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Amero is here
We now have a North American Dollar. It is unnecessary to call it the “Amero” or to wait for any formal codification of such a term. It is here and can be proven. The mere fact that a Canadian Dollar trades at par with the Federal Reserve Note makes the need for an “Amero” a moot point. Although, the United States has legal tender laws which force creditors in most situations to accept Federal Reserve Notes, a creditor could in theory accept a Canadian Dollar.
What about Mexico? The Peso trades at roughly 10.90 to the Dollar, but which one, that’s right, either the Canadian or U.S Dollar. All Mexico needs to do is chop off one zero and we’re essentially at 1-1-1 across the continent.
This happens all the time with currencies. The old French franc from the ’60’s lost two zeros and the Turkish Lira recently lost six zeros. There is no nefarious or underhanded action in removing zeros from currencies, it’s just plainly easier, that’s all.
The real trick is “harmonization” or “sustainability.” Yes, both Dollars and the Peso could all trade at 1-1-1 today, but will they indefinitely? The Europeans have an answer to that and it’s not the Euro, it was called the “currency snake.” Before, the Euro, all of the currencies of Europe were linked or fixed in terms of relative value to each other. The purpose was to maintain a sort of trading ratio to avoid one currency being too weak or strong.
How to sell this to the American people? “Son, this currency snake will protect your purchasing power!” How to sell it to the Canadian people? “Son, you won’t have to pay a premium for imports from America any longer!” The Mexican people, even easier, “Amgio, no more Peso crisis or devaluations like in the mid-90’s!”
This assumes it will even be sold to the people. But let’s assume we have relatively transparent and open countries. The above line of reasoning will absolutely work. The big trouble is selling the American people on a currency snake. Why? Because we’re stubborn, we’re fearful of foreigners even though we have tens of millions of them in our homes.
How will it work? “Don’t worry the Queen won’t be on your money, you can keep those greenbacks.” The symbolism will remain in place for now. Just like the Franc, Mark, Peseta and so forth all retained their respective identities despite being fixed in value.
Fixed in value by who or what? Don’t worry, I can assure you, nobody will be able to file a Freedom of Information Request Act inquiry to determine the answer.
Will foreign investors approve this action? Of course, the Europeans will feel it’s flattering that the North Americans are emulating them for once. East Asian exporters will adore being able to operate anywhere in North America without pesky currency problems.
When should you get worried? NOW. Alright, fine, here is a warning sign. When you start seeing prices quotes in Dollars (U.S) first and then in tiny print below it, Canadian Dollars & Mexican Pesos. Why? Because that is exactly what happened in Europe years before the Euro. Oh, and when all of the prices are basically uniform, you know it’s a done deal.
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