The Indomitus Report - 31 December 2004

Indomitus Industries heraldic achievement.

This Issue:
B M: GM FMM S LT N L P

First Issue 15 May 2004
B M S LT N L
Second Issue 30 August 2004
B M GM FMM S LT N L
Third Issue 10 September 2004
B M GM FMM S LT N L P
Fourth Issue 19 September 2004
B M GM FMM S LT N L P
Fifth Issue 26 September 2004
B M GM FMM S LT N L P
Sixth Issue 3 October 2004
B M GM FMM S LT N L P
Seventh Issue 12 October 2004
B M GM FMM S LT N L P
Eighth Issue 21 October 2004
B M GM FMM S LT N L P
Ninth Issue 28 October 2004
B M GM FMM S LT N L P
Tenth Issue 4 November 2004
B M GM FMM S LT N L P
Eleventh Issue 22 November 2004
S B M GM FMM S LT N L P
Twelfth Issue 29 November 2004
S B M GM FMM S LT N L P
Thirteenth Issue 7 December 2004
B M GM FMM S LT N L P
Fourteenth Issue 13 December 2004
B M GM FMM S LT N L P
Fifteenth Issue 20 December 2004
B M GM FMM S LT N L P

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

The Indomitus Report

31 December 2004
Happy New Year!
Index in This Issue

Being Sovereign

"Headquarters, St. Engracia. Capitulation."
- Napoleon's General Lefebvre demanding surrender.

"Headquarters, Saragossa. War to the knife!"
- José de Palafox y Melzi, 1808
Responding to the demand.

On 15 June 1808 the French army approached Saragossa, the ancient capital of Aragon. At the time, the town had a garrison of 200 newly commanded by Palafox. About 55,000 to 60,000 lived in the city, and both men and women were armed and determined to resist French occupation. After forty-six days of siege, the city was surrounded and supplies were falling short. Dead bodies were piled in the streets, and pestilence was raging among the defenders. The French gained entry to the city on 4 August 1808, but the defenders retired across the Ebro river and continued the defense. The French were defeated on 13 August 1808 at Bailen and withdrew their troops from Saragossa, ending the first siege. Another siege beginning in December 1808 and continuing into 1809 ultimately led to the capture of the city, after the loss of some 50,000 lives among the defenders.

Palafox is famous for his response to the demand for surrender (perhaps second only to the reply of "nuts" from the defender of Bastogne, Anthony McAuliffe in 1944). He should also perhaps be remembered for being a bit prescient, for the defense of Saragossa included pitched fighting, hand to hand, with knives, shovels, and bayonets.

The knife is the ultimate tool for close quarters combat. It is certainly not mankind's first technology. The club is probably the best candidate for that prize. Fire might be thought of as a necessary precursor to knives, but we are used to thinking about metal knife blades. For tens of thousands of years, it seems the best knife blades were rock.

Stone tools, especially those made from flint, were used not only by homo sapiens but by our predecessors, homo erectus. Quite likely the first stone tools were simply stones used for bashing things about. When a stone broke, instead of discarding it, its broken edge would be used to direct some of the smashing function. Eventually, edged tools were crafted by design rather than by accident. With homo sapiens came the adaptation of adding different materials such as antler or wood to create handles.

Stone tools gave way to copper, then bronze, then iron, and finally steel. Currently, tools are made from all kinds of advanced materials, including plastics, composites, advanced ceramics, and exotics. An example of a plastic would be kevlar, which is now used to form helmets, knives, and even guns. Composites combine two materials which have different types of strength (compression and tensile, for example) or which have strength in different directions. Carbon fibers embedded in a resin would be an example of a composite material. Advanced ceramics are not necessarily brittle, and may have all kinds of properties by design. An example of an exotic material would be molten steel through which air has been forced in zero gravity, so that the cooled material is a sort of foam steel. Exotic materials are also being built up using molecular epitaxy to create the material one molecular layer at a time.

Steel itself is not what it used to be. Fundamentally, steel is iron with carbon added. The amount of carbon varies from less than 0.2% to around 1.5%. Other elements may be added to form alloys with manganese, chromium, nickel, molybdenum, copper, tungsten, cobalt, or silicon.

In addition to being made out of many different materials, knives come in all shapes and sizes. The advent of bronze allowed blades to lengthen to the point where knives became swords. Bronze, an alloy of tin and copper, has adequate tensile strength. Steel, however, really allows for long knives which are flexible as well as strong. The short sword was possible in bronze, the rapier only with steel.

