first majestic silver


November 8, 2002
"An aristocratic body is composed of a certain number of citizens who,
without being elevated very far above the mass of the citizens,
are nevertheless permanently stationed above them-a body which
one can touch but never strike, one with which the people are
in daily contact but with they can never mingle."
- Alexis deTocqueville, Democracy in America

This essay is the result of giving much thought to the concept of globalization and the way it is presented to us in the media.

Globalization is one of those words that we read and hear a lot but is never defined. I searched the web and found many definitions. Some centered on the concept of "corporatization" and I ruled these out. One of the better definitions comes from Kenneth Janda at Northwestern University 1

Globalization defined: In its simplest terms, globalization refers to the increasing interdependence of citizens and nations across the world. In 2001, an international consulting firm, A.T. Kearney, reported the extent of "globalization" for fifty countries with "advanced economies" across the world based on data from 1995 through 1998. 2 Recently, the same firm revised its measures and updated its study with data for 1999 and 2000 while extending it to 62 nations. 3

Briefly, the latest methodology involved using multiple indicators grouped into four dimensions:

  1. Economic integration: trade, foreign direct investment and portfolio capital flows, and income from nonresident employees and from foreign assets;
  2. Personal contacts: international travel and tourism, international telephone calls, and cross-border transfers;
  3. Technology: number of internet users, internet hosts, and secure servers;
  4. Political engagement: number of memberships in international organizations, participation in U.S. Security Council missions, and foreign embassies.

Another definition that I thought was good comes from Michigan State University 4:

Our current reality is one of increasing globalization-defined as the social, economic, cultural, and demographic processes that take place across national boundaries. Although arising from easier communication, travel, migration, and the mass dispersion of cultures, globalization is played out in local contexts and mediated by existing linguistic, cultural, political, and historical patterns. Globalization blurs cultural and institutional boundaries, sometimes causes strong counterreactions, and intensifies interactions among social, cultural, environmental, political, and other issues.

So why does the essay titled "Cartelization" begin with definitions of globalization? Because I believe that globalization, as defined above, has much merit but is increasingly used to obstruct what is really happening in the world.

Globalization is a fancy term meaning the migration of people, ideas, production, technology, etc., around the world. In a free and open society this should come as no surprise. But in the mainstream media globalization is used to describe something else entirely. The mainstream media uses the word globalization to describe a destructive action being perpetrated by the producers of the world.

What I believe is the truly destructive force happening in the world right now is.


When angry mobs in Seattle or Genoa or more recently in Washington DC are protesting against globalization, they are really protesting against cartelization. When the IMF or World Bank meets in Washington DC and a group of people protest against globalization, they are really protesting against cartelization.


The "bad boy" of the cartels. The cartel that gets all the press because the countries, i.e. governments, represented by OPEC control enough of the world's supply of crude oil to make a difference in the price.

OPEC is a collectivist group of governments trying to "manage" or "manipulate" (choose your own verb) the price and supply of the commodity known as crude oil.

Oil Cartel

Made up of the world's major oil companies. A recent story in the Washington Post 5 discussed the effect a "regime change" in Iraq would have on the world's major oil companies.

The Post openly states that the world's major oil companies are maneuvering to get a "cut" of the Iraqi oil after Saddam is removed from power. The US is using this "cut" to bribe the governments of the non-US oil companies (France, Russia, Great Britain and China,) to support the "war effort" in exchange for some of the "spoils".

"It's pretty straightforward," said former CIA director R. James Woolsey, who has been one of the leading advocates of forcing Hussein from power. "France and Russia have oil companies and interests in Iraq. They should be told that if they are of assistance in moving Iraq toward decent government, we'll do the best we can to ensure that the new government and American companies work closely with them."

In other words the new Iraqi government will denationalize the oil fields which the Ba'ath Party nationalized in 1972-75, handing out franchises to the old cartel that ran things back then with the United States creating the new Iraqi government, like it did the new Afghanistan government.

Gold Cartel

Thanks to Bill Murphy at GATA we have read a lot in the last three years about the Gold Cartel. The Gold Cartel is comprised of a collectivist group of banks and governments trying to "manage" or "manipulate" the price and supply of the commodity known as gold.

