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North-American Montetary Integration: Here Comes
the Amero
By
Andrew G. Marshall
22/01/08 "GlobalResearch." -- - Many have now heard
rumblings of the “amero”, a proposed North American currency to
replace the Canadian loonie, dollar and peso. However, most of
the mentions of this concept, when discussed in the mainstream
media tend to focus on suggesting that talk of an “amero”, and
in effect, the accompanying North American Union, is nothing but
a conspiracy theory created by deluded xenophobes afraid of
immigration and globalization. The Boston Globe recently wrote
such a story, titled, “The Amero Conspiracy”, which stated, “The
SPP [Security and Prosperity Partnership] does exist, and its
tri-national task forces continue to meet, but its members
consider it a way for the United States, Canada, and Mexico to
collaborate on issues such as customs, environmental and safety
regulations, narcotics smuggling, and terrorism. The amero, on
the other hand, appears to be purely theoretical.”1
However, despite being conveyed as “purely theoretical”, a
recent article in the national Canadian newspaper, the Financial
Post, referred to the amero, not as a theoretical idea or
conspiracy theory, but as a potential reality. The article
entitled, Fix the Loonie, lays out the process to be undertaken
before the adoption of a continental currency known as the Amero.
The article was written as a response to a previous article
written in defense of Canada’s flexible exchange rate system, to
which it states, “David Laidler’s recent defence of Canada’s
flexible exchange rate system misses completely the point made
by Nobel Prize winning economist Robert Mundell in his famous
article on optimum currency areas. Mundell’s article has been
widely credited with providing the intellectual base for the
European Monetary Union and merits attention.”2 The article
continued elaborating on the previous point made by Mundell,
stating, “If flexible exchange rates are best for Canada on the
grounds presented by Laidler, why would flexible rates not be
best also for Alberta, Ontario or New Brunswick?” It continued,
“Milton Friedman’s response to Mundell was that he would not
advocate flexible rates for every possible region.”
The article contends that Canada is currently suffering from
what the author refers to as the ‘Dutch Disease’, “which is
named after the problems that developed in the 1960s when the
Netherlands sold natural gas that had been discovered on its
coast. The increases in Dutch exports of resources, like those
of Canada in recent years, resulted in a strong appreciation of
exchange rates, which was reinforced by interest rate policies
of central banks and currency speculators.” It further states
that, “The disease manifests itself through the loss of domestic
manufacturers’ ability to compete abroad and with imports.” The
author then contends that, “The disease manifests itself through
the loss of domestic manufacturers’ ability to compete abroad
and with imports,” and that, “The Bank of Canada can keep
interest rates low to discourage capital inflows and thus
exchange rate increases, but at the cost of fuelling
inflationary pressures.”
The author then states that there is only one true cure for
Canada’s ‘Dutch Disease’, “inoculation of the system by fixing
the exchange rate at a level that allows manufacturers to be
competitive, perhaps at the rate the Bank of Canada research
identifies as the long-run equilibrium, around US90¢.” The
author goes on to explain the reasoning behind this by giving
the example that, “The Netherlands and Austria in the years
before the introduction of the euro successfully operated such a
system and enjoyed near perfectly stable exchange rates against
the German currency. The essential ingredient in this success
was the official commitment of the central banks of these two
countries to maintain the same interest rate as that of the
German central bank.”
So if Canada were to do the same in relation to the US dollar,
then Canadian interest rates would be subject to the rates set
by the US Federal Reserve, with our Bank of Canada lock in step.
The author goes on to say, “An analogous commitment by the Bank
of Canada with respect to U.S. interest rates may not be
credible, tested by speculators and therefore ultimately doomed
to failure.” Then the article continues, and makes a startling
announcement:
“However, there is a solution to this lack of credibility. In
Europe, it came through the creation of the euro and formal end
of the ability of national central banks to set interest rates.
The analogous creation of the amero is not possible without the
unlikely co-operation of the United States.
This leaves the credibility issue to be solved by the unilateral
adoption of a currency board, which would ensure that
international payments imbalances automatically lead to changes
in Canada’s money supply and interest rates until the imbalances
are ended, all without any actions by the Bank of Canada or
influence by politicians.
