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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



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:*

  • "[The mergers] are not in the best interests of Canadians."
  • "The mergers would lead to an unacceptable concentration of economic power in the hands of fewer, very large banks."
  • "They would result in a significant reduction of competition."
  • "[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
See also The Globe and Mail, December 15, 1998, at A1; and The Toronto Star, December 15, 1998, at A1.




Press Contact
Dr. Edward E. Ayoub
Edward Ayoub's Website



Humanity faces a multiplicity of global crises – all having the same cause: A rule of law that is rooted in archaic and Ptolemaic philosophies.

Capitalism – the freedom to create, own, and trade assets – has lost its compass. It has been transformed into debt-based capitalism – into what the first lawgivers called "usury." And "usury," most people will tell you, has . . .

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Special Features Online

The Excessive Power Series (Vol. 1 and 2)  includes colorful, easy to understand tables and illustrations— 43 plates, 38 charts, and 10 tables. Here are a few sample plates. To preview a plate, click on its title. Please allow sufficient time to download.

  • Part-Time Employment
    [Speculative Forecast for Part-Time Employment at the Royal Bank of Canada for the Year 2000 and Beyond]
  • Business Cycle
    [Links Between the Distribution of Bank-Money and Unemployment]
  • Tacit Collusion at Top Banks?
    [Powerful Evidence of "Conscious Parallelism" at Canada's Top Three Banks]
  • Credit Crunch
    [Evidence of a "Credit Crunch" at Canada's Top Three Banks]
  • Creative Destruction or Predation?
    [Empirical Evidence of Substantial Increase in the Perniciousness of the North American Marketplace]
  • Orwellian Web
    [Who Owns? Who Gets Loans? Who Controls?]
  • Origin of Capitalist Selection
    [Darwinisticism in the Law]
  • How to Destroy a High-Tech Firm
    [The Physics of "Creative Destruction" for Investors and Entrepreneurs]

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Dr. Ayoub's Bio 

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Last modified: August 30, 2008 04:16 PM Pacific Time [E]