"Amero" coming?

Jason

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I've just seen that Industrialsize's link includes some questions intended for school kids to answer. Here they are with the answers the kids are NOT supposed to give:


[SIZE=-1]Possible Topics for Class Discussions:[/SIZE]
  • [FONT=Arial,Helvetica][SIZE=-1]What would travelling across the US be like if each State issued its own currency? Try planning a trip from coast-to-coast.[/SIZE][/FONT]
In an age of plastic money, no problem at all. The last link is small change for penny purchases, but we are seeing plastic increasingly used for this also.
  • [FONT=Arial,Helvetica][SIZE=-1]How well would the US economy function today if each of the States issued their own currency (e.g. in terms of international trade and investment, trade and investment between the States, the tourist industry, etc.)?[/SIZE][/FONT]
Well of course it wouldn't be a "US economy". Each state economy would have the advantages that come from a currency which most closely matches their needs along with the disadvantages of currency separation. There are now financial tools which could faciitate trade and investment. Of course the problems are real and big, and these are surely a big reason why the US dollar will remain one currency for the USA - but nonetheless if there were ever the political will to divide the currency it could be done.
  • [FONT=Arial,Helvetica][SIZE=-1]How stable would fifty currencies be, in contrast to the Federal dollar?[/SIZE][/FONT]
There seems to be a minimum size below which a currency suffers a loss of stability. Europe has plenty of small countries whose currency is stable (Switzerland, Norway - even tiny Iceland with all their financial problems haven't had a crash). That said there is a perception that much under 5m population (in a European concept) and there is some sort of loss of stability. For example the Irish Republic has never had a truly independent currency because it has felt there would be stability problems (the punt was on a floating peg to sterling). Many but not all of the US states could float a stable currency. California certainly could.
 

Industrialsize

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I've just seen that Industrialsize's link includes some questions intended for school kids to answer. Here they are with the answers the kids are NOT supposed to give:


[SIZE=-1]Possible Topics for Class Discussions:[/SIZE]
  • [FONT=Arial,Helvetica][SIZE=-1]What would travelling across the US be like if each State issued its own currency? Try planning a trip from coast-to-coast.[/SIZE][/FONT]
In an age of plastic money, no problem at all. The last link is small change for penny purchases, but we are seeing plastic increasingly used for this also.
  • [FONT=Arial,Helvetica][SIZE=-1]How well would the US economy function today if each of the States issued their own currency (e.g. in terms of international trade and investment, trade and investment between the States, the tourist industry, etc.)?[/SIZE][/FONT]
Well of course it wouldn't be a "US economy". Each state economy would have the advantages that come from a currency which most closely matches their needs along with the disadvantages of currency separation. There are now financial tools which could faciitate trade and investment. Of course the problems are real and big, and these are surely a big reason why the US dollar will remain one currency for the USA - but nonetheless if there were ever the political will to divide the currency it could be done.
  • [FONT=Arial,Helvetica][SIZE=-1]How stable would fifty currencies be, in contrast to the Federal dollar?[/SIZE][/FONT]
There seems to be a minimum size below which a currency suffers a loss of stability. Europe has plenty of small countries whose currency is stable (Switzerland, Norway - even tiny Iceland with all their financial problems haven't had a crash). That said there is a perception that much under 5m population (in a European concept) and there is some sort of loss of stability. For example the Irish Republic has never had a truly independent currency because it has felt there would be stability problems (the punt was on a floating peg to sterling). Many but not all of the US states could float a stable currency. California certainly could.
It is against the US constitution. The constitution would need to be amended:
To Propose Amendments

  • Two-thirds of both houses of Congress vote to propose an amendment, OR
  • Two-thirds of the state legislatures ask Congress to call a national convention to propose amendments. This version has not yet been used.
To Ratify Amendments

  • Three-fourths of the state legislatures approve it, OR
  • Ratifying conventions in three-fourths of the states approve it. This method was used only once -- to ratify the 21st Amendment (repealing Prohibition).
 

maxcok

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Jason

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It is against the US constitution.

Interesting.

It is against the treaty obligations entered into by the EU member states for any state having once joined the euro (or committed to joining it) to ever leave. There is an enormous body of international law which ties the nation states into what is seen as an unbreakable currency union deliberately set up without the possibility of an exit route.

In view of the Eurozone sovereign debt crisis the legal and financial brains have been cogitating on how to break something which is unbreakable. There are three sorts of solutions:
* a country leaves the euro breaking the treaties, and in doing so leaves the EU. Of cause it could instantly be readmitted.
* a country remains with the euro as its currency but also issues a coupon used within its borders to pay wages, buy stuff, collect taxes - basically is used as a de facto currency while keeping the euro as a de jure currency.
* the euro itself is redefined as a currency unit expressed through national euros which trade against one another.

