any thoughts on the ammero?

Sensei answered one year ago …

The answer to this is, of course, total speculation but here's my thought. I don't think this is going to happen for two reasons:

First, national chauvinism. Countries like to have their own currency with their own names on it. Europe was different than North America because there were a number of territorially small countries involved and a single currency made travel over a short distance easier. That isn't true here. Still, the Brits still use Pound Sterling as their currency and even though it's tied to the Euro, tiny Croatia uses their own currency - the Kuna.

Second, and more important, is the fact that currency values are tied to a number of factors that relate to the underlying entity. For example ...

Canada does not have a sub-prime mortgage mess. Will Canadians really want to absorb a similar issue in the future (which they'd have to accept with a unified currency)?

If the US adopts universal health care the financial fallout will be extraordinary - even for a country as economically large as the US. Will Canadians be willing to accept that?

If the price of gold, say, goes to $ 1,500 an ounce, that will be a huge monetary benefit for (about) 30 million Canadians but the effect, spread over them and 320 million American will be far less impressive. (Not to mention the impact over the Mexican population that would be added to that.) And the same goes for increases in other commodities, especially oil which would benefit Canada and Mexico - a benefit that would have to be shared with the US under a single currency scenario.

If the US gets itself involved in another "Iraq", at a cost of $ 100 billion a year, will Canadians and Mexicans be prepared to see that cost reflected in the value of their currency (as would happen under the unified currency scenario), regardless of how they felt about that war?

And what of other social and political consideratons that carry economic impact? Will Mexicans be prepared to support the cost of a missile defense system? Will Canadians be prepared to support corn subsidies for Iowa against the US steadfast refusal to import sugar cane whose ethanol conversion is proven far superior? The list goes on.

Will Canadians and Mexicans be prepared to have their broader economic policies dictated by "Washington"? The US may or may not be able to absorb a $ 700 Billion bailout of whoever. Canada and Mexico combined would break under that strain. We have enough trouble in Canada dealing with our own government - which we elect! - without having to deal with the vagaries of a governmental fiscal policy established by politicians who we have no say in and who are not accountable to us but whose decisions would impact us in a very meaningful way.

In short, it's one thing for a number of "small" countries whose economies are of an order of magnitude to unify their currencies. It's quite another for countries like Canada and Mexico to be swept up by the largest economy in the world.