Banking Cartel

The banking cartel is a group of banks set up by government to "manage" or "manipulate" the price and supply of the commodity known as money (or credit).

Above the domestic banking cartel sits the international banking cartel and it's various sister organizations such as the IMF, World Bank and Bank for International Settlements.

On a monthly basis the heads of the various domestic banking cartels, such as Mr. Alan Greenspan, meet in Basle, Switzerland, to discuss who knows what. Basle is the home of the Bank for International Settlements, an organization chartered by governments: "The BIS is an international organization which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability."

"In addition to placing funds in the international markets, the BIS sometimes makes short-term advances to central banks. These usually take the form of secured credits against gold, other collateral or currency deposits held with the BIS, but on occasion they may be granted on an unsecured basis, for example in the form of a standby credit on which a central bank can draw at very short notice. "

The IMF is now proposing bankruptcy protection for sovereign countries. This tells me that the banking cartel has something planned which they are not discussing in public. Could this be the next step towards the "global currency?" Or, coupled with the new bankruptcy laws in the US, the banking cartel could be setting up to scoop up a large portion of the world's property and wealth as the defaults increase.

If this was not bad enough, in the US we have the top 7 banking institutions sitting on almost $50 TRILLION of derivatives (notional value). It should be a good bet that one or more of these institutions goes the way of LTCM, thus allowing the banking system to further "cartelize". I suspect the same thing may be happening in Germany. Two weeks ago the financial media was abuzz with stories of large German banks (Hypo, Dresdner, Deutsche, Commerz) being in serious trouble. Germany has many, many local and regional banks. It may be that the Germans do something like the Wall Street bankers did in the 30s.

I have read in the past where the somewhat newly formed Federal Reserve did not come to the assistance of many banks in the US after the stock market crash in 1929. The reason was that many banks outside the Northeast US were still not members of the Federal Reserve System. Thus, to bring them into the system, it was necessary to cut off their credit, let them fail, then buy them for pennies on the dollar.

Big 3

The Big 3 auto companies in the US have had control of the domestic automobile industry for most of the last 50 years. When a serious threat comes along to their empire the Big 3 has used the force of government to wipe out that threat.

In the late 1940s a man named Preston Tucker had an idea to build a better automobile. He set up a dealer network, plants, and equipment and was about to go into mass production. Suddenly he started being harassed by the US Federal Government. He was only able to produce 50 cars before being put out of business by the US government. 6

I have seen a Tucker "48" (or Torpedo) at the Henry Ford Museum in Dearborn, MI. It is an awesome car for those of you who like cars as I do.

Legal Drug Cartel

The legal drug cartel consists of corporations, mostly in the US and Europe, who pay a "tribute" to government for the right to market drugs to the people.

In the US this "tribute" is paid to the Food and Drug Administration (FDA) to get the FDA's "approval" to market and sell the drug.

As is always the case, the government agency, this time the FDA, continues to reach for more areas to regulate. The FDA has continually tried to move into the nutritional supplement area. The FDA forbids nutrient supplement companies and aspirin companies from communicating truthful, non-misleading, important, even lifesaving information about their products to the public.

This year in Europe, the European Parliament - a 626-member legislative body representing the 15 European Union countries - passed the "EU Directive on Dietary Supplements," which classifies vitamins as medical drugs rather than food supplements. The Directive grants a transition period of three years for vitamin supplements already on the market. But in 2005, every EU country will be required to implement the Directive.

As it currently stands, in just three years a wide range of natural remedies will be banned across most of Europe, making as many as 300 ingredients - including chromium picolinate, yeast, lysine, and selenium - illegal for over-the-counter sale. Other supplements that remain in stores will contain very low dosage amounts - not enough to provide any real therapeutic value. 7

Who is behind this move to make nutritional supplements illegal? The legal drug cartel, of course.

