as bad behaviors, in themselves wrong? Is it therefore better to have such behaviors out in public where they can be the subject of scrutiny, or in private where no one need be the wiser? It is tempting to suggest that privacy is bad in that it supports sinful behavior in private, but just the opposite is true.

In fact, public pressure against these behaviors has not proven effective. Banning certain films in Boston has not resulted in fewer such films being made, but, rather, having "banned in Boston" become an advertising slogan. Prohibition did not reduce alcohol consumption, but, instead, promoted not only greater consumption of alcohol but also greater organized crime syndicates and a much greater police state. Prohibition is gone, but the crime bosses and police statists remain.

Embarrassing people, yelling at them in public, carrying signs, and similar activities don't encourage reflection on the nature of the behavior being condemned. Rather, such activities make people more determined to do these things, often in defiance of contrary opinion. Instead, a more workable approach is to bring the best arguments against a certain activity out into the light, use reason and logic and calm, rather than shouting and raging and name-calling and emotion to present the case for change.

Changes in this sort of behavior have to be undertaken individually. Asserting a societal need to impose moral standards does not encourage individuals to change their ways, but, rather, to hide their ways. In failing to generate actual change or redeem individual souls, those who publicly proclaim their righteousness and publicly condemn certain behaviors are engaged in unwholesome hypocrisy, asserting that they are against something while deliberately being ineffective in opposing it.

So, there are good values, good ideas. Private property, individual liberty, privacy, technology development, an open interest in further inquiry, and knowledge are all positive things. Much may be built upon these concepts, and the fruit of such developments is often excellent.

Do we individuals who hew to such views always and in every particular uphold these values? No. It would be great if perfect people could show us the way to perfection, but people aren't perfect. People are fallible. They err, and sometimes learn from their errors.

Since I hold that certain ideas are right and true and better, then, when I fail to completely uphold those ideals, am I being a hypocrite? Sure. But, such hypocrisy is remediable. One can cure instances of hypocrisy in one's behavior, and improve. One can come closer to the ideal which one seeks to uphold.

But, if one abandons moral positions for relativism, if one denies that right and wrong are absolute, if one asserts that all ethics are irrelevant, if one maintains that any behavior, no matter how horrid, is acceptable in certain contexts, then hypocrisy seems like the most important consideration. Moral relativism is not remediable, cannot be improved upon, offers no room for positive change. Indeed, without the basic guidance of right and wrong, the moral relativist cannot even measure progress. Indeed, if one cannot recognize that mass murder is wrong, that theft is wrong, that statism is evil, then one is utterly lost to any good. Only by coming to grips with values and accepting that some things are evil and to be avoided is it possible to establish a better world, or even know progress when it occurs.

At its heart, new year's in January makes very little sense. Previous traditions have regarded the Winter solstice as the date for renewal, since the Sun's path in the sky changes on that date. Other traditions have regarded the Spring equinox as the date for calendar renewal, relating to the renewal of many plants. In line with these propositions, Christmas Day is closer to the solstice, and Easter is associated with the equinox.

For my own part, I like 19 April. On 19 April 1775, men of the North American colonies stood up and defended their freedom by shooting their oppressors. They stood in front of their arsenals and defended their freedom to be armed in defense of their other liberties. At Lexington and at Concord, these men defied tyranny and stood together for liberty, free markets, and private property. It is said that the first shot they fired was heard 'round the world, not only by tyrants but by other oppressed people who chose then to be free.

In a future essay, I should like to consider whether socialism and communism support the oppressed, or support a structured society as favored by aristocrats and monarchists. But, the new year abounds with promises to keep, and I've miles to go before I sleep.

Free Market Money

      "Gold needs no endorsement. It can be tested with scales and acids. The recipient of gold does not have to trust the government stamp upon it, if he does not trust the government that stamped it. No act of faith is called for when gold is used in payments, and no compulsion is required."

      - Benjamin McAlester Anderson, Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946, 1948

Gold and silver are free market money. Each one has the properties needed to make it useful and acceptable anywhere in the world, anywhere in the universe. Since gold and silver are acceptable, there is no question that they represent universal currencies.

