The Amero is Coming!

The Amero: An Introduction, A Short History and What It Would Mean for our Economy


The Internet has been abuzz lately about a proposed new currency, the “Amero,” which would replace the dollar to become the currency of Canada, Mexico, and the US. It has largely been written off as a conspiracy theory, but there’
s still room for speculation that an Amero currency could be in the works. Read on to get the lowdown on this funny money.

What is it?

The Amero would be a lot like the Euro, in that it would become the legal currency for members of a world region. Nearly all reports contend that it would be a mixture of the peso and both the American and Canadian dollars. Along with the amero would come a governing financial union, called the North American Union, which would manage the currency and possibly more.

The Case for the Amero

In 1999, Dr. Herbert Grubel wrote a piece entitled “The Case for the Amero.” In this essay, Grubel describes a monetary arrangement between Canada, Mexico, and the US that would create the Amero, a North American Monetary Union, and a North American Central Bank. He asserts that trade between the three countries would be stimulated because the costs and risks of currency exchange would be eliminated. Unlike today’
s reports, this piece assures readers that the monetary union would not threaten sovereignty or political independence.

Hal Turner

Hal Turner, a talk radio host, has had a number of things to say about the amero. He believes that implementation of the currency is imminent and that production of coins is already underway. This belief is largely based on a tip he reports to have received from someone inside the US Treasury. This person sent photos of gold and silver Amero coins, and eventually sent Turner a 20 Amero coin from the US Mint in Denver. The story has been largely written off as a hoax, but Turner adamantly stands by it.

Funny money

Although official production is debated, there are a few Amero coins already in circulation. Of course, they are not legal tender, but rather a coin design by seller coin producer. In addition to the Amero, Carr sells concept President dollars, parody state quarters, and other funny money. He is the designer for the New York and Rhode Island state quarters that are in legal circulation today.

Benefits and Drawbacks

So what would the Amero mean for the US economy? These are a few of the positive and negative effects that could stem from the adoption of a North American currency.
Save on currency transactions: Dr. Herbert Grubel estimates that Canada alone would save $3 billion from the Amero’s implementation.

Printing inflation would be more difficult:

There is large criticism of the Federal Reserve’s practice of printing dollars to pay debts and obligations, which causes the dollar to lose value. With a monetary union, the US would, one assumes, be held accountable by Mexico and Canada, and less free to continue this sort of practice.

Transition risks:

The worldwide transition from the dollar to Amero could risk the dollar/Amero’s status as a global currency, which may cause foreign investors to shift to the more established euro and yen.

Same problems: The amero largely does not address problems that currently exist with the dollar, like trade deficits, government debt, and status as a fiat currency.
Shared seignorage: The US currently collects net revenue from issuing the dollar, but with the Amero, any revenues would likely be shared with Canada and Mexico.
Dollar fall: The Canadian and US dollars are worth considerably more than Mexico’s troubled peso. A merging of the three currencies could result in a fall of both dollars to meet the peso.

What to expect

Forex traders have good reason to track the validity of the Amero because it has the potential to strongly affect the currency trading market. We’d lose the dollar and the pool of tradeable currencies would shrink by two. Additionally, with the introduction of the Amero, we could see a worldwide trend of consolidating currency. Europe already has the euro, and other world regions may follow suit.

It is also important to remember that the dollar is used in a number of the world’
s exports. For some, a transition to the amero could prove too risky and troublesome, causing a shift away from using American currency in this way. Even if the Amero comes out strong, the benefits of its use will be shared by all of North America, not just the United States.
Most importantly, the introduction of the Amero could create hard-to-predict fluctuations in the value of American currency. On one hand, teaming up with Canada and Mexico could prove to create a stronger competitor against the euro. Of course, worldwide uncertainty against the amero could cause a fall in North American currency value and a rally towards the euro or yen.
By Jessica Hupp

Amero taking down middle class

I'm asking The Bee to address the issue of the "Amero" and its part in the rapid devaluation of the U.S. dollar and in delaying response to securing the border. The "Amero" would be developed through the creation of the North American Union, which currently goes under the name"The Security and Prosperity Partnership" consisting of Canada, Mexico and the United States.