"For instance, a prominent EU Commissioner, Frits Bolkenstein of the Netherlands, is also a member of the supervisory board of the second largest pharmaceutical company in the world - Merck, Sharp and Dohme. "

For more information on what the FDA and CODEX are planning for you I suggest you start here:

Genetically Modified Food Cartel
According to Bob Chapman at the International Forecaster "About 70% of processed food contains genetically modified corn, soybeans or some other crop. In the November election Oregon has a measure requiring labels for products with GM content. If this measure passes we see the measure on all state ballots. If the food is safe industry should be willing to label it thus. The anti-labeling combines of PepsiCo, General Mills, Kellogg, ConAgra, Sara Lee and HJ Heinz have spent $1.9 of $4.6 million of their war chest. The pro-label group has $84,000 to fight the behemoths. Isn't America great, anyone can challenge the cartels? The measure has a chance of passing and if it does we'd expect all labeled processed foods for the nation to be so labeled."

Mass Media Cartel
"For all their economic clout and cultural sway, the ten great multinationals profiled in our latest chart--AOL Time Warner, Disney, General Electric, News Corporation, Viacom, Vivendi, Sony, Bertelsmann, AT&T and Liberty Media--rule the cosmos only at the moment. The media cartel that keeps us fully entertained and permanently half-informed is always growing here and shriveling there, with certain of its members bulking up while others slowly fall apart or get digested whole. But while the players tend to come and go--always with a few exceptions--the overall Leviathan itself keeps getting bigger, louder, brighter, forever taking up more time and space, in every street, in countless homes, in every other head.." 8

The biggest cartel of all - Government

Of course none of the world's cartels could exist without the one cartel that has the "monopoly on force", GOVERNMENT.

By government cartel I obviously mean the US and its satellite organizations, United Nations, World Trade Organization, International Monetary Fund, etc., with the backing of the US Court system and the military.

Just as the credit bubble is the foundation for all the other bubbles in the global financial system, government, especially the US Imperial government, is the foundation for all of the world's cartels.

The cartels operate with the blessing of the government in a symbiotic relationship. The government acts as the "enforcer" while the cartel members share the spoils with the government.

Cartels Will Continue to Grow

As the world economy continues to decelerate we will see more cartels take form. Here are a couple of examples:

The Airline Cartel will continue to take shape as the airline industry collapses under the weights of debt, unions and bad management. As the large carriers (UAL, Delta) move into bankruptcy government will move in to "save" them. This will cause a further consolidation, which is what a cartel is all about. Many countries around the world have a "national" airline. The US would seem to be headed in that direction.

The major telecommunications companies are in big trouble, both in Europe and the US. France and Deutsche Telecom, SBC, Verizon, ATT and Bell South are all suffering. Throw in the telecom equipment makers like Lucent and Nortel and you see major bankruptcies on the horizon. Look for further consolidation of the Telecom Cartel. A return to the world of "T", one telephone company, is not out of the question.

I also see where a new "anthrax vaccine" cartel is beginning to form. The US government issued contracts to two companies to develop a better anthrax vaccine. 9 "Consideration for this subsequent manufacturing contract will be competitive and not limited to the two companies awarded contracts today," it said.

There are also many cartels which I have not mentions. I am sure people reading this can think of others.

The Call For More Cartels

I hope that I have been able to paint a big picture of what I see happening in the world today. A global "aristocracy" has been built.

In the United Nations document "Our Global Neighborhood" 10, they discuss the idea of "working with the multinationals". That's code for "creating bigger cartels." This is the aristocracy in action.

I see today that the Republicans have won both houses of Congress. See the pharmaceutical stocks? The pharma people and their "investors" are licking their chops at the thought of getting more government "business" pushed their way.

The questions to ask are:

Do we really need more cartels in the world controlling more of the products we use and consequently, more of our daily lives?

Do we need, for example, a fuel cell cartel or a natural gas cartel sponsored by government in an attempt to reverse the current economic malaise?

The Keynesian method has been proven a failure. When something is proven a failure, why try it again?

Let's do away with the modern day aristocracy. We need to do away with the power that the current group of cartels has and get back to a free society and free markets. The only way to do that is to weaken the strongest of the cartels.

In the US the way to do this is to stop voting for Democrats and Republicans.



David Champeau
[email protected]


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The periodic symbol for gold is AU which come from the Latin for gold aurum.
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