National currencies may be universally acceptable for a time. Certainly, the USA dollar is currently accepted all over the world. However, as with all fiat currencies, the dollar inflates. As it inflates, there is necessarily some risk of hyperinflation. Presently, this risk seems to be very high, now three and a half decades since the last tie between the gold and dollar was severed.

There's no question that the dollar is in trouble. Equally, the government that makes the dollar is in trouble. The USA is over-extended, run by corrupt politicians, deficit spending like an out-of-control teenager with a brand new checkbook, and beginning to see serious technological challenges to its confiscatory tax structure. The lies told to get the country into the war in Iraq are being exposed, and in response the Bush Administration is threatening a nuclear confrontation with Iran.

Hyperinflation in 2006 through 2008 is my expectation. Helicopter-money Bernanke is not going to be credible in responding to inflation, and higher interest rates are going to cripple the economy long before they restore enthusiasm for USA bond instruments.

There does not appear to be anything to do to avert hyperinflation. All the signals are consistent with previous episodes in Yugoslavia, the Republic of China, Weimar Germany, the Confederacy, Revolutionary France, Revolutionary America, and Khanate China.

There is, however, still time to prepare. There remain good values in gold mining stocks, good values in gold-denominated shares, and gold and silver coins and bullion remain a good value even at today's prices.

Gold Mining

Here's how the stocks we presently suggest in this area look of late (Friday evening 13 January 2006):

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




Tan Range TRE




Our stock picks in this sector have done well. At the upcoming Vancouver conference, we anticipate identifying more good companies for your investment dollars.

Almaden looks set to double. Western Prospector has rounded third and is heading for a home run. Pinnacle is a solid double. Northern Peru is set to double, as the market wakes up to the underlying value of resources involved; the story on Lumina Resources has not caught on as fast, but it is re-gaining lost ground. The other stocks in our set have turned in solid performances, with Tan Range being the top performer and Luzon holding the curve back.

The Apex Silver story has not been all positive. We're aware of concerns raised by Ted Butler that Apex sold quite a bit of mine production in Third Quarter 2005. Ted reports that Apex sold two years of production of zinc and lead, along with six months production of silver. These production figures are presumably anticipated production, since Apex is not yet producing. It also seems likely that Apex made the sale to raise cash. This behavior is certainly troublesome, and with the rise in commodity prices in 4th Quarter 2005, significant losses may be anticipated. The market seems to be discounting Apex a bit, which may be due to the political situation in Bolivia (socialists back on top) or concerns over this forward selling behavior. The underlying value remains sound, and the political risk is not unambiguous. There are many reasons to suppose that Bolivia's current socialist plurality is going to be rejected politically just as every other group that has tried to rule Bolivia has been.

Free Market Money

Gold closed on Friday the 13th above $555. That was my gratuitous target for 31 December, so I was only off by two weeks. The close at $556.50 hasn't been matched in 25 years. January 1981 was the last time gold prices were this high. Gold is going higher in the next few months, and I would not be surprised to see it close above $700 before the Summer doldrums. Equally, I would be very surprised by a close below $800 at year's end. I would not find gold above $1000 this year to be surprising but I would be alarmed at hyperinflation bringing gold as high as $2000 this calendar year. Keep in mind that on an inflation adjusted basis, the 2005 dollar price of gold in January 1980 was $2,176 per ounce. Gold is still very cheap in current dollars. See Adam Hamilton's excellent analysis at

Dow stocks ran up over 11,000 last week, but it is all inflation. The average lost ground Friday the 13th to close at 10,959.87. The Dow:Au ratio is now down to 19.69. Note that fewer than 20 ounces of gold are needed to buy the Dow today. This value is going to descend until it reaches 3 ounces or less.

Oil was $63.95/bbl in the spot market for West Texas Intermediate on Friday the 13th, and it takes 8.7 barrels to buy an ounce of gold.

Silver hit $9.16 per ounce and closed Friday at $9.09. The Au/Ag ratio is much higher at 61.22. Silver is under priced at this level, and should continue higher. Keep in mind that the inflation-adjusted figure for 1980's peak at $50/ounce 1980 dollars is about $128 in 2005 currency.

Copper closed Friday 13 January 2006 at $2.1373 per pound. Ag/Cu ratio stands at 4.253. The related Au/Cu ratio is 260.38.