As well as handheld cutting tools, knives have been adapted for throwing. In this category of throwing blades we include all manner of throwing stars or shurikin, bladed yo-yos (tethered throwing stars), tomahawks, and the like. The main advantage of knives which are balanced for throwing is the ability to engage an attacker from some distance, as much as twenty yards. Like all projectile weapons, aim is vital to making an effective throw. The main disadvantage of throwing a knife, sword, tomahawk, or throwing star is that you are throwing away your weapon. That may work out if you always carry a spare which you don't throw. The famous Bowie knife was designed by Jim Bowie to be nearly as long as a short sword and balanced for throwing as well as handheld cutting.

Knives also come with moving parts, nowadays. Beginning in the 19th Century, the folding knife became very popular. A folding knife may be carried conveniently, may be readily concealed, and is often about as effective as a straight knife. It also frequently is used without a scabbard. The main disadvantage of a folding knife is that it has a hinge which may break. A knife with no moving parts and a solid handle should be stronger and more reliable.

Knife fighting and its cousin, sword fighting or "fencing" is an art. You cannot learn to fight with any weapon by reading about it. You should certainly take classes from experts to gain proficiency. That's good advice for any tool you want to use.

Knives are superior close quarters weapons for several reasons. Foremost, the knife is an equalizer. A blade carried by a short, thin, uncertain fighter is a great advantage over a tall, muscular, confident fighter with no blade.

The knife or sword is an extension of the user. For distances of four feet to infinity, some form of projectile weapon is an excellent choice. Within four feet, or a bit more than arm's length, the time to aim and fire a projectile weapon may be greater than the time for your opponent to close with you and engage or even disarm you. As well, when you have little time to react, you may make a gun control error, such as not being certain of your backstop. More on guns in a future issue.

An example of the importance of the knife in close quarters combat comes from the life of Nathan Bedford Forrest. General Forrest encountered one of his officers in camp. The officer was a junior and had been passed over for promotion. Interpreting this event as a slur on his character, the junior officer confronted Forrest at his headquarters tent. The altercation became violent when the junior officer pulled a pistol and shot Forrest at point blank range. Fortunately for Forrest, the ball bounced off his hip bone and did no major damage. Forrest had no other weapon, but opened his pocket knife one handed and gutted his opponent while holding his own wound closed with the other hand and limiting blood loss. Forrest survived the encounter and the junior officer bled to death on a surgeon's table.

The knife is an extension of your hand, arm, and body. You should become very familiar with your preferred blades, be able to draw them smoothly and without concentration, and be comfortable handling them in various situations. Practice cutting with them, against boards or mannequins or mats. Slicing air is not comparable to slicing a person.

Practice daggers made of wood, rattan, or plastic are useful for mock combat with your trainer. Get used to the feel of having your blades cross both with practice blades and real ones.

Body armor, which we discussed last week, will stop some blades in some circumstances. However, your kevlar vest becomes less able to defend you the more bullets or blades it stops. Whenever possible, replace any body armor that has been cut or taken a high velocity impact. Be mindful of the difficulties with edges - the edge of your body armor won't be as strong as the part further in from the edge.

A knife is a weapon of last resort. You should attempt to situate yourself and those things you seek to protect within a layered defensive system. To the extent possible, you want to engage enemies far from your home, far from your person. Having tools such as knives for close quarters fighting does not assume that you'll ever encounter someone within four feet, but it does assume that you cannot count on never having such an encounter.

When your knife breaks or is lost in combat, you should also be able to defend yourself with hands and feet. And always carry a spare.

Free Market Money

"The coin is a delicate meter of civil, social, and moral changes...It is the finest barometer of social storms, and announces revolutions."
- Ralph Waldo Emerson, 1860,
"Essay on Wealth"

The end of the year is a fine time to assess the status of the free market money industry. The year 2004 saw remarkable growth in the volume of precious metals under management, the services available for free market money, and the features presented by free market money systems. We also saw some failures, most notably the evaporation of the evocash system after many years of successful operation.

e-gold

Industry elder e-gold.com continues to have the largest number of accounts. We think there are several factors to account for this lead in activity. First, there is the referral fee. E-gold reliably pays referral fees or "incentive fees" to existing customers who sign up new users. Second, there is the first mover advantage. Having been around since 1996 does help. Many people have heard of e-gold, and e-gold is routinely mentioned when online gold payments are mentioned. Third, there is functional pseudonymity. It isn't clear that actual anonymity is possible with e-gold, given their IP tracking methods. Fourth, e-gold continues to be used, willingly or not, for various activities such as Ponzi schemes which generate a large number of users, and dust spamming which generates a large number of micro-funded accounts.