Just because something is against the US constitution doesn't mean that a constitutional lawyer couldn't find a way of making it happen. Laws are made by men and interpreted by men. In a nation with as many lawyers as the USA there will be plenty of brains who could find a way to do whatever they jolly well please. :rolleyes: This side of the pond the Eurocrats have half a century of experience of interpreting treaties in any way they jolly well please, and I daresay the USA can match the EU in the political black arts.

Not that I'm suggesting for a moment that the USA should go down this path. But who knows - in a couple of decades' time we might have decided that smaller currencies are better in the new economy and the USA might actually want to think the unthinkable.
 

Industrialsize

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Just because something is against the US constitution doesn't mean that a constitutional lawyer couldn't find a way of making it happen.
The Lawyer would have to convince 5 of 9 Supreme Court Justices that what he was arguing for actually ISN'T against the Constitution. But first, the Lawyer would have to convince the Supreme Court to even hear the case. They're a little picky about what cases they'll take up.
 

Jason

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The Lawyer would have to convince 5 of 9 Supreme Court Justices that what he was arguing for actually ISN'T against the Constitution. But first, the Lawyer would have to convince the Supreme Court to even hear the case. They're a little picky about what cases they'll take up.

Of course it is difficult. But if it were needed for the economic strength of the USA in an age when a big currency union had come to be seen as damaging then I daresay the supreme court justices would want to be convinced.
 

Industrialsize

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Of course it is difficult. But if it were needed for the economic strength of the USA in an age when a big currency union had come to be seen as damaging then I daresay the supreme court justices would want to be convinced.
You see, whether or not it "was needed for the economic strength of the USA" would not be allowed as an argument. The justices would dismiss such an argument. They are not legislators or lawmakers. The Supreme court justices are sworn to uphold the Constitution, not to preserve the economic strength of the USA. The Constitution would need to be amended which is a difficult legislative process which has rarely been used.
 

Bbucko

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Interesting.

It is against the treaty obligations entered into by the EU member states for any state having once joined the euro (or committed to joining it) to ever leave. There is an enormous body of international law which ties the nation states into what is seen as an unbreakable currency union deliberately set up without the possibility of an exit route.

In view of the Eurozone sovereign debt crisis the legal and financial brains have been cogitating on how to break something which is unbreakable. There are three sorts of solutions:
* a country leaves the euro breaking the treaties, and in doing so leaves the EU. Of cause it could instantly be readmitted.
* a country remains with the euro as its currency but also issues a coupon used within its borders to pay wages, buy stuff, collect taxes - basically is used as a de facto currency while keeping the euro as a de jure currency.
* the euro itself is redefined as a currency unit expressed through national euros which trade against one another.

Just because something is against the US constitution doesn't mean that a constitutional lawyer couldn't find a way of making it happen. Laws are made by men and interpreted by men. In a nation with as many lawyers as the USA there will be plenty of brains who could find a way to do whatever they jolly well please. :rolleyes: This side of the pond the Eurocrats have half a century of experience of interpreting treaties in any way they jolly well please, and I daresay the USA can match the EU in the political black arts.

Not that I'm suggesting for a moment that the USA should go down this path. But who knows - in a couple of decades' time we might have decided that smaller currencies are better in the new economy and the USA might actually want to think the unthinkable.

With complete respect, Jason, the US and the EU are entirely different species of government. European countries have centuries of identity as nation-states and millennia as discrete ethnic entities. Among many other reasons, that's why Wilson's hackneyed plan of creating a Frankenstein state like Yugoslavia (and Czechoslovakia, to a lesser degree) failed so completely. Walloons remain Walloon, not French.

With the exception of the thirteen original colonies (and, to a degree, Texas), no state had any real identity prior to its admission into the Union (aside from Indian issues, which are entirely off topic here), and even those differences would be incomprehensible to the average Korean (I'd bet), let alone someone from York or Cornwall :rolleyes:

If and when at some future date the US disintegrates (as it surely will, eventually), it will not be into 50 pieces but rather perhaps 5-7 pieces, based on culturally-shared values. Were that to happen, the currency of New England/New York would be more valuable than any other with the slightest chance of California edging it out. But the chance of this happening in my lifetime is as remote as spotting an iceberg off Ft Lauderdale beach.
 

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It wouldn't surprise me if at some point in the next century an "Amerozone" was established much like in Europe. It's pretty obvious world leaders are trying to unite the western world, but I suspect their efforts are going to have a minimal economic impact. Am I the only one that remembers Bush saying "I want to unite the western hemisphere?" He wasn't joking...and remember, democrats and republicans, 2 heads on the same snake...
 