It would be desirable to create simultaneously the currency
board and a New Canadian Dollar valued at par with the U.S.
dollar. With longer-run competitiveness assured at US90¢ to the
U.S. dollar. [Emphasis added].”
In summation, what the author is proposing is to fix the
Canadian loonie to the US dollar at US$0.90, create a currency
board, which would be an unelected, unaccountable, group of
people to handle our monetary policy, creating a route around
using the publicly owned Bank of Canada, to ensure the creation
of a ‘New Canadian Dollar’, which would be a prelude to the
Amero. The author then explains that, “Fluctuations in global
demand for natural resources will always result in competition
for labour and capital among Canadian manufacturers and
producers of resources. But, at least, the firms in these
sectors would no longer have to concern themselves with
exchange-rate fluctuations and policies of the Bank of Canada.”
The article finishes by stating, “There will also always be
changes in the U.S. (and Canadian) dollar exchange rate against
the euro and other major currencies. But these changes would
have minor effects on the Canadian economy because 80% of the
country’s trade is with the United States.”
The author of this article is Herbert Grubel, a professor of
economics emeritus at Simon Fraser University, who also happens
to be a Senior Fellow at the Fraser Institute, one of Canada’s
largest and most prominent pro-big business think tanks.3 Other
senior fellows at the Fraser Institute include Eugene Beaulieu,
who sits on the Academic Advisory Council to the Deputy Minister
of International Trade in the Department of Foreign Affairs and
International Trade for the Government of Canada, Martin
Collacott, former Canadian Ambassador, Tom Flanagan, ho is known
as the “man behind Stephen Harper”, and is a member of what is
known as the ‘Calgary School’, which is an unofficial group of
like minded thinkers who espouse neo-conservative views, and
hold significant influence in the current Conservative
government, even referring to Flanagan as the “Godfather of
Canada’s conservative movement.”4
Flanagan also used to work for Preston Manning, who is also a
senior fellow at the Fraser Institute, a former Member of
Parliament, and former leader of the opposition, and other
senior fellows include Gordon Gibson, a former Assistant to the
Minister of Northern Affairs and later Special Assistant to the
Prime Minister, Wilf Gobert, former Director and Vice Chairman
of Peters & Co. Limited, “an independent, fully integrated
investment firm which has specialized for 35 years in
investments in the Canadian oil, natural gas, and oilfield
services industries,” Michael Harris, former Conservative
Premier of Ontario, Jerry Jordan, former President and CEO of
the Federal Reserve Bank of Cleveland, Ralph Klein, former
Premier of Alberta, Rainer Knopff, a professor and also a member
of the ‘Calgary School’, and Brian Tobin, a former Industry
Minister.5
The author of the Financial Post article which mentioned the
amero, Herbert Grubel, wrote a paper for the Fraser Institute in
1999, entitled, “The Case for the Amero: The Economic and
Politics of a North American Monetary Union”, in which he laid
out the case for the creation of a regional currency for North
America.6 In this paper, Grubel wrote that, “The plan for a
North American Monetary Union presented in this study is
designed to include Canada, the United States, and Mexcio,” and
that, “The North American Central Bank, like the European
Central Bank, will have a constitution making it responsible
only for the maintenance of price stability and not for full
employment.”7
In discussing the issue of sovereignty related to a monetary
union, Grubel stated that he thinks that, “sovereignty is not
infinitely valuable. The merit of giving up some aspects of
sovereignty should be determined by the gains brought by such a
sacrifice.”8 He continued in saying, “It is important to note
that in practice Canada has given up its economic sovereignty in
many areas, the most important of which involve the World Trade
Organization (formerly the GATT), the North American Free Trade
Agreement,” as well as the International Monetary Fund and World
Bank.9 Despite admitting to several agreements and organizations
of which strip Canadian sovereignty, Grubel suggests that losing
sovereignty in these areas is still worth the benefits.
The introduction of the Amero is an integral aspect of the
process of creating a North American Union, much like the
European Union. This process is being undertaken through the
implementation of the Security and Prosperity Partnership of
North America (SPP), which was signed by the leaders of the
three North American governments in March of 2005. This
agreement is orchestrating the bureaucratic “harmonization”
among the three North American nations to pave the way for a
North American Community, akin to the previous European
Community, and ultimately, a North American Union.
