Originally posted at the ForexFactory on Dec 1, 2008.
There is no Amero and will most likely never be an Amero.
Some conspiracy loonys see the free trade agreements as a step towards ” A New Global Order”, BUT, in reality there is a HUGE line between free trade agreements and having a common currency with 1 central bank.
Ask yourself why does Britain keep their precious pound when most other major European countries have the Euro? Wouldn’t you think it would be a no brainer to join?
Most important reasons are that they want to keep an independant monetary policy. If they converted to the Euro they would have to give control to the ECB and they may not want to do that as then they would need to become even more closely aligned with the other European economies. Similiary if their was an Amero U.S., Canada, Mexico would have to give control to only one central bank. With the U.S. economy being very different that Canada’s and Mexico’s noone in their right mind would do that. If the U.S. did that they would have to inherit all the problems and inefficiencies of the other countries.
There are even more problems to the Amero.
In order to get that done the governments would need to become more closely aligned with each other and would severely start to lose whatever control they had of their own countires. Not to mention the citizens of the countries probably would not like it.
How can an ECB set interest rate policy for the entire Eurozone when each countries economy is a bit different and thus may require different interest rates. What if Spain requires a cut in rates while the ECB feels inflation is too high to allow for it? This forces the European economies to become increasingly interconnected and dependant on each other above and beyond the normal level.
Similarly how is the Fed going to set interest rate policy for all of North America? In order to do so the governments would have to come under a more central authority so fiscal policy and laws can be applied to all of north america. Bilateral agreements just dont cut it. You need more centralized federal government for all of North America.
Why would the Americans want the Canadians to tell them what to do? Why would the Canadians want the Americans to tell them what to do?
I personally dont want any country to lose their sovereignty. I like having each country able to do their own thing economically. Let each country experiment with any form of communism, capitalism, socialism, central banking, etc. Then in the long run we will see whose system works out best for life, liberty, and the pursuit of happiness.