Amero - New North American Currency by 2010?

[gordholio]

I just heard about a common currency for North America (Canada, US and Mexico) that is being proposed by some people.

Here is a link to some information about it:

The Case For The Amero (http://oldfraser.lexi.net/publications/critical_issues/1999/amero/)

There is also talk of a North American Union - a political union of the three countries.

If you want to listen, they're talking about it on Coast to Coast right now:

Listen on 640 CFMJ Toronto (http://provisioning.streamtheworld.com/asx/CFMJAM.asx)

[UrbanPoet]

does anyone know what happens if there is one common currency world wide? :-0

[CodecX81]

Mmmm Globalization is yummy, it brings up some pro's and cons, but I'd have to say if we had a global economy, we'd have to change how the entire world does business. It does not work with our current business model.

but this is the excerpt from wikipedia:

Some of the benefits cited by advocates of a global currency are that it would:

* Eliminate the direct and indirect transaction costs of trading from one currency to another.
* Eliminate the balance of payments/current account problems of all countries.
* Eliminate the risk of currency failure and currency risk.
* Eliminate the uncertainty of changes in value due to exchange-caused fluctuations in currency value and the costs of hedging to protect against such fluctuations.
* Cause an increase in the value of assets for those countries currently afflicted with significant country risk.
* Eliminate the misalignment of currencies.
* Utilize the seigniorage benefit and control of printing money for the operations of the global central bank and for public benefit.
* Eliminate the need for countries or monetary unions to maintain international reserves of other currencies.


Arguments against a single global currency

Many economists argue that a single global currency is unworkable given the vastly different national political and economic systems in existence.


Political difficulties

In the present world, nations are not yet able to work together closely enough to be able to produce and support a common currency. There has to be a high level of trust before different countries before a true world currency could be created. Critics argue that a world currency would undermine national sovereignty.

Economical difficulties

Some economists argue that a single world currency is unnecessary, because the U.S. dollar already provides many of the benefits of a world currency while avoiding some of the costs.

If the world does not form an optimum currency area, then it would be economically inefficient for the world to share one currency.

A world currency would not allow for adjustments by national central banks to accommodate local economic problems. A single currency can only have a single interest rate. However, different regions in the world, with varying rates of economic growth, may require different interest rates.

As an example, consider a hypothetical Country A that is a petroleum exporter and a hypothetical Country B that is an oil importer. If the price of oil goes up, this is an advantage for Country A, and a disadvantage for Country B. If the oil price goes up, this stimulates the economy of Country A; to avoid "overheating" the economy, Country A's central bank would support increasing the interest rate of Country A. At the same time, Country B's economy is damaged by the increased price of oil, and Country B's central bank would seek to lower the interest rate in order to stimulate the economy. However, Country A and Country B would be unable to do this if they shared the same currency.

[gordholio]

Just as there is a European Union, there are some people on this side of the Atlantic talking about a North American Union.
If it can happen in Europe, it can happen here; but I'm not saying it will, just that some people are talking about it - some people in the governments as well (but not really that much publicly).

Found this on Wikipedia:

North American Union

The North American Union is a proposed international government encompassing the nations of Canada, the United States and Mexico. The blueprint for this governing body was laid out in a 2005 report entitled "Building a North American Community" published by the Council on Foreign Relations (CFR). It is modeled loosely on the European Union. A proposed common currency would be called the "Amero," modeled after the EU's common currency, the Euro. The three nations that make up the NAU would ease remaining trade and travel restrictions with each other, making entry into their countries from the other two nearly as easy as crossing state or provincial lines within each of said countries. Because of this, the NAU is seen by many in the United States as an end run around Federal immigration laws and eliminating the need for amnesty for illegal immigrants currently being debated in the US Congress. This proposed supranational government is also seen by many as surrendering US sovereignty, which undermines the United States Constitution. Because of these and other provisions that would be enacted if the NAU was put in place, it is considered to be nothing more than an illegal international treaty by many in the United States.

A website, www.spp.gov, has been said to be the site for the North American Union set up by The United States Chamber of Commerce.