This idea was supposedly launched in March 2005.The Mexican and Canadian economies rely, primarily, on the United States for trade and economic stability. They are, according to the U.S. Energy Information Administration, our top suppliers of oil. How will union with two nations, one morally bankrupt and each possessing poorly performing currencies, advance the United States? It probably won't.Observers predict that this "union," or "partnership," will not only dissolve U.S. sovereignty but destroy our domestic shipping industries, redistribute our middle-class wealth and eliminate what we now consider border security. Will America be the next European Union?

MARTHA G. ACEVEDOOakdale

Destroying the Dollar………..Maybe the “Amero” is For Real

They talk about “breaking the buck”, well you could call the Bush Presidency an attempt to “Destroy the Dollar”.
Bush had the responsibility to monitor those in charge of the economy. He’s gone thru a few Treasury Secretaries, each time one of them told him he had to raise more money(read taxes) to support the wars, they were fired.
Anybody with a brain could’ve realized the explosion in real estate was being fueled by imprudent lending, over supply of artificially cheap money, and rampid fraud. The government knew the GSA’s needed tighter overseeing 4 years ago, but the administration was too busy chasing Saddam Hussein.
Now after the money we’re going to have to print to cover this bailout gets into circulation, what do you think is going to happen to the dollar? The more supply there is of something, even a currency, the less its worth. The future of the dollar is very murky. They is a very real possibility that US Sovereign debt, may actually get downgraded by the major rating agencies.

The Amero: North American Common Currency?

You can say it's a myth, but that won't make it disappear. Before it was introduced, was the EURO a "myth" too? We're half way there... like the great bail out, Americans will be manipulated to accept even more, increasingly extreme solutions to successive fiscal panic events.

America could soon gain painful first experience- the same pain it has often induced in countries like Argentina, Mexico, Germany and Brazil... hyper-inflation. As a part of a 'relief package', the “Amero”- the ultimate financial instrument, will be presented as a pre-packaged panacea or 'rescue' by our saviours- the bankers. This is worth the read as it relates to the bail out, the amero, and amero currency.

London stock trader urges move to 'amero'

In an interview with CNBC, a vice president for a prominent London investment firm yesterday urged a move away from the dollar to the "amero," a coming North American currency, he said, that "will have a big impact on everybody's life, in Canada, the U.S. and Mexico."

Steve Previs, a vice president at Jefferies International Ltd., explained the Amero "is the proposed new currency for the North American Community which is being developed right now between Canada, the U.S. and Mexico."

The aim, he said, according to a transcript provided by CNBC to WND, is to make a "borderless community, much like the European Union, with the U.S. dollar, the Canadian dollar and the Mexican peso being replaced by the amero."

Previs told the television audience many Canadians are "upset" about the amero. Most Americans outside of Texas largely are unaware of the amero or the plans to integrate North America, Previs observed, claiming many are just "putting their head in the sand" over the plans.
CNBC asked Previs whether he thought NAFTA was "working and doing enough."
He replied: "Until it created a lot of illegal immigrants coming across the border. I don't know. You get the pros and cons on NAFTA. For some people it is a good thing, and for other people it has been a disaster."

The speculation(Forex) on the future of a new North American currency came amid a major U.S. dollar sell-off worldwide that began last week.

Yesterday, the dollar also reached new multi-month low against the euro, breaking through the $1.30 per euro technical high that had held since April 2005.
At the same time, the Chinese central bank set the yuan at 7.0402 per dollar, the highest level since Beijing established a new currency exchange system(Forex) in 2005 that severed China's previous policy of tying the value of the yuan to the U.S. dollar.