Zinc is up again to $0.93/pound. The premium on pre-1982 pennies is now stands at 42%. The metal in $100 face value of pre-1982 pennies is worth about $142.40.

Nickel metal closed at $6.58/pound. The USA nickel coin, which is 75% copper and 25% nickel is showing a 28% deficit to face value. The metal content in the nickel is worth about 3.58 cents. This value has been increasing, and cross-over may come this year ($8/lb nickel and $3.50/pound copper would do it).

U3O8 was $36.50/pound as reported from 9 January 2006.

Schlumberger was $107.28 on the close Friday 13 January. It is up $25.06 (or 30%) since our suggestion.

The four free market money stocks we've suggested in this sector are PVH, GBH, CGB, and MCG. Prices from Saturday 14 January 2006.

Company Symbol gAu
Cyber Gold Bank CGB 0.146


Gold Barter Holdings GBH 0.090

- 0.91

MicroCasino MCG 0.650

+ 0.137



Pecunix Venture Holdings PVH 0.019

- 0.031

Cyber Gold Bank is our winner in this group. The double in December was followed by a 2:1 share split. Including the split, our initial position's value is about 275% higher.

The Gold Casino last sale was 104.25 grams of gold per share on 14 January 2006. These shares are over $1923 each at current gold prices. On Saturday, management of The Gold Casino announced plans to split the shares 100:1 to increase the number of shares in trade and generate more activity on You should expect the shares to trade up from 1.04 grams to around 2 grams each in coming months.

Space Frontier

The California Institute of Technology's Jet Propulsion Laboratory in Pasadena, California - as clear a candidate for transferring NASA activities to the university sector as exists - has had another success. This time they've captured comet material and returned it to Earth. Their cometary probe returned material on 15 January 2006 at 04:10 Central time.

Launched in February 1999, the Stardust mission began collecting space dust a year later. It executed a gravity assist maneuver using Earth to slingshot further out in the Solar System in January 2001. In August 2002, it began collecting more space dust, purportedly interstellar dust (from within the Solar System, so, the interstellar nature would seem to be conjectural at best) followed by a flyby of the asteroid Anne Frank in November 2002 and an encounter with comet Wild 2 in January 2004. Now its collection of stuff is back on Earth.

The Stardust mission is only the fourth in the NASA Discovery series. The others were Lunar Prospector, a mission that I was involved in very early on, the Near Earth Asteroid Rendezvous, and Mars Pathfinder. It is a substantive indictment of NASA and the entire taxpayer funding of science concept that only four of these innovative and low-cost science missions have been funded.

In 1988, I helped organize a "Lunar Polar Probe" conference in Houston, Texas. The conference was held in 1989 and inspired a good deal of work on various lunar missions. We also managed to raise thousands of dollars to support Alan Binder's quest for a lunar polar orbiting probe, which became the Lunar Prospector project. Space Studies Institute got involved, and various political machinations followed, ultimately resulting in the project becoming a successful mission funded by NASA.

The guys at JPL began their design work on Stardust in the early 1980s. Discussions of the importance of near Earth asteroids, including Earth-orbit crossing asteroids and the usefulness of a mission to such a celestial body were first bruited about in the late 1960s. And, of course, low cost missions to Mars have been a topic of considerable interest since the late 1970s when a bunch of us were working hard to convince NASA not to turn off the working Viking landers in an effort to scrounge up funds for their ill-fated space shuttle program.

What's idiotic here is the time scale. It shouldn't take decades from the conception of a space science project to its execution. It shouldn't require the entire 40 year career of a scientist to come up with an idea, fight for funding, get the mission flown, and analyze the results.

Far more science missions would be flown if funding were not political. NASA funding itself is the worst sort of science funding, since NASA is hateful and putrescent, shunning peer review and other traditional scientific methods. But all taxpayer funding of science is unnecessary and would be irrelevant if the thieving socialist scum in charge of science policy would only admit it. Commercial sponsorship for numerous space missions, including various Planetary Society endeavors and actual flying spacecraft, demonstrates a much better mechanism for funding. Better for future science missions to be funded by such forward-thinking outfits as the Golden Palace online casino (which funded the da Vinci project manned space system) rather than by the liberty-thwarting communists involved in government.