E-gold currently has 60,173.4 fine troy ounces of gold in the vaults, which has a value of about $26.36 million as we write this essay. In grams, e-gold has 1.87 million grams of gold in circulation.

The e-gold system is the original multi-metal platform. They have vaulted 138,567.25 ounces of silver valued at about $941K. There are 400 ounces of platinum in the e-gold system, or about $341K. There are 396.47 ounces of palladium in storage, for about $69K. All found, the value of metal they store is worth about $27.7 million.

The e-gold system continues to offer the most statistics and the least credibility. We found no information about third party audits nor methods of corporate governance suggesting multi-party control nor checks and balances. It is unclear from our review what the escrow agent does.

The e-gold statistics page shows 1,713,029 accounts in existence as of this writing. Within the past 24 hours, 1,239 new accounts were created; 14,043 accounts were accessed; 17,870 spend events took place. Extrapolating from the account access figure suggests that perhaps as many as 100,000 e-gold accounts are used each week.

Velocity over the last 24 hours was 81.7 kilograms of gold, or the dollar equivalent of $1.15 million. This figure suggests that as much as $420 million of economic activity takes place through the e-gold system, although we admit that New Year's Eve may not be the most typical 24 hour period of activity.

The spending pattern in the last 24 hours shows the plurality of financial activity in just 102 spends of 27.63 kilos gold, being the activity for all spends 100 grams to 1 kilo. Another 9 spends accounted for 27.55 kilos gold being shifted in one kilo to ten kilo batches. The plurality of spend events took place in the 10 milligram to 100 milligram range - 5,456 spends accounting for 201.67 grams of gold transferred. One hundred milligrams is one tenth of a gram, or about $1.41 at today's price of gold.

Using that figure as a cut-off, the e-gold system today saw 11,593 spend events smaller than $1.41. Over half of these events were smaller than $0.14. We suspect that many or all of these payments are incentive payments of some form, such as pay to read, referral fee, or activity commissions. Commissions may be paid by innocuous exchange services, as GoldAge.net does and perhaps OmniPay may do, and commissions may also be paid by various nefarious enterprises such as Ponzi schemes. Spammers seem to try to attract attention to their web sites by sending a miniscule payment with a memo indicating their web site address. Some of these web addresses offer products and services, others engage in fraudulent Ponzi schemes, and some may even offer warez or hostile software.

When we've formed new e-gold accounts in the last year or two, we've noticed milligram or so payments appear a few days to weeks later. This activity suggests that anyone forming an account, whether intending to use it or not, gets a dusting of gold, silver, or palladium. Spammers have access to "bulk spending" software from various third party vendors which allows them to send large volumes of spends to the e-gold server. Simply putting in all the account numbers numerically from some value would allow all new accounts to receive payments, with the few non-working accounts being rejected by the e-gold server without slowing things down. We think e-gold's change in payment receive fee calculation at the beginning of 2004 may have been intended to capture more revenue from such activity, but because it affects receivers and not spenders, this change cannot discourage such activity.

These small payments are numerous, but involve very small economic units. For amounts less than a tenth gram, 11,593 spend events account for just 223 grams of gold moved, or about $3,141 of economic activity. For amounts between a tenth gram and ten grams, 5,542 events occurred and accounted for 8,580 grams of gold or nearly $121,000 of activity. For amounts greater than 10 grams, just 699 events took place, moving a total of over a million dollars of value (72,900 grams of gold).

E-gold accounts may have one metal or up to four metals in them. There are 857,046 accounts with some amount of gold, 664,448 with some amount of silver, 3,715 with some amount of platnium, and 161,518 with some amount of palladium. Spammers may account for a very large number of these accounts with silver and palladium, as they make trivial payments to try to draw attention to their sites.

E-gold average funded balances are 2.18 grams of gold, 6.49 grams of silver, 3.32 grams of platinum, and 75.89 milligrams of palladium. Arbitrarily assigning a value of $0.14 to be an economically interesting amount of money to store, there are 306,823 accounts with at least that much gold in them; there are 3,077 accounts with that much or more silver; 1,252 accounts with at least that much platinum; and 830 accounts with at least that much palladium. The fact that the vast majority of silver and palladium accounts have 0 to 10 milligrams of dust in them seems to confirm that spammers are dusting accounts to attempt to attract attention to their web sites. Ten milligrams of silver is worth about two tenths of a cent. The same is also true of the majority of funded gold accounts, possibly for the same reason.

Since there is more activity among gold users, it is at least possible that some of these accounts with gold dust in them may be accounts used for a while, empty now, and destined to be used again. However, we think few companies or individuals would be that careful with their accounting, and "empty" accounts are more likely to have some amount such as fourteen cents in them.