The push for this agenda is being driven by the US-based Council
on Foreign Relations (CFR), the preeminent American think tank,
and the Canadian Council of Chief Executives, as well as the
Mexican equivalent, Consejo Mexicano de Asuntos Internacionales.
In May of 2005, the three groups, as a result of their joining
forces in a Task Force, released a report entitled, “Building a
North American Community,” in which they state that, “The Task
Force offers a detailed and ambitious set of proposals that
build on the recommendations adopted by the three governments at
the Texas summit of March 2005. The Task Force’s central
recommendation is establishment by 2010 of a North American
economic and security community, the boundaries of which would
be defined by a common external tariff, and an outer security
perimeter.”10
Thomas P. D’Aquino was the Canadian Co-Chair of the Task Force
report and is also the President and CEO of the Canadian Council
of Chief Executives, other Canadian members of the Task Force
report include Allan Gotleib, former Canadian Ambassador to the
United States, Pierre Marc Johnson, former Premier of Quebec,
John Manley, former Deputy Prime Minister of Canada, and after
9/11, negotiated the Smart Border Agreement with the US
Secretary for Homeland Security Tom Ridge, and Wendy Dobson,
former President of the C.D. Howe Institute, another one of
Canada’s most prominent think tanks, and former Associate Deputy
Minister of Finance in the Government of Canada.11
The C.D. Howe Institute has on its board of directors,
individuals from Imperial Oil Canada, a subsidiary of Exxon
Mobil, General Electric Canada, BMO Financial Group, TD Bank
Financial Group, Nortel Networks, Manulife Financial, Bank of
Nova Scotia, Enbridge Gas Distribution, EnCana Corporation, Ford
Motor Company of Canada, HSBC Bank of Canada, Astral Media,
Merrill Lynch Canada, CIBC World Markets, and N M Rothschild and
Sons Canada.12
In 1999, the C.D. Howe Institute published a report entitled,
From Fixing to Monetary Union: Options for North American
Currency Integration.13 In the paper, it is argued that, “The
easiest way to broach the notion of a NAMU [North American
Monetary Union] is to view it as the North American equivalent
of the European Monetary Union (EMU) and, by extension, the euro.”14
It continued in discussing the issue of sovereignty, stating,
“That a NAMU would mean the end of sovereignty in Canadian
monetary policy is clear. Most obviously, it would mean
abandoning a made-in-Canada inflation rate for a US or NAMU
inflation rate.”15
The concept of a North American currency has not only been the
object of discussion within powerful big-business think tanks,
but has, in fact, been discussed in government positions. In May
of 2007, Canada’s then-Governor of the Bank of Canada, David
Dodge, said that, “North America could one day embrace a euro-style
single currency,” the Globe and Mail reported. Further, the
article stated that, “Some proponents have dubbed the single
North American currency the ‘amero’,” and further, “Answering
questions from the audience after a speech in Chicago, Mr. Dodge
said a single currency was ‘possible’.”16
In November of 2007, the Globe and Mail reported that, “Canada
should replace its dollar with a North American currency, or peg
it to the U.S. greenback, to avoid the exchange rate shifts the
loonie has experienced, renowned money manager Stephen
Jarislowsky told a parliamentary committee yesterday,” and
quoted Jarislowsky as saying, “I think we have to really
seriously start thinking of the model of a continental currency
just like Europe.”17 The article continued, “Mr. Jarislowsky, a
former Canfor Corp. director, said the loonie’s rise to above
par with the U.S. dollar is destroying manufacturing and could
devastate the forest sector,” and that, “Mr. Jarislowsky said
Canada could either aim for a common North American currency or
peg the loonie to the U.S. greenback at about 80 cents (U.S.),
allowing it to float within a small band.” Jarislowsky, a
billionaire often considered to be Canada’s Warren Buffet, is a
member of several corporate boards, and is also a member of the
board of directors of the C.D. Howe Institute.18
Appearing on Larry King Live recently, former Mexican President
and initial signatory to the Security and Prosperity
Partnership, Vicente Fox, when asked a question about whether or
not it was possible to see a common currency for Latin America,
responded by stating, “Long term, very long term. What we
propose together, President Bush and myself, it’s ALCA, which is
a trade union for all of the Americas. And everything was
running fluently until Hugo Chavez came. He decided to isolate
himself. He decided to combat the idea and destroy the idea,” to
which Larry King interjected, “It’s going to be like the euro
dollar, you mean?” and Fox responded, “Well, that would be long,
long term. I think the processes to go, first step into is
trading agreement. And then further on, a new vision, like we
are trying to do with NAFTA.”19
So clearly, there is a move on toward a regional currency for
North America, in conjunction with the formation of a North
American Union. Monetary sovereignty, and especially the power
to create and issue money, is perhaps more central to the idea
of a free, democratic and sovereign nation than the right to
vote. If we do not have the power over the issuance of money, it
does not matter whom we vote for. It’s the Golden Rule: he who
has the gold, makes the rules. We, as Canadians, and other
peoples of their respective nations should never relinquish this
sovereignty over to regional boards, private banks, or other
unaccountable individuals. It is our right, not a privilege, and
giving up such a right is akin to giving up the right to vote;
it is anathema to democracy and a free society.