In other space news, samples of Moon rocks and meteorites were stolen from a vehicle in Virginia Beach, Virginia. The marketing of lunar samples is, of course, anathema to NASA, so it is hard to say how they've been valued at 10 times their weight in the highest-quality diamonds. Certainly, that isn't the replacement cost, given low-cost sample return missions available from Russian space companies. It is indicative, however, of NASA's incompetence at safeguarding the national treasures that cost the lives of three astronauts (Grissom, Chaffee, and White) and hundreds of billions of 2006 dollars to obtain.

NASA delenda est.

SpaceDev closed at $1.47 on Friday 13 January. It was down three cents from our first suggestion.

Launch Technology

The satellite is AGILE from Italy. AGILE is an acronym, in Italian of course, which works out to "light imager for gamma ray astrophysics." It is a scientific satellite observing energy in the range of 30 to 50 Mega electron volts (MeV).

In April 2006, a geosynchronous satellite launch vehicle (GSLV) will launch INSAT 4C. Presumably this INSAT system is an India satellite so the GSLV launch should not be seen as essentially commercial. However, the intention to offer commercial satellite launches, beginning with the AGILE launch is clear.

Chairman Nair has apparently characterized this launch as "fully commercial" which, we gather, is in the sense that the heavily taxpayer subsidized Arianespace or the early 1980s NASA shuttle launches of satellites were "fully commercial." However, in the interests of lowering costs to Earth orbit, the current bottleneck for all space activities, the entry of the Indian Space Research Organization (ISRO) should be seen as a positive.

India has been working on an air breathing engine for first stage propulsion with Russian technology companies. A ten second ground level test occurred late last year.

Somewhat more ambiguous news from India indicates that there are policy interests now advocating the development of a manned space program. No doubt there are huge opportunities for taxpayer funded boondoggles in that arena. It seems irrational for nationalist socialist manned space programs to be funded further given the evident ability of space tourism companies to put people in space. But, politics is not rational - clearly a statement about politics which may win prizes for understatement of the century.

NASA delenda est.

New Country Developments

There is disputed territory in the mountains of the Karakoram Range. This range represents a division of watersheds, and has a very high altitude throughout the disputed region, averaging as much as 17,000 feet. As British colonial governor of Ladakh, Drew noted of the border, "There has been no authoritative demarcation of it at all; and as the country is quite uninhabited for more than a hundred miles east and west and north and south, I cannot apply the principles of representing the state of actual occupation."

What passes for British identification of local indigenous residents of any region has never been very good, and certainly in the 1870s for a British governor to say a region is uninhabited would have to be taken with a large grain of salt. However, the British were reasonably good at making surveys. In the Aksai Chin area, though, they didn't really care where the actual boundaries were. The area was simply a buffer among British interests in India, Lama interests in Tibet, Chinese interests in Sinkiang, and Russian interests to the north.

China's government sent a mission from Sinkiang to the summit of Karakoram Pass in 1892, which placed a stone pillar and wooden boundary notice at the peak. The British colonial government in India didn't take any notice of the marker until 1907. However, in typical British fashion, their diplomats produced a map of purportedly Russian provenance showing the border far to the north, placing Aksai Chin in the territory of Kashmir. China in turn sent a survey team to Aksai Chin, showing the Karakoram range as the Sino-Indian border with Aksai Chin in China.

The dispute would not have lasted into the 21st Century had the work of George Macartney not been thwarted. Macartney was fluent in Chinese. As the British representative in Kashgar, he brought the issue of the disputed border to the leading Chinese official in that region in 1896. In their discussions, the two concluded that the Aksai Chin region was Chinese as far South as the Lokzhung Range. In Summer 1898, their line of demarcation was included in a definite proposal by Lord Elgin's government of India to the Chinese empire.

Regrettably, or lazily, the British didn't include a map, but did include a description. Given the uninhabited nature and extremely difficult terrain of the border, physical demarcation on the ground was also neglected. The Elgin proposal described a line from the Karakoram Pass along the crests of the range due east, then turning South to a little below the 35th Parallel, then along a line of "hills" running northeast to Kizil Jilga, then Southeast along the "Lak Tsung" range. Really, the use of the term hills in such mountainous country is thorough understatement.