A significant event this year for e-gold was the implementation on 1 January 2004 of the micropayment initiative for online digital content. This change in their payment receive fee calculation was explained by Doug Jackson on 17 December 2003 in a rare message to the e-gold discussion list. Jackson noted, "in the past, extremely small value (less than a penny) silver payments were permitted despite both the transaction amount (and especially the fee) being so tiny as to serve no consequential economic purpose." The fee cap was adjusted to a weight based cap from a 50 cents equivalence. The new fees start by capturing 5% of the tiniest payments plus a fixed amount of whatever metal was spent, presumably to benefit from it economically; economically significant spends of a tenth gram cost 1.25% plus a fixed amount of metal; substantial payments over 5 grams of gold incur a capped fee of 0.05 grams, or about 70 cents.

Another significant event for e-gold this year was the announced separation of e-dinar.com. The e-dinar system is discussed below. A third significant event for 2004 was the advent of the AccSent security feature, which tracks the IP addresses used for logging in and requires interaction with the user's registered e-mail address to gain a PIN code when the IP address has changed. (Naturally, we view this development as evidence that e-gold has been logging IP addresses right along, suggesting a privacy limitation for users.)

We continue to suggest against e-gold for our American readers, given the placement of the servers in the USA. USA privacy laws are somewhat better for foreigners. For Americans, the 1MDC system continues to offer offshore data hosting for e-gold users.

Liberty Dollar

Second on the scene was the Liberty Dollar which entered the market in 1998 as NORFED or the "National Organization for the Repeal of the Federal Reserve Act and the IRS" which has operated from the norfed.org and LibertyDollar.org web sites. The first paper warehouse receipts and coins were issued by NORFED in October 1998.

The Idaho accounting firm of Clark, Anderson, McNelis & Co. audits the American Liberty Currency for NORFED. Their last audit, for October 2004 shown on the Liberty Dollar web site indicates that 90,919 ounces of paper and digital warehouse receipts for silver are in circulation. These ounces are assigned an exchange rate of $10, so about $909K of paper and digital warehouse receipts are in circulation. In addition, 19,751 ounces of silver have been redeemed for warehouse receipts bringing the total to well over a million dollars. The warehouse has 50 ounces of gold corresponding to $500 warehouse receipts, and a further 37 of these have been redeemed. (The warehouse is Shelter Systems of Coeur d'Alene, Idaho.)

Estimates vary widely for the silver Liberty pieces in circulation. A recent estimate of one million pieces each marked $10 suggests about $10 million in specie and another $0.9 million in paper or digital warehouse receipts for a total of about $10.9 million in silver in circulation. Using the same proportion for gold pieces in circulation compared to the published figures for gold warehouse receipts suggests another $129K of specie and warehouse receipts for gold, plus an unknown number of silver pieces of $5 and $1 denominations. By year-old estimates, as many as 100,000 users have Liberty silver or paper. All found, the volume of metal stored or in circulation is about $11 million.

We continue to research significant events in 2004 for Liberty Dollar. On two separate occasions, in April and in December, the 30 day moving average for silver was near their figure of merit ($7.50) for several days before dropping back. We suspect that silver prices in 2005 may at some point hold onto a 30 day moving average of $7.50 for thirty days, at which point the Liberty Dollar would double the face value of their money.

e-Bullion

Third on the scene was e-Bullion which entered the market in 2000. The e-Bullion company is a registered legal corporate entity of the Republic of Panama. The reserve bullion administrator for the system is Goldfinger Bullion Reserve Corporation, a legal corporate entity of the State of Delaware.

e-Bullion has 19,455 ounces of gold in reserve, and 79,305 ounces of silver. They also have $781,323.99 of e-Currency® in circulation. All found their currencies are $9.8 million of gold, silver, and dollars. Their vaults are wholly owned or leased Treasury-grade bullion storage vaults in Los Angeles, Delaware, Zurich, and Australia.