NOTES
1 Drake Bennett, The Amero Conspiracy. The Boston Globe:
November 25, 2007:
http://www.boston.com/bostonglobe/ideas/articles/2007/11/25/the_ameroconspiracy/?page=4
2 Herbert Grubel, Fix the Loonie. The Financial Post: January
18, 2008:
http://www.nationalpost.com/opinion/story.html?id=245165
3 Fraser Institute, Senior Fellows. Found at:
http://www.fraserinstitute.org/aboutus/whoweare/staff/seniorfellows.htm
4 Marci McDonald, The Man Behind Stephen Harper. Walrus
Magazine: October, 2004:
http://www.walrusmagazine.com/articles/the-man-behind-stephen-harper-tom-flanagan/
5 Fraser Institute, Senior Fellows. Found at: http://www.fraserinstitute.org/aboutus/whoweare/staff/seniorfellows.htm
6 Herbert Grubel, The Case for the Amero. The Fraser Institute:
September 1, 1999:
http://www.fraserinstitute.org/Commerce.Web/publication_details.aspx
?pubID=2512
7 Herbert Grubel, The Case for the Amero. The Fraser Institute:
September 1, 1999,
Page 4:
http://www.fraserinstitute.org/Commerce.Web/publication_details.aspx?pubID=2512
8 Grubel, Ibid, Page 17
9 Grubel, Ibid, Page 17
10 Council on Foreign Relations, Building a North American
Community. Independent Task Force on the Future of North
America: May, 2005, Page vii: http://www.cfr.org/publication/8102/
11 Council on Foreign Relations, Building a North American
Community. Independent Task Force on the Future of North
America: May, 2005, Pages 42-48.
http://www.cfr.org/publication/8102/
12 C.D. Howe Institute, Board of Directors. Found at:
http://www.cdhowe.org/display.cfm?page=board
13 Thomas Courchene and Richard Harris, From Fixing to Monetary
Union: Options for North American Currency Integration. C.D.
Howe Institute, June 1999:
http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999
14 Thomas Courchene and Richard Harris, From Fixing to Monetary
Union: Options for North American Currency Integration. C.D.
Howe Institute, June 1999, Page 22:
http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999
15 Thomas Courchene and Richard Harris, From Fixing to Monetary
Union: Options for North American Currency Integration. C.D.
Howe Institute, June 1999, Page 23:
http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999
16 Barrie McKenna, Dodge Says Single Currency ‘Possible’. The
Globe and Mail: May 21, 2007
17 Consider a Continental Currency, Jarislowsky Says. The Globe
and Mail: November 23, 2007:
http://www.theglobeandmail.com/servlet/story/LAC.20071123.
RDOLLAR23/TPStory/?query=%22Steven%2BChase%22b
18 C.D. Howe Institute, Board of Directors. Found at: http://www.cdhowe.org/display.cfm?page=board
19 CNN, CNN Larry King Live. Transcripts: October 8, 2007:
http://transcripts.cnn.com/TRANSCRIPTS/0710/08/lkl.01.html
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