This proposal reached the Chinese Department of External Affairs in Peking on 14 March 1899 by the hands of Sir Claude MacDonald, the British minister to China. The Sinkiang provincial government raised no objection to the boundary, nor to the proposal to leave the crests of these mountains unmarked as a "natural frontier." (Clearly, there is something natural about mountains, but nothing natural in choosing one set of mountain crests or another. Having traveled in several places where a border is a seemingly arbitrary set of mountains, my experience is that such borders are porous and the locus of much free market commerce.)

Also regrettable is the failure to send a formal acceptance of this proposed line. A subsequently controversial road built to supply the Chinese military in the region was well inside the Chinese border as defined in the proposal - possibly a proposal on which the subsequent Chinese government relied in establishing its claim to Aksai Chin. But, the Chinese government never formally accepted the proposed line, and the British decided that a more northern boundary in Kashmir would increase the buffer between British India and the Russian Empire. British policy became a line which included Aksai Chin as territory of India. In October 1962, the region became the flash point for full scale war between India and China.

The Chinese won the war, declared a cease-fire in November 1962, and captured all of Aksai Chin. Although the region remains encircled in a "disputed boundary" line on Western maps, it is firmly in the hands of China. The de facto border places all of Aksai Chin within China.

Also at the time of the 1962 war were minor border disputes in the Niti Pass, Nilang, and Spiti regions. However, these disputed areas were very small, consisting of about 200 square miles. Aksai Chin, in contrast, is over 15,000 square miles - though notably of very high altitude, low rainfall, limited population, and difficult terrain in all cases.

The people in the Nilang foothills in particular practiced a sort of Alsace-Lorraine behavior of allegiance to British India or Tibet, waving the flag of whichever power sent representatives to the area. Of course, by 1962, the Chinese had occupied Tibet and "liberated" its people from "Lamaism" to subjugate them under Maoism. India had gained her independence. Happily, these smaller disputed areas - also still shown on maps with disputed boundaries - played a minor role in the border war.

The other major area of dispute was the North East Frontier Agency now known as Sikkim. As the name foreshadows, this region was held by India after the war, and remains under Indian control. In 2003 or so, the de facto possession by India seems to have been recognized by China. Sikkim is a part of India.

As the North East Frontier Agency or NEFA, the 32,000 square mile region was acquired by Britain in 1826 as a result of the First Burmese War and the Treaty of Yandaboo. This area abuts Bhutan and was an important market route between India and Tibet. It has a native population, the Assam, which presumably have some aboriginal sovereignty which has subsequently been ignored by British colonial, Tibetan, Chinese, and Indian governments.

Another native population, the Khamba tribesmen in eastern Tibet, opposed Chinese occupation of Tibet. Their actions led, in 1956, to the military supply road China built from Sinkiang across the Aksai Chin plateau. As further testament to the unoccupied nature of the Aksai Chin, the road was nearly complete in September 1957 when India first took official notice of its existence.

Negotiations proceeded poorly from this point, and in March 1959 the Dalai Lama crossed through NEFA into India, where he was granted political asylum. Meanwhile, a large number of Khamba tribesmen escaped from Chinese occupied Tibet into Nepal and India, bought arms and ammo, and returned to their home ranges inside Tibet. China responded by attempting to seal the border with India. India responded by actively patrolling the border both in NEFA and in the Karakoram. These patrols met Chinese resistance and firefights ensued.

In 1961, India had acquired military equipment and support from both the USA and Russia. Their army invaded Portuguese Goa, which was conquered and assimilated into India. The action in Goa supported China's view that India was expansionistic. Subsequent actions in 1962 in NEFA and in Aksai Chin supported this view.

In both cases, the Indian government under Jawaharlal Nehru chose to invade Chinese territory with troops. The timing, implementation, and assumptions involved could not have been worse.

India invaded a mountainous region of China during the Summer of 1962. In the case of NEFA, the Indian troops marched well north of the McMahon line which had been the previous basis for the border in that zone. In Aksai Chin, a large number of patrols were sent across the Macartney/MacDonald line. The timing was poor because China had recently concluded three years of mountain warfare in Korea and had been occupying Tibet persistently. At the time, India's troops were neither trained nor acclimatized to high altitudes where they were fighting.

