A view on the amero, the proposed currency

A link is offered below. The link goes to a web page with an article by a professor at the University of Havana. The topic is the amero. The amero is a proposed currency for the 3 member countries of NAFTA. It is not legal tender, yet. But it was proposed under wraps, and as of yesterday, it was not a currency that has been discussed openly and in public by anyone of the 3 congresses or parliaments of the 3 members: Canada, Mexico and the US. The US Congress has not discussed this proposed currency openly, yet. The Federal Reserve Board has not brought the topic into the open, yet. Neither has any one of the 12 Federal Reserve Banks. The Bank of Canada has not yet brought the issue to the fore, and neither has the Banco de Mexico, in their respective territories. Some internet searches bring forth links to sites that claim the amero is more or less a 'vanity coin', as in a privately issued coin that may be purchased by collectors, even via the internet. But the Cubans seem to be better informed. Thus, I offer the link. Sorry, it is in Spanish, with footnotes, for us skeptics. The plan is apparently to install or establish this new currency in all 3 countries, on January 1, 2010.

I have seen this date in a couple of internet articles. But I have not seen yet the original document where the 3 governments agree to establish this (proposed) new currency within their territories, on the aforesaid date (January 1, 2010). 

One interesting detail is that the 3 economies mentioned are not fully integrated. If a currency such as the amero is established as legal tender under all 3 flags, then who is going to exercise monetary policy? Have the 3 central banks carefully quantified the macroeconomic effects of such a move, such a change? The other question is, in such case, what will other countries do, who have accepted to make the US dollar (not the amero) their own legal tender currency? For example, we have Panama, Ecuador, El Salvador and Guatemala. Will they be forced to replace their entire stock of currency with a new one? There are others. Has the Federal Reserve Board thought about the fate of the countries which are tied to the USD? The citizens of such countries do not vote in the US. Their central bankers have limited influence in the Fed. They have virtually no influence upon the Bank of Canada or upon the Banco de Mexico.

When the euro was established as the common currency of many European countries, the process was discussed at length by several legislative bodies and monetary authorities. The euro was first phased in as a unit of account, so the European banking and financial systems that were in the process of adopting it, would have time to get used to the intricacies of banking accounting necessary to succeed with this tide of monetary change. For example, all banking accounts had to be converted from the currency they were opened in, into the euro. All assets of business enterprises registered / domiciled or operating under the flags of the European countries involved, had to be given a value in euros. All tax matters had to be reconfigured / recalculated, so the treasuries of all member countries would not lose nor win, but come out exactly the same, under a new currency. These processes took a huge number of man-hours. One year later, I believe, the euro began to circulate legally in the form of banknotes. The entire process was gradual, heavily computerized and heavily monitored by all central banks involved. Europeans even created a European Central Bank, which functions every day and night to this day. The UK tried to join the European Monetary Union, but due to various political issues, was not accepted. To this day, the Pound Sterling is the legal tender currency in the UK, and it is traded separately from the euro. Nothing of a similar nature has taken place (yet) among the central banks of Canada, Mexico and the US. Maybe the amero is only a proposal that has been shelved. Maybe.

http://www.eleconomista.cubaweb.cu/2009/nro347/amero.html