There is a bit of glee circulating on the frozen tundra amid news that the Canadian dollar has hit the equivalence of 92.34 American cents, its highest point in 30 years. TD Securities Inc. chief currency strategist Shaun Osborne states that it is possible that the Canadian dollar could reach a value of .96 cents by June. Analysts agree that if commodity prices continue to rise, there stands a good chance that the two currencies would equalize. I say if that point is reached the two currencies should be immediately put into lockstep and our fluctuating currency exchange on our northern border should end forever. Could it be done? Yes, it could. Will it ever happen? Probably it won't.
Personally, I think the benefits would far outweigh the temporary disadvantages. Granted, I expect there would be quite a tussle in the commodities exchange for a time but that's a self adjusting system anyway. NAFTA paved the way for the "free flow" of goods and materials across our borders. Currency equalization would take the teeth out of much of the damage that tilted document has inflicted upon the American economy. I suspect that Canadian manufacturers might get just a little testy about the idea, but I believe that in the long run it would level the playing field for them as well as us. I also think it would give North America a lot more leverage in the world markets.
Economic idealists and world view visionaries already have a name for a singular North American currency. Do a web search for the word "Amero" and you'll spend the rest of your week reading about it. You'll receive every point of view you could ever imagine. Some say it would be the next step to the "One World Government," some say it would be a protectionist move. I say it's the most logical step toward stabilizing two very powerful yet unsteady economies. I see it as a grand statement to the rest of the world that there's still a force to be reckoned with over here pinned between the Atlantic and Pacific oceans.
Then, if we could just annex Mexico...
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Reader Comments (Page 1 of 1)
5-25-2007 @ 12:29AM
Gary Hopkins said...
One World Government---2012 -2015 ?,its just a matter of aprox 5-10 years.
5-25-2007 @ 12:35AM
Michael said...
IMHO, the Canadian economy is one of the most stable in the world. Not getting into long, drawn-out wars that force trillion dollar deficits might be part of it. The incredible sensibility and power of the Bank of Canada's inflation controls is probably another.
The only reason why the Canadian economy fluctuates as much as it does is the close ties to the US economy and it's fluctuations. Over the last two centuries, wartime has meant sacrifice for the general population. WWI & WWII had war bonds and rationing of metals, grains and milk. But in this "war" that is being fought, people continue to consume (largely on credit) and the Fed and the current administration are forced to prop up the housing and other key markets to avoid major corrections. It's highly unstable and while it has brought new highs to the stock markets, it brings new highs in the number of impoverished people and has widened the gap between the rich and poor. Now, I agree, the tow countries are vital trading partners and it is to our mutual benefit for both countries to avoid recessions, but how much longer can the US hold out? When this war is finally declared as over, either by this administration (unlikely) or by the next (more likely if it's Democratic rather than Republican) the taxpayers will be saddled with a huge deficit to pay off. Unpopular as it may be, consumption has to give way, otherwise the country is looking at the threat of major inflation and a serious recession. The Fed is smart enough to try and avoid this, but i just don't see a way.
But in any case, combining the two (or three) economies simply dooms Canada and Mexico to the USA's fate. It's dangerous and frankly, quite unfair. Will Canada suffer once the US hits tht major recession? Of course, 80% of Canadian exports go the the US. But will is be worse if the currencies are locked? Definately, as Canada has no chance to survive on it's own.
P.S. Another issue is that combining the currencies means that only one body (either the Fed or the BoC) will have control over the interest rate. Who would that be? Of course, most American proponents feel it would just be the Fed because their economy is larger and therefore they should have control. The entire idea of the combined currency smacks of selfishness and manifest destiny.
michael.cicconi@gmail.com
10-03-2007 @ 12:08PM
Richard said...
It seems to me that if in fact we change to the Amero the best investment for Americans is to buy Pesos before the exchange and actually make some very large profits.