The implementation was lousy as well. India's troops were supplied with Summer cotton uniforms in fighting well over 14,000 feet altitude where "Summer" includes frigid night time temperatures. Ammunition and equipment were also lacking. Food was not provided in many cases for days at a time. At one point a company of fifty Indian troops met an opposing Chinese force of a thousand.

The assumptions were also dreadful. Nehru's government asserted that China would not resist Indian aggression over the border. Nehru's government did essentially no intelligence work, was completely surprised by several Chinese attacks along the border after 10 October, and prepared poorly for the war.

It is noteworthy that China met its military objectives within about sixty days and completely occupied both NEFA and Aksai Chin. Then, they declared a ceasefire. Subequently, on 1 December 1962 under orders from Chinese premier Chou en Lai, the Chinese troops withdrew completely from NEFA, re-establishing the McMahon line as the border - giving up around 68% of the territory they had just conquered. Chinese troops never crossed the Macartney/McDonald line in Aksai Chin.

So ends our examination of those odd circles high in the Himalayas. These are not new countries, although it seems extremely likely that in the next few decades both India and China would fragment into more than one country. The lengthy history of both countries suggests that fragmentation is more likely than any consolidation or further expansion.

In an earlier issue, we mentioned Taiwan Semiconductor. Since early November, TSM has risen from about $8/share to $10.39 today. AU Optronics (AUTO.ob) has risen from about $0.45/share in early November to $0.67 today.


Given that healthy adult humans require about 3 grams a day of Vitamin C (plus enough zinc to metabolize it) and, unlike other mammals our ability to make ascorbic acid from food is genetically broken, nobody should expect to "get what they need to live healthy" from food. It is simply an unworkable idea. You have to expect to supplement your diet with nutrients.

But, you can benefit from watching your diet. Excess consumption of red meat has been clinically tied to increased risk of heart disease, certain types of cancer, appendicitis, chronic inflammation, and kidney disease. A number of articles we've reviewed here recently suggest that pomegranites, green tea, and other interesting vegetation have extremely useful phytonutrients worth pursuing. A diet high in fiber, including bran and whole grain breads or cereals can be exceptionally beneficial in reducing the incidence of illnesses of the bowel and excessive cholesterol. Eating more fruit, vegetables, and fish, especially sea fishes that are high in essential fatty acids, along with nuts such as walnuts which are similarly high in essential fatty acids, is a good set of ideas.

But, what about going "whole hog" to crack wise, and spurning meat entirely? Turns out that vegetarians don't get a huge improvement in longevity. The health benefits seem to be reduced the longer the vegetarian diet is pursued.

So, according to a study reviewed by Bill Faloon and his Life Extension Foundation team (above cited) vegetarians under 65 were 45% less likely to suffer a heart attack than meat eaters. Once vegetarians reach age 80, however, their heart attack risk was only 8% lower than meat eaters. Two studies of people who consume very little meat showed an average life-span increase of 3.6 years. A substantial study of Seventh Day Adventists, who ate little or no meat and follow a healthy lifestyle without tobacco or alcohol showed 7.28 years added lifespan for men and 4.42 years in women. (Of course, the red wine studies suggest that alcohol in that form is not unhealthy, and may reduce risk for a number of diseases when consumed persistently and in moderation.)

Vegetarian diets have long been known to be deficient in B12, which is easy enough to supplement. But, it turns out they are also deficient in carnosine. Without carnosine (in beef or in supplements), the toxic binding of glucose to cell proteins - a process called glycation - can run wild. Glycation wrinkles skin and causes a wide variety of pathological reactions. Diabetes involves accelerated glycation which contributes to secondary diseases that are often the cause of death. Glycation causes arteries to lose elasticity, promotes hypertension, and often results in atherosclerosis. Glycation also shows up in cataracts, in cancers, and in Alzheimer's.

