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Here is info that says Flax oil is better than Flax seeds because flax seeds contain an enzyme inhibitor. This enzyme inhibitor, however, also inhibits human digestive enzymes. Therefore seeds and legumes interfere with good digestion.
Flax seed oil is important to carry vitamin "A" to all the cells of the body, thus activating the immune system. However, Vitamin "A" is fat soluble and works better with the flax seed oil as a carrier. In order to obtain an adequate quantity of oil from the seeds, a huge quantity would need to be consumed, along with the enzyme inhibitors.
Another reason for not using the flax seeds is that all nuts and seeds, while they are fairly rich in proteins, contain proteins that are not in good balance. These seed proteins are usually high in l-arginine (one of the amino acids) and low in l-lysine (another amino acid). That is not acceptable, this ratio should be reversed, since l-lysine stimulates the immune system while the high l-arginine depresses the immune system.
the oil contains adequate amounts of the invaluable linolenic and linoleic acids. These help to dissolve and carry off cholesterol plaque that has formed in the arteries of virtually all people. Thus, circulation improves and plaque clears, also preventing possible heart attacks and/or strokes.
http://www.gerson.org/answer/flaxseed.shtml