North American Union, Part 3: The Amero

Given the recent developments in our economic situation in the United States, and the resulting increasing interest in this particular post, I felt that it might be appropriate for me to move it to the “top of the heap,” so to speak, with some minor additions. It contains some very relevant information to our current situation.

In the North American Union, parts 1 and 2, we briefly examined the systematic path toward socio-economic convergence of the U.S., Canada, and Mexico through various treaties, trilateral organizations and projects, much like the beginnings of the European Union. The “Open Borders” posts and the “Social Security Totalization Treaty” post also have very distinct relationships to this issue. What should be noticeable throughout, particularly in the “Totalization” and “EU” postings, is that convergence is very dependent upon a state of parity between the three nations…and financial parity is a key element.

One of the mistakes that the European Unionists made originally was not positioning themselves to impose a single monetary system throughout the EU. Not all EU nations have adopted the Euro as their sole currency which means, of course, that they have not yet fully invested themselves in the centralized banking and financial functions of the Union. Great Britain happens to be one of those countries. That is one of the matters that the Treaty of Lisbon is designed to correct. It is very likely that the architects of a possible North American Union have learned from their mistakes.

As we witnessed in the aftermath of “9/11,” an atmosphere of fear is a necessary element in the willingness of the American people to concede their liberty in the name of security for such anomalous concessions to government intrusion into our lives, and the abrogation of many of our individual rights, as was imposed upon us through the Patriot Act and the creation of Homeland Security. Fear is an equally necessary element to create an atmosphere whereby the American people would permit our government to thoroughly abdicate the very economic principles which made this country such an economic power in the previous century.

From the interview in the U.S. News & World Report online, “Permabear Peter Schiff’s Worst-Case Scenario”:

http://www.usnews.com/articles/business/your-money/2008/05/30/permabear-peter-schiffs-worst-case-scenario.html

By Kirk Shinkle

Posted May 30, 2008

“There’s nothing good to say about our situation. The policies both the Fed and government are pursuing are making the situation worse. We’ve been getting a free ride on the global gravy train. Other countries are starting to reclaim their resources and goods, so as Americans are priced out of various markets, the rest of the world is going to enjoy the consumption of goods Americans had previously purchased. This is a natural consequence of this phony economy. If America had maintained a viable economy and continued to produce goods instead of merely consuming them, and if we had saved money instead of borrowing, our standard of living could rise with everybody else’s. Instead, we gutted our manufacturing, let our infrastructure decay, and encouraged our citizens to borrow with reckless abandon.”

To understand how we could have gotten to this point, it is necessary to understand the difference between hard currency and fiat monetary systems, as well as how they relate to banking…not simple subject matter. I’ll try to abbreviate and summarize it as best I can.

“Currency” has taken many forms throughout history, going from barter exchange (direct) through variations of indirect exchange (money). “Money” is represented by whatever happens to be defined as the most generally accepted medium for exchange, whether it be furs or precious metals…or paper. Historically, the United States, and other countries of the world, have based their currencies on the gold standard, with periods where that “hard currency standard” may have been suspended during times of extreme financial crisis (i.e. war) to allow a greater flexibility in the generation of debt. A side effect of this is, of course, an uncertain value to the currency that is highly dependent upon confidence that the debtor will, in fact, be able to return value for that debt. This is a fiat monetary system, which has formed the basis of our own currency since 1971.

“Banking” was a concept that developed out of the need to move beyond direct exchange of goods (barter) to a more flexible monetary exchange as society became more specialized and trade expanded. It being impractical, and dangerous, to carry sufficient quantities of, say for instance, gold to adequately conduct business, one would store that gold with a “banker” (moneychanger) who would then provide a receipt (money) of that value which could be exchanged for goods and/or services. This service was provided for a fee, but eventually “bankers” determined that it was also possible for them to print additional receipts for that same gold and offer loans to others for an additional fee, thereby increasing their profits. This became known as fractional reserve banking (the basis of the Federal Reserve system), which works just fine until too many of the depositors require the return of their gold.

For a more detailed history of this, the U.S. monetary system and the Federal Reserve, I recommend viewing this video at the following link:

http://video.google.com/videoplay?docid=-466210540567002553

As you can see, a nation’s monetary system can easily become a house of cards if it is not based on hard currency, and even then fractional reserve banking policies can leave the economy vulnerable. A fiat monetary system must be delicately balanced and is far too vulnerable to manipulation…and the incompetence or malfeasance of its managers. What we are witnessing right now is the collapse of that house of cards.

[NOTE: The video which had previously been in the above spot was no longer available so I replaced it with this one, given the increasing interest in this post, which is more current (May 16, 2008). The one added below addresses past and current policies which have exacerbated the general economic situation which has led to what we are experiencing now.]

With the dollar having been pushed into free fall, along with the accompanying plunge of the American economy, parity with Canada and Mexico is on the horizon…something which would have been unimaginable a mere decade ago. NAFTA, CAFTA (U.S.-Central American Free Trade Agreement), outsourcing, off-shore partnerships are all helping to create wealth and jobs in other nations with relatively little return, as our own economy spirals downward and our deficit spirals upward. Millions of illegal aliens are pushing down the wage levels and flooding the job market at a time when inflation is increasing, and destined to increase further, to historic levels, and the domestic job markets are shrinking. How soon will it be before it is announced that our government has the solution, thanks to the years of negotiations among the Chief Executives of the United States, Canada, and Mexico through the Security and Prosperity Partnership, along with the North American Competitiveness Council (comprised of representatives of the very corporations who have benefited most from the previously mentioned problems we are facing)…the North American Union along with a new, centralized monetary system and currency, the Amero?

Vicente Fox admits that he and George W. Bush have ’agreed’ on common currency, North American Union

WEBWIRE – Wednesday, October 10, 2007

As reported in WorldNetDaily, Larry King, near the end of the broadcast, asked Fox a question e-mailed from a listener: “I would like to know how you feel about the possibility of having a Latin America united with one currency”

Fox answered in the affirmative, admitting he and George W. Bush had “agreed” to pursue the Free Trade Agreement of the Americas – a free-trade zone extending throughout the Western Hemisphere – and that part of the plan was to institute a regional currency from Canada to the tip of South America!

“Long term, very long term” he said. “What we proposed together, President Bush and myself, it’s ALCA, which is a trade union for all the Americas”