Many analysts worldwide attributed the dramatic fall in the value of the U.S. dollar at least partially to China's announcement last week that it would seek to diversify its foreign exchange currency(Forex) holdings away from the U.S. dollar. China recently has crossed the threshold of holding $1 trillion in U.S. dollar foreign-exchange reserves, surpassing Japan as the largest holder in the world.

Barry Ritholtz, chief market strategist for Ritholtz Research & Analytics in New York City, in a phone interview with WND, characterized today's downward move of the dollar as "wackage," a new word he coined to convey that the dollar is being "whacked" in this current market movement.

Ritholtz told WND that yesterday's downward move "was a major market correction that points to the risk of subsequent downside to the dollar."
Asked whether he would characterize the dollar's downside move as signaling a possible collapse, Mr Ritholtz told WND, "Not yet."

Ritholtz pointed out market professionals had long looked at a dollar collapse as a "low probability event," but the recent fall suggests "the probabilities have increased of a major dollar correction, or even of a collapse."

U.S. trade imbalances with China have hit a record $228 billion this year, largely reflecting a surging flow of containers from China with retail goods headed for the U.S. mass market.
Secretary of Commerce Carlos Gutierrez is in Bejing leading a trade delegation of more than two dozen U.S. business executives.

"The future should be focused on exporting to China," Guiterrez told reporters in Bejing, noting that this year, U.S. exports to China are up 34 percent on a year-to-year basis, surpassing last year's gain of 20 percent.

One way to improve the U.S. trade imbalance may be to ease up on restrictions of exporting high-tech products and allowing technology transfers to China, a move likely to be politically charged in the U.S.

The decline in value FX of the dollar will also make U.S. exports more attractive and Chinese exports to the U.S. more expensive.

In February 2007, a virtually unprecedented top-level U.S. economic mission is scheduled to travel to China. Included in the mission are Treasury Secretary Henry Paulson, Jr., Secretary of Commerce Carlos Gutierrez and Federal Reserve Chairman Ben Bernanke.

Previs declined to be interviewed for this article, telling WND in an e-mail he did not want to be quoted directly in any article that may express a political point of view.

What Will the Amero Currency Exchange Rate Be?

The exchange rate for the Amero currency are the wild card for the introduction of a new Amero dollar. To make citizens of the United States, Canada and Mexico accept a new currency two things are going to be needed. We are seeing the first with a decline in the US dollar.

The second condition would be to set a exchange rate that all countries view as favorable.If the US dollar continues to collapse as liquidity is pumped into the markets, Americans will welcome a new Amero. As radical as it seems now if the public is drowning they will gladly grasp at any life line that is thrown their way. The Amero will be sold as the solution to economic woes and a way to get out from underneath a devalued dollar.

We are now seeing the Government panic over simple market cycles. The pain of these over reactions will be felt very shortly, of course markets can be kept afloat with devalued dollars if that is the goal. The administration had projected a balanced budget shortly based on declining deficits but you can throw that out the window.Many articles have speculated what will be in it for Canada? Well for a long time Canadians have suffered from a dollar that was worth 60% to 75% of what the US dollar was worth. This was until recently when the Canadian dollar caught and surpassed the USD and has since traded about par with the US dollar. This sparked what could only be described as euphoria among the main stream media in Canada. It also sparked many a shopping spree to south of the border.

For many years Canadians had only dreamed of a dollar that was par and if you asked most Canadians if they would like there dollar to be pegged at par with the US dollar they would say, "yes". Of course the solution to a par dollar will be the Amero currency. Pressure from the US and Mexico would also make it impossible for Canada not to switch to a Amero, not doing so would be economic suicide.

Amero Currency Exchange ( Forex) Rate Estimate

$1 Amero= $1 USD
$1 Amero= $1 CND
$1 Amero= 10 Mexican Peso's

Ultimately the Amero currency would go head to head against the Euro. The end game for a new world order could see the Amero gain on the Euro dollar till they are par. Setting the stage for one global currency.

Author: Amero Investor
Source: ameroblog.blogspot.com