How the Amero Idea Arose
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The Euro introduction to the world’s financial markets in 1999 sold the idea of one currency for many countries seem eminently possible. The Euro made other nations nervous about managing to compete with this new stronger currency. These factors led nations like Canada, USA, Mexico, Argentina, Brazil, Chile, and Columbia to explore the possibilities of creating an ‘Amero’ as a counterfoil to the Euro. The Amero as a common currency, not necessarily the USD, all countries in the Americas could use as their own. Some experts believe that the complete Dollarization – ‘Amero’ associated with the continent’s Free Trade Agreement of the continent will not occur for 20-25 years. The creation of nationwide currencies and removal of some unwanted currencies is required, according to economists. The world could abandon unwanted currencies, replacing them instead with euros, dollars, and multinational currencies yet to be born. Countries must abandon monetary nationalism and central bankers say a common digitalized currency with the USA participation, is definitely possible, if the power elite cause the dollar to be devalued to the point where Americans reluctantly accept the Amero. The Amero could be presented to the American public as the administration’s solution for dollar recovery, if a crisis occurs.
Does an Amero Exist?
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The Amero is a hypothetical common currency to replace the Mexican Peso and the U.S. and Canadian Dollar and requires a North American Union to combine the three economies, based on the Euro and European Union. Serious proposals by lawmakers of the three countries were never considered though conspiracy-oriented rumors of an Amero abound. A photo of an Amero coin, turned out to be online images of spoof coins while the Amero is not traded in the interbank market. So, the Amero remains a hoax. The Amero idea was floated by Herbert Grubel, an economics professor at the Fraser Institute, as a combined currency of the three North American nations would increase trade by reducing complex trades involving more than a single currency and to eliminate exchange rate risk, besides reducing borrowing costs and eliminate wage arbitrage, the practice of hiring labor in other countries with an unfavorable exchange rate, to take advantage of the cheap labor that results.
Drawbacks of an Amero System
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The lack of enthusiasm for a common currency among voters in the three countries and distaste for common currency has increased with the well-known Euro problems, such as unemployment while reducing capital formation among weaker economic partners of the EU. American Exceptionalism is a populist credo holding that the USA is unique. The Amero requires Americans to abandon the dollar for a common currency, sacrifice conducting independent trade negotiations and enforce rules and regulations decided by a controlling body and not the U.S. Congress. For Europeans, this requirement was difficult. In Great Britain, resentment over this major requirement led to Brexit in early 2016. The economies of the U.S., Canada, and Mexico differ much more than among EU members. The US Dollar is the primary reserve currency of the world, while the Mexican peso is an emerging market currency. The economic diversity makes an Amero implausible.
The idea of The United States of America in 1775, was a melding of currencies, economies, and politics, once considered an unworkable, implausible idea.