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It wouldn't surprise me if at some point in the next century an "Amerozone" was established much like in Europe. It's pretty obvious world leaders are trying to unite the western world, but I suspect their efforts are going to have a minimal economic impact. Am I the only one that remembers Bush saying "I want to unite the western hemisphere?" He wasn't joking...and remember, democrats and republicans, 2 heads on the same snake...

I'm hardly a Bush fan, but I think he was just repeating, in his own clumsy, half-witted style, the Monroe Doctrine, which has been in place since 1823.

There are so many barriers to "unit[ing] the hemisphere": cultural, linguistic, economic, etc as to make such a thing impossible. Though there are patches and pockets of an affluence that approaches Canada or the US to our south, the overwhelming majority of residents live in a staggering amount of poverty.

Throughout the late 80s I had a Venezuelan lover and visited Caracas twice (long before Chavez). Though I hadn't any real expectations prior to my first visit, I was floored by my first views of the city as I emerged from a tunnel drilled through the mountains that separate the city from the beach-front airport: it looked as if mid-town Manhattan had been transported to a tropical valley and increased in size my a factor of 100. Ribbons of highways ran between enormously tall buildings, many of which were covered in tropical vegetation as far as the eye could see. Though many of these skyscrapers were of the traditional business-type, just as many (judging by the balconies) were premium residential towers, which contrasted sharply with my more lurid condescension of the "third world".

Then I looked at the surrounding mountains, which hem in the city everywhere, and saw that they were covered with barrios (squatters dwellings made of refuse and bits of stolen/salvaged wreckage). I was told that just before every election, the government supplies enormous quantities of white paint to give the mountains a cleaner, almost festive feeling which belied the retched poverty so extreme that, should one venture up and inside (which I certainly wasn't interested in doing), one would be kidnapped or killed, whichever would bring the greatest, quickest gain.

My lover's family lived in a gated community on the foothills of yet another range of mountains; we were greeted by guards carrying automatic weapons before being allowed to continue to the house, which itself was walled and had a sophisticated security system in place. Though they were obviously very wealthy and the house was nicely decorated (though very dated by about 10 years), there was nothing about the place that you wouldn't have seen in nicer parts of Scottsdale or Ft Lauderdale. It certainly wasn't lavish, though his dad was the CEO of an insurance company and his mom was a VP at the Central Bank of Venezuela. The one genuine sign of affluence (American style) was the fact the everyone in the family had a driver for his/her car, and even that was more of a security issue than anything to do with pampering: they (the drivers) were all armed.

Considering the immense wealth oil brings to Venezuela (the only non-Arab member of OPEC), they might seem a more likely candidate for some sort of "union" with the US, but it was/is so corrupt, the extremes between poverty and relative affluence so extreme, and their currency (The Bolivar) was/is so shakey that any real possibility of anything happening is too far into the future for us to bother with considering.
 

scotchirish

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Were that to happen, the currency of New England/New York would be more valuable than any other with the slightest chance of California edging it out.
What's your reasoning behind this? I would think it the opposite. I wouldn't think that new England has the physical resources necessary, or at least readily available, to support a strong currency.
 

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The problem with the Amero isn't that it's not a good idea(Canada, the USA, and Mexico already support eachother to a large extent) it's that it's not politically expediant. The Amero would be better off than the Euro, and we are on our way with NAFTA. To be honest, I think the US stands the most to lose in that transaction, and Mexico(obviously) the most to gain. That's why it won't happen. Canadians like think they have just as much or more control than the US does, and to a lesser extent Mexico. But, the US runs this continent, and I promise you when Brazil starts to(and it is quickly) catch up to us.... there will be an NAU. And it will be rammed down people's throats.
 

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What's your reasoning behind this? I would think it the opposite. I wouldn't think that new England has the physical resources necessary, or at least readily available, to support a strong currency.

New England has an almost entirely post-industrial economy, based on technology, education and medical services; it also has per capita one of the most highly educated and high-skilled workforces in the country.

You neglected that I'd included NY in the mix, as from a cultural standpoint at least, eastern NY State, LI and the city itself and New England are closely enmeshed, and have been so from the beginning.

If an abundance of natural resources guaranteed a solid currency and a high standard of living, Brazil would be one of the world's economic powerhouses, and Switzerland would be poor as dirt.
 

Bbucko

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... I promise you when Brazil starts to(and it is quickly) catch up to us.... there will be an NAU. And it will be rammed down people's throats.

Brazil, much though I admire the country, its music and its fabulously sexy people, is still mired in abysmal poverty. It will take generations to clear the favelas, if ever.
 

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Favelas have nothing to DO with economic might, FYI. We aren't talking about poverty, we are talking about the countries economy. And Brazil's is growing, rather quickly. That's like saying Over The Rhine in Cincinnati means the US is far behind the rest of the world. It doesn't....