Significant events in 2004 for e-Bullion include the advent of their e-Currency®, a dollar transfer system, and the switch to a frictionless system of no transfer fees and no storage fees. E-Bullion also shifted some of their servers to Switzerland to provide enhanced financial privacy to their users.

e-dinar

Abu Bakr ibn Abi Maryam, according to the e-dinar.com web site, reported that he heard "the Messenger of Allah, may Allah bless him and grant him peace, say: 'A time is certainly coming over mankind in which there will be nothing which will be of use save a dinar and a dirham.'" So, the idea of the dinar and dirham as gold and silver (respectively) specie for the Islamic world would seem to go back to about AD 635, or the founding of their culture by the prophet Muhammed. As far as e-dinar the company, they report having minted gold dinar and silver dirham coins in 1992. In the first half of 2000, e-dinar finalized its partner agreement with e-gold. Third quarter of that year the company incorporated, authorized share capital, received permission to mint coins in Dubai, and established mints in UAE and Indonesia. The company also reports going "live" in September 2000 and launching in first quarter 2001, so we're not sure what that means. In third quarter 2003 a "large international corporation" bought a fifty percent stake in e-dinar. In July 2004, the e-dinar system formally separated from e-gold and launched as an independent e-payment system.

What we have not been able to ascertain is the amount of gold or silver in their vaults or in circulation. We continue to research this matter. Also, we've set up an e-dinar account just to see if by logging in we might have access to such data, but found none. If you are eager to send us e-dinar or dirham money, our account name is Indomitus Industries.

GoldMoney

GoldMoney.com came on line in 2001. We received a copy of the auditor report for the GoldMoney.com system. It looks to us like a thorough analysis of both the software version of funds in the system and also the gold in the vaults. What it means to us is GoldMoney is gold itself in our holding.

GoldMoney has 2,884,815.108 grams of gold in circulation and in the vault as of 31 December 2004. They publish no persistently updated figures on the number of users; their press release of 11 February 2004 claims 10,000 customers in over 100 countries.

Significant events for 2004 include the January decision by Durban Roodepoort Deep to take a 1.4% position in GoldMoney and their April decision to increase that stake to 14% for a total of about $2 million invested; the issue of the one millionth gold gram on 11 February 2004 and, apparently, the issue of the two millionth more recently; their October addition of a new service to convert Canadian dollars by electronic check to GoldMoney - matching the services for British pounds and USA dollars announced in 2003.

Pecunix

Pecunix opened in 2002. We learned they have 1,579.499 ounces of gold, or about $692K in the vault. We gather from private correspondence that they have some 7,500 users.

Significant events for 2004 - Pecunix is now accepted at the Gold Casino, one of the most active gold commerce sites on the web.

1MDC

1MDC was opened for business in 2001, as we recall. Since its gold reserves are provided by e-gold, we don't include it in our calculation of reserves. It wouldn't matter, since the company doesn't publish figures on users, gold stored, or any other aspect of operations.

What 1MDC provides is an account accessory to any e-gold account. You use 1MDC the same as you would any other online currency system. The data about your transaction history is stored offshore using servers on a Caribbean island.

In 2004, 1MDC was added to the Open2Exchange service, and is now offered by IceGold.com, Cambist.net, SpaceGold.com, e-Fidex.com, GoldNow.st, AnyGoldNow.com, EuroGoldFrance.com, and GoldAge.net. In October the company offered fiat currency equivalents for its automation and shopping cart interface. In November, the merchant Rayservers.com began accepting 1MDC.

evocash

The evocash dollar transfer service was opened for business in 2001, again as we recall. The system operated successfully until 2004, when it was forced out of operation by what we gather was a USA federal investigation of the "Free Land Opps" or "FLO" investment scheme. We suspect that FLO was a Ponzi scheme, and it may have been operated to attack some of the online currency systems. Conceivably, FLO may have been a sting operation of sorts. To our knowledge, exchange providers were able to obtain refunds on all evocash balances. We were told to expect refund checks for non-FLO account holders, but we have not heard anything definite one way or the other.

PayPal

PayPal was founded in 1998. Today it claims 56 million account members worldwide. Their first quarter 2004 volume of payments ws $4.3 billion, which annualizes to $17.2 billion in payments. PayPal is 33 times as large as e-gold in number of users, 40 times as large as e-gold in annual payment volume. (GoldMoney has 45% of the metal currency in circulation, a plurality, but we don't have figures on their user base or annual payment volume for comparison purposes.)

Altogether, the five companies with metal based online payment systems that publish figures on their circulation have about $89.8 million in inventory or metal in actual circulation (such as the Liberty silver pieces). Although the other gold currency operators don't publish figures on velocity, we extrapolate from the e-gold figure (about 4.2% of their inventory circulates in 24 hours) to suggest that about $3.7 million is circulated every day among the five systems (e-gold, Liberty Dollar, e-Bullion, GoldMoney, Pecunix). This figure annualizes to about $1.36 billion per year in payment volume. So, PayPal is only 12.6 times as large as the five gold and silver payment systems combined.

