Did Parity Kill The Monetary Union Star?

I received an email from currencytrading.net about their latest article on the AMERO, entitled The Amero: An Introduction, A Short History, and What it Would Mean for Our Economy

(LINK).

It happens just as Eric Helleiner (a specialist on geography and currencies) writes a piece in today’s Globe and Mail asking if parity actually works against potential monetary union (LINK)

Helleiner’s logic goes like this:

1. Monetary union keeps the Canadian economy flexible - we can more readily adapt to external global shocks when our monetary policy does not have to follow the Fed’s lock-stock and two smoking barrels.

2. Supposing we were in a monetary union, one way around this would be to enhance the free flow of labour across borders - September 11 changed that, and we are all stuck waiting three months for a passport.

3. Quebec sovereigntists have seen their cause fade somewhat, and thus there is less support for the idea of a new currency.

4. Since reaching parity, the Canadian dollar has inspired pride in this country, and, being a last remaining symbol, we are more reluctant to let go of it.

Hate to burst your bubble, Canada, but our dollar isn’t so much gaining ground against the greenback (due to ’strong demand’ for commodities), rather, the greenback is in freefall against gold, oil - not to mention other major currencies. Globally, central banks are dropping their dollar reserves in favor of other currencies. There are largely two commodities one can buy with these bucks, and they are US debt (which funds the war), and oil, which is priced in US dollars. With more and more dollars chasing a relatively stable amount of oil and gold, it’s no wonder the price of these commodities *when priced in US dollars*, goes up. Read more about this HERE.

So it’s a mix, really. Yes, there is strong demand for uranium and oil. However, that’s not the sole cause of the loonie’s rise. A portion of that increase comes from the US dollar falling into oblivion.

Also, this SPP stuff and the idea of a North American economic union will loosen bottlenecks at the border. We will one day move from deepened economic integration witht he US to a common market, which will follow the stages of economic integration, as theorised by Bela Belassa.