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Dr. Ayoub Issues a Warning
Concerning Bank Mergers, the Excessive Concentration of Financial and Commercial
Powers, and the Coming Downturn of the Business Cycle — And Calls for the Enactment
of a BANK LOAN SAFETY ACT to Guarantee and Secure the Economic Rights of Both Lenders and
Borrowers.
Flawed creation and distribution of
bank-money can unfold like a tidal economic wave with potentially terrible consequences
for large segments of society. Without a BANK LOAN SAFETY ACT and other regulations and
measures, the excessive concentration of financial and commercial powers can lead to
potentially catastrophic double runs on banks and on the justice system.
TORONTO, September 14, 1998 — Dr.
Edward E. Ayoub issued today a Warning concerning Bank Mergers in Canada and around the
globe.
"Before we approve any bank
mergers, we must unconceal the potential dark side of the excessive concentration of
financial and commercial powers," said Dr. Ayoub, CEO
and chairman of Macroknow Inc.
"I have investigated thoroughly
the last two business cycles in Canada — the world's 'best' place to live. I have
analyzed the most authoritative financial, economic, social, health, and welfare data. I
have used the rigorous methods of scientific inquiry. And I have applied the investigative
techniques of the best minds — since Plato and Aristotle. The empirical evidence is
loud and clear: Flawed creation and distribution of
bank-money can unfold like a tidal economic wave with potentially terrible consequences
for large segments of society."
"'Creative destruction' in Canada is
clearly linked to the space-time distribution and structure of money, including,
especially, bank-money. One can 'predict' increases in debt, non-accrual loans, consumer
and business bankruptcies, government deficits, the unemployment rate, the income gap,
etc., from changes in the structure and distribution of money, including bank loans. More
ominously, one can 'predict' increases in the total criminal code rate, the total property
crime rate, the number of therapeutic abortions, the number of hospital discharges (alive
or dead) for cardiovascular disease (ischemic heart disease, including acute myocardial
infarctions or heart attacks), and the number of suicides (total male and female), from
changes in the distribution and structure of money. In other words, small business
entrepreneurs, hospital administrators, police chiefs, etc., can anticipate changes in the
number of bankruptcies, in the number of heart attacks, and in the property crime rate,
respectively, from changes in a few charts, using data from a few banks — especially,
when financial and commercial powers are highly concentrated, as is the case in
Canada."
"The linkages are clear. A
significant increase in the concentration of financial and commercial powers, without a BANK LOAN SAFETY ACT and without regulatory
and protective measures, for both lenders and borrowers, is, without a doubt, fraught with
considerable economic and social hazards. Small funding-limited firms can be extremely
vulnerable to the whims of a few bankers. Between 1989 and 1994, the total number
of business and consumer bankruptcies in Canada reached a staggering 311,185. And this is
not even the number of people indirectly affected by the bankruptcies. Considering that Canada is blessed with incredible natural resources and
untold wealth, and that its population is a mere 30 million, in a geographical area
greater than China and Japan combined, the implied economic kill ratio for Canada borders
on economic terror."
"In 1994, the per-capita number of business failures
in Canada was about 46.9% higher than in the U.S.! Between 1966 and 1993, there were an
incredible 89,791 more business failures than would have been
expected had the business environment in Canada been identical to that in the United
States. Worse, many victims of 'creative destruction' have little,
if nothing, to do with the causality of the economic destruction they suffer. In this
sense, the 'free market' and the 'rule of law' are failing too many Canadians, and this is
dangerous. It is not surprising that many small business owners are not about to 'turn the
page' on the past. Loans, like other products in the marketplace, must be safe
and reliable. A fair marketplace for loans requires a BANK
LOAN SAFETY ACT."
"One thing is absolutely clear, a
population which is indentured with actual gargantuan debts, as is the case in the United
States and Canada, is not free. What is not clear,— what deserves the undivided
attention of the American and Canadian electorates—, is how past and future
counterfactual causality in the marketplace ought to translate into government and lender
accountability, responsibility, and liability."
"The next economic downturn,
which will hit Canadians and others starting probably around the year 2002, will have
devastating consequences, if global constructive interferences develop and the economic
interests of Canadians are not protected from potential abuses of global commercial
powers. Free people will not tolerate a situation where politicians and legislators become
manipulable pawns to massive concentrations of capital. Legislators
and business leaders who ignore my warning risk future catastrophic double runs on banks
and on the justice system."
Dr. Ayoub's Warning, and the methods,
findings, and conclusions of his investigations are detailed in The Excessive Power Series in two volumes:
World War III Against The Money Trust? and Bank-Induced Risks. The two volumes can be
accessed on the World Wide Web at http://www.macroknow.com.
—end—
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DECISION
ON BANK MERGERS |
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The
above Macroknow News Release was communicated to the Minister of Finance,
to members of the Standing Committee on Finance, to members of the Standing Committee on
Justice and Human Rights, to the Competition Bureau, and to other officials and
politicians.
The decision by Paul Martin, the Minister of Finance, to block the bank
mergers on December 14, 1998 is sound. His reasons include:*
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"[The
mergers] are not in the best interests of
Canadians."
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"The mergers would lead to an unacceptable concentration of economic
power in the hands of fewer, very large banks."
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"They would result in a significant reduction of competition."
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"[T]hey would reduce the government's policy flexibility to address
potential future concerns."
It is Dr. Ayoub's position that no such mergers should proceed before a
BANK LOAN SAFETY ACT and other measures are enacted.
The BANK LOAN SAFETY ACT must guarantee and secure the Economic Rights of
both lenders and borrowers.
*
See
Statement by The
Honourable Paul Martin Minister of Finance on the bank merger
proposals. Department of Finance Canada, Ottawa, December 14,
1998. Press Release 98-124, at
http://www.fin.gc.ca/news98/98-124e.html.
See
also The Globe and Mail,
December 15, 1998, at A1; and The Toronto Star, December 15, 1998, at A1. |
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