Gold Mining

Here's how the stocks we presently suggest in this area look right now:

Company	Symbol	C$	US$	s
Exploring
Almaden	AMM.TO	1.65	-	-C$0.09
Free Gold	ITF	0.36	0.27	+C$0.08
Luzon	LZN.V	0.27	-	- C$0.02
Holding
Lumina	LCC	-	4.80	+ 0.16
Silver Standard	SSRI	-	12.09	- 0.69
Vista	VGZ.TO	4.55	-	- C$0.45
Mining
Newmont Mining	NEM	-	44.41	+1.11
Northgate	NXG	-	1.70	+ 0.05

End of year tax loss selling should now be over. Small cap stocks often benefit from the so-called "January effect" so you may want to buy in now, or very soon. Lumina and Northgate are both up since our initial suggestion of these two stocks, as are Newmont and Free Gold. Luzon seems to have bottomed and is now rising. Silver Standard and Almaden have continued to weaken. We expect 2005 will be an excellent year for these companies.

We encourage you to time your buys carefully and keep trailing stops in place to prevent losses.

Free Market Money

Gold closed for the year at $438.10. Silver closed for the year at $6.79. In his most recent newsletter for the Liberty Dollar, Bernard von NotHaus concludes that the exchange traded funds were sold short in a major way in December. He also suggests that Rothschild's may have been behind the drop in gold and silver prices. We are at a loss to explain the unusual overhead resistance at $455, except to say that Michael Bolser's Interventional Analysis is looking good right now.

The two stocks we've suggested in this sector are PVH and MCG. MCG is unchanged at .513 grams. PVH is unchanged at 0.025 grams. We gather that urgent selling by an early investor resulted in the drop in PVH's stock price in December. We anticipate a recovery in the near term. We continue to urge PVCSE to develop a stop loss order system.

We have heard again that Gold Barter Holdings (GBH on PVCSE.com) is to issue a dividend to shareholders after the first of the year. We have no details on the amount or the exact timing.

Space Frontier

"The technology itself isn't that complicated, but we've had to reinvent the process. Instead of handing out fat contracts to all of the usual suspects, the big contractors, we're doing this on our own, looking for the best deals we can find. The big contractors have been charging NASA 50 times what something costs. They did it because they could get away with it. Not us. We haven't accepted a dime of government money."
- Robert Bigelow, 8 July 2004

We've been encouraged and discouraged by Mr. Bigelow by turns. He certainly has the right attitude in many ways, but his recent choice to engage with NASA by signing three "Space Act Agreements" for exchange of personnel and technology and the transfer of "NASA patents" to Bigelow may represent a mistaken strategy.

If past examples such as Orbital Sciences or SpaceHab are any basis for forming expectations, Bigelow is going to be disappointed by the results of his decision to engage with NASA. We expect NASA to effectively renege on any agreements with the private sector, wring its hands as policy changes prevent it from holding up its end of bargains (see the history of the Transfer Orbit Stage by Orbital), or co-opt Bigelow into endless government contracting schemes that may be marginally profitable but would likely distract Bigelow from his planned hotels in orbit (as happened to SpaceHab's earlier ambitions to fly passengers in space).

NASA is a worthless agency which kills astronauts by the batch, wastes over ten billion dollars a year, has proven incompetent to manage the space station program, seems gluttonous for cost over-runs, and plays the revolving door game with contractor personnel. However evil and vicious it may be, it has proven, like the Praetorian Guard of ancient Rome to be effective at survival. The survival of the space agency is always going to be of greater importance to it and its minions than opening the space frontier.

We remain of the opinion that NASA must be eliminated. NASA delenda est.

Here's how things stand for the stock we suggested in this sector:

SpaceDev is at $1.75. It is up $0.25 since we first recommended it, well down from its peak. Based on our earlier discussion, you should have formed a trailing stop and presumably sold your position. However, we continue to monitor this stock against our earliest buy recommendation.

Launch Technology

"The first redesigned external fuel tank, overhauled to prevent the kind of breakaway foam insulation that doomed Columbia and seven astronauts, sailed out of its New Orleans port on Friday morning bound for Florida."
- John Kelly, Florida Today

Guess which company has been rewarded for building faulty external tanks with foam insulation that kills astronauts? Why, Lockheed Martin, it would seem.

Lock-Mart has been awarded a contract to revamp the external tank and replace the foam insulation that doomed the Columbia crew. Apparently, their first such fixed tank is now ready for a flight of the shuttle Discovery sometime in May or June 2005. Wow, that's great.

