Money Wise

Amero Nothing but a Gag Coin



Amero's nothing but a gag coin

12:00 AM CDT on Tuesday, September 11, 2007

By JIM LANDERS / The Dallas Morning News

WASHINGTON – There's a phony story going around about a mythical currency that's supposed to replace the dollar called the "amero."

New Jersey blogger Hal Turner says a friend in the U.S. Treasury smuggled him a 20-amero coin made at the U.S. Mint in Denver – evidence, he writes, of a conspiracy to unite the United States, Canada and Mexico in a North American Union.

Well, you can get as many of these 20-amero coins as you want for $9 apiece – which would be a steal if it were a real currency. Just check with Daniel Carr at Mr. Carr makes the coin touted by Mr. Turner, along with other gag coins, such as his phony Texas quarter bearing the motto "Alaska could swallow us whole."

The idea of a common currency for Mexico, Canada and the United States has floated around in think-tank circles since the North American Free Trade Agreement came into effect in 1994.

Canadian economist Herbert Grubel came up with the mythical currency's name in a 1999 paper, "The Case for the Amero: The Economics and Politics of a North American Monetary Union."

Uproar heard

It seemed like a good idea at the time, but Mr. Grubel says he's abandoned it in the face of the resulting political uproar over erosion of sovereignty.

"The euro had just been created. I said we could do that in North America, and in parallel with the euro, let's call it the amero," he said from his home in Vancouver. "The rest was economic gobbledygook about values."

Mr. Grubel, now a senior fellow at Canada's Fraser Institute, was a member of Parliament from 1993 to 1997 and economics spokesman for his conservative Reform Party. He said he stays in touch with national political and financial leaders, who have fleshed out the tale of how his idea has become an Internet conspiracy theory.

Former Mexican President Vicente Fox toyed with the idea of a common North American currency when he took office in 2000, Mr. Grubel says, but found it political anathema among Mexicans.

"In the United States, at the Federal Reserve, I'm told this is not on the horizon at all. It just has never entered their mind as far as something the Fed would be involved in," Mr. Grubel said.

Canada's take

Canada's central bankers have said a common currency would help balance the highs and lows of Canada's economy, which relies heavily on trade with the United States. It's on the minds of many Canadian businesses right now because the sharp rise in the value of the Canadian dollar against the U.S. currency has hurt sales to the United States.

But, "obviously, it's politically totally out of the question," Mr. Grubel said. "Nationalists would go on the barricades and shoot anybody who suggested it."

Of the three North American nations, Canada has the biggest reason to consider a common currency. Two years ago, the Canadian dollar – known as the "loonie" because of the loon on the one-dollar coin – was worth 60 U.S. cents. Now it's worth 93 cents.

That works out to a price hike for Canadian exports to the United States of more than 50 percent – and a 50-plus percent discount for U.S. exports to Canada. Two-way trade between Canada and the United States is more than $533 billion a year. With the price spike for Canadian goods, U.S. buyers are shying away and American vendors are grabbing market share from Canadian companies.

Canadians are still on pace for a $70 billion surplus with the United States this year, but the surplus is falling and some Canadian firms are hurting.

"There's tremendous pressure on the bottom line," Mr. Grubel said. "Many, many businesses in Canada are going bankrupt."

If both nations had the same currency, Canadian companies wouldn't be hurting so much. Such fluctuations are a big reason so many countries in Europe decided to unite their currencies into the euro.

Sovereignty rules

But the power to print money has a big impact on interest rates, inflation, growth and sovereignty that no North American government is ready to surrender.

Mr. Carr said he decided to make amero coins to be provocative and get people thinking about the issue.

He said he was not asked by the U.S. Mint to design the coin (and Mint spokesman Greg Hernandez agrees).

The fantasy coin maker said he's sent three e-mails to Hal Turner trying to get the coins off Mr. Turner's Internet site but has gotten no reply.

Meanwhile, Mr. Turner stands by his story and says he has now heard from an anonymous ATM maker that the government is starting to provide specifications for amero paper bills.

What will this guy sell next? Mexican shares in the Brooklyn Bridge?