So, how much beef do you need? A recent study profiled in Faloon's essay evaluated 18 people served 7.1 ounces of ground beef. They had no meat foods for 48 hours, and blood tests showed no carnosine. Then they ate 7.1 ounces of ground beef, containing some 248 milligrams of carnosine. (These are ounces avoirdupois, so 16 ounces to the pound. Presumably, we're talking one burger of less than half a pound.) Within 15 minutes carnosine was detected in the blood, and its level increased for several hours. After 5.5 hours, there was again no carnosine in the blood. So, either eat burgers, roast beef, or steak three meals a day, or expect to take a carnosine supplement to protect against glycation reactions day and night.

Why does carnosine disappear? It turns out the body produces an enzyme, carnosinase, which breaks down carnosine. Faloon's essay recommends a gram of carnosine (a thousand milligrams) per day.

So, how does it work? Carnosine seems to protect against age-related degradation of protein. Specifically, protein degradation occurs as a result of advanced glycation end products (happily acronymed as AGEs). Skin wrinkling and brain degeneration are typical results. Glycated proteins produce 50 times more free radicals than non-glycated proteins, so carnosine may be an answer to reduce your need for anti-oxidants.

Another benefit of carnosine is its ability to chelate copper and zinc. Abnormal copper and zinc metabolism stimulates senile plaque formation in Alzheimer's patients. Carnosine is a potent chelator of these metals, and may dissolve some plaques. Carnosine has also been studied in extending cell lifespan, helping older cells to continue to divide. One study showed carnosine extending cell life spans from 139 days to 413 days.

Finally, Faloon's essay points out that carnosine levels in the body decrease by 63% from age ten to age seventy. This reduction may account for some reduction in muscle mass and function seen in aging adults. Carnosine acts not only as an antioxidant in mucle, but also as a acidity buffer, keeping pH balanced. Carnosine helps the heart contract more efficiently through enhanced calcium response in heart cells.

One of the reasons I mention the Life Extension Foundation, Life-Enhancement, Alcor, the Methuselah Mouse Prize, and other organizations dedicated to greater lifespan is these guys are dedicated to gathering and analyzing the best information about health and longevity. You cannot see the future unless you live long enough to be part of it. And you can read all kinds of health magazines without finding an editorial like Bill Faloon's with 83 separate citations of studies and medical journal articles. Indeed, most editorial essays on health simply never get beyond the opinions of the essayist. And, of course, if you don't agree with Bill's conclusions, he gives you the citations and you can read the literature he cites and form your own conclusions. (Please e-mail if you do!)

FDA delenda est.

Legislatura delenda est.

Here's how our stock suggestions in the nanotechnology and life extension sector look right now (evening Monday 16 January 2006).

Company Symbol US$ delta
CytRx CYTR 1.20 0.30
Accelrys ACCL 7.12 0.51
Dendreon DNDN 5.57 0.25
Elan Corp. ELN 16.02 8.79

Elan has hit our first double in this sector. Yay. Remember Doug Casey's advice ( to sell half on a double. Also remember Rick Rule's advice to keep tight trailing stops as your stocks rise higher, so you can lock in your gains.

Are you ready for more nanotechnology stocks? We are. This coming week, I'll be headed to Vancouver for the Resource Stock convention, and my friend John Kyle has agreed to attend the Nanotechnology Venture Forum hosted by the Rice Alliance in Houston this Friday. So, we should have lots of new ideas for you next week.

We may be wrong, again, but it seems the market has now priced in much of Pfizer and Merck's difficulties with past drugs. If you continue to hold short positions in these stocks, please follow them on your own.

Publication Note: Late again. But, we've added quite a few templates to the end of 2005, and should have a consolidated Free Market Money industry status report soon.

Gratuitous example of bizarre legislation: The USA Department of Agriculture has passed regulations that make it mandatory for every livestock owner to have a microchip identity device implanted in each animal by January 2009. While this perverse law is an executive department regulation rather than a constitutionally authorized law passed by Congress, it is clear that legislation is now a usurped function of many executive departments. Keep in mind that these brutal vermin who seek to decide who gets to have animals and whose flocks and herds get eliminated offer to pay nothing for the cost of chipping animals, offer to limit who may or may not own livestock, and presumably expect to control who gets to produce food. These disgusting bureau-rats probably feel they should decide who gets to eat, too.


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