The other thing to note is that the old style shuttle external tanks didn't have this problem. We suspect that Lock-Mart either proposed or responded to a NASA request to replace the old foam insulation that didn't fill with water, freeze, and slough off the shuttle with new foam that wasn't impregnated with chloro-fluorocarbons. Apparently, environmental wackiness and the continuing desire for new corruptly allocated contracts resulted in the change from old foam to new foam and now the death of seven astronauts has brought back the old foam.

Of all the easily recognizable reasons for dissolving NASA and liquidating its assets, this pretend concern for the environment and the deadly results of replacing the foam insulation should be enough to have Congress do the job that has been waiting thirty years. We note that it is pretend concern for the environment because the real culprit of shuttle launches is the ammonium perchlorate in the solid rocket boosters which puts a lot of chlorine high into the atmosphere. If NASA were actually concerned about the environment rather than crying crocodile tears while corruptly allocating more contracts to its buddies in the defense contractor cartel, it would have replaced the solid boosters long ago.

Liquid boosters would have improved the shuttle's payload to orbit, as well. But, the same tired excuses are in place, and the segmented solid rocket boosters, re-designed from the set that massacred seven astronauts aboard Challenger are now being stacked at the Kennedy Space Center.

NASA delenda est.

New Country Developments

"If our species is to survive, I believe experimentation will eventually lead to the evolution of a new social system in which the belief that society must have authority over the individual will change....Not only is a world in which individuals have sovereignty over themselves the optimal social system, it is the only possible system that takes into account the evolutionary nature of Homo sapiens."
John Pugsley, 15 December 2004

Last week, we promised to continue our review of the international liberty news from ISIL.org.

Dr. Sudha Shenoy spoke at the ISIL world conference in New Zealand on the topic of common law systems. She advocates the idea of case law which develops and evolves over time in response to changes in the way people behave. The other way of developing law, using legislation generally in response to the preferences of government officials or special interest groups, "is more dangerous than gunpowder."

George H. Smith spoke on the origins of classical liberalism, the myth of social Darwinism being espoused by Herbert Spencer or William Graham Sumner, and the theory of Lord Acton on why individual freedom developed in Western thinking and not in some other cultures. He also discussed the oppressive nature of mercantilism as opposed to free trade.

Dr. William Rolleston discussed popular opposition to genetic research in New Zealand. Dr. Rolleston's industry has responded by forming a Life Science Network.

We were surprised to find Michael Cloud working for the Advocates for Self-Government. He conducted two sessions in New Zealand on the topic of effective communication techniques. His metaphor of a Freedom Store in which various freedoms were available and one might sample them at leisure was brought up by another speaker, Rodney Hide, who said that one member of parliament from the left was "still in the confectionary department of the Freedom Store." We generally like Sharon Harris of Advocates for Self-Government and were rather surprised to find her accompanied by Michael Cloud on this recent visit to New Zealand. Cloud, also known as Michael Emerling Cloud and as Michael Emerling, we believe, was one of the persons involved in the Harry Browne campaigns in 1996 and 2000, which campaigns we believe were accompanied by corrupt acts by national Libertarian Party headquarters staff members. We recall meeting Cloud in 1996, and being unfavorably impressed with him as something of a confidence trickster, based on our recollection of his behavior.

Gerry Eckhoff, a member of parliament, spoke on numerous government boondoggles. He said, "They micromanage our lives - not from any sense of duty or selfless sacrifice. They gouge billions of dollars out of their fellow citizens and rule every action of every waking hour simply so that they can ingratiate themselves to the voters and thereby get back into office." He pointed out that in health care and in education, the private sector is actually successful and the public sector not. The same is true for wildlife. For government and socialists, "It's better for wild creatures to be dead than privately bred." However, as "freedom breeds success in every sphere - if you and I were free to raise wildlife in humane conditions, then there would be no shortages. We would strive to care for our flocks as we do our sheep. We would see they were healthy and breeding to their potential." The cynic in us would point out that solving the problem of wildlife would prevent the government from having more money to waste on it. Eckhoff reports that in South Africa, full rights and control over wildlife have been granted to landowners, and biodiversity has been better served in areas surrounding national parks than in the parks themselves. Go figure. Eckhoff quoted Julian Simon to the effect that Simon once hoped that intellectual error accounted for the politics of the environmental establishment, but that he had given up this view. These people, Simon concluded, "were the enemies of humanity."

Dr. Vincent Gray is an expert reviewer on the Intergovernmental Panel on Climate Change. Apparently, "the global warming scare is a delusion." Carbon dioxide is a welcome organic fertilizer and we lack a full understanding of all the factors involved in climate change. Measurements of temperature are tainted by the locations where the mesurements are taken, near cities and heavily populated areas that are themselves "heat islands." There is a lack of temperature data over any significant period of time - even a couple of centuries in some locations doesn't represent much on the geological scale. Steady temperature is not guaranteed, and ice ages and interglacials occur independent of human action. If one were serious about "radiative forcing" the first priority would be water vapor, and clouds would be a close second, but as both are extremely variable there are no figures for their average values. Dr. Gray points out that environmentalist dogma "has depended on a low level of scientific knowledge on the part of the public" so that "phony science can appear convincing." (For our own part, we aren't worried about global warming, at all. As a Cato Institute researcher pointed out several years ago at an event in Houston, more people die each year from extreme cold than from extreme heat.)

Robert White is a lecturer at the University of Auckland and finishing a doctoral thesis on Ayn Rand's politics. Some of the ideas he likes are Rand's dramatization of the failure of socialism, her belief that technological advancement is incompatible with collectivism, her emphasis on the needs of the creators and producers, her heroic view of business and earning a living, and her view that individual freedom and laissez-faire capitalism are grounded in the need for humans to think for themselves in order to survive and flourish.

Our friend Jan Narveson from the philosophy department at the University of Waterloo in Ontario spoke on the globalization of labor markets. Jan spoke effectively in favor of the global labor market, pointing out that cheap labor provides low costs goods and services, making prosperity more widely available. He also pointed out that temporary shifts in who is employed encourage individuals to market their services, and with a global market they have more potential job offers. Jan also pointed out some of the hypocrisy of the protesters against meetings promote free trade who show up in cheap sneakers made in so-called sweatshops, eat fast food made by low-paid workers, and organize their protests using computers that get cheaper in part thanks to the hard working people in Rawalpindi and elsewhere.

We missed Tim Barnett's speech on the advancement of social freedoms in New Zealand. Mr. Barnett is a member of parliament and apparently was instrumental in passing the Prostitution Reform Bill. We are curious about this bill and its provisions.

Sir Roger Douglas spoke on the history of free market reforms in New Zealand. In the early 1980s, the New Zealand government had taxed and borrowed to the point where they had ruined their credit in international markets. (Gee, sounds like the USA of 2005.) In 1984, Finance Minister Douglas insisted on across the board slashing of pork including farm subsidies and welfare. Massive privatization programs removed the government from many activities. One official stated, "We told all the vested interest groups to go to h*ll."

In 1987, the Labour Party was re-elected, and attempts began to dismantle the Douglas reforms, even though he was a member of Labour. Douglas left the parliament in 1990, and Labour lost that year. In 1993, Douglas founded the Association of Consumers and Taxpayers (ACT) which subsequently became a party under the new election system which makes it easier for new parties to win seats in parliament. Douglas has since left politics.

Our dear friend Wendy McElroy spoke on the topic of freedom and feminism. She pointed out that the 19th Century anti-slavery movement encouraged women to participate. Women naturally began to consider the slogans of abolitionism as applicable to themselves. Abolitionist Abbey Kelly noted, "we have good cause to be grateful to the slave...in striving to strike his irons off, we found most surely that we were manacled ourselves." She pointed out much of the damage that gender feminism has caused by instigating class warfare between the sexes, though the schism is beginning to heal. Individualist feminism hopes to bring "Equal rights for women and men, equal dignity and good will," in the words of Mary Wollstonecraft.

That's it for the conference. Next week we'll examine some of the other material from this issue of Freedom Network News including the essay on "the Ganesha Project."

Longevity

"Growth hormone replacement therapy can have a dramatic effect on regaining youthful vitality, increasing muscle mass, improving immune function, bettering learning and memory, and lowering blood pressure."
Carol Kahn, Life Extension, June 1997

Human growth hormone or HGH is a hormone produced by the pituitary gland. HGH promotes tissue repair, cell regeneration in bones, and assists the immune system in combating infections and disease. It also seems to promote weight loss, improved energy, and better sleep.

There are three ways to obtain the benefits of HGH. Prescription injectable HGH is extremely expensive. HGH supplements are available in two forms. One provides the amino acids essential to produce HGH. The other contains minute amounts of synthetic HGH. In both cases, the objective is to stimulate the body to produce more of its own HGH.

The excitement about HGH dates back to a 1990 study reported in the New England Journal of Medicine on 5 July 1990 detailing how injected HGH had reversed about ten to twenty years of aging in 12 men ages 61 to 81. Effects on lean body mass, loss of fat, skin thickening, improved bone density, and the size of liver and spleen suggest dramatic improvements in health.

Evidence suggests that the decline of HGH with age can be reversed.

Publication note: The Index!