What is the Amero?
The Amero is a currency that represents the United States, Mexico, and Canada. It is the result of an economic union between the three countries called The North American Union. This concept was modeled after the Euro and the European Union.
Where did the Amero idea come from?
The Amero idea was suggested by a professor of economics at the Fraser Institute named Herbert Grubel. Grubel's theory was that a combined currency of the three nations would increase trade through reduced complication for transactions. The reduced complication would be, no worry about currency exchange rates between the three countries, and no currency risk for exporters doing business in North America. The Amero would reduce borrowing cost for borrowers in all three countries. The Amero would also stop North American wage arbitrage, which is when a company in one country hires labor in another country taking full advantage of the exchange rate to create cheap labor.
The Drawbacks of the Amero System
The biggest drawback of changing over to the Amero would be that it would restrict the United States on monetary policy. Interest Rates and "money printing" would now be under the control of three countries rather than one. The United States would no longer stand alone in its trade negotiations with other countries of the world. The United States would be subject to the rules of the neighboring two countries which could reduce it's economic power.
Is the Amero real?
The idea of the Amero is absolutely real. However, the rumors of the Amero taking over for the US Dollar, the Loonie, and the Peso are premature.
Rumors were circulated by a radical radio talk show host named Hal Turner in a blog post written in 2007 where he claimed that Ameros were already being minted. There was even a picture of an Amero coin included in the post. The picture was a sample picture from a designer of collectible spoof coins named Daniel Carr.
The bottom line is that the Amero is a real idea, but there is no evidence to prove that there will be a North American Union with a new currency called the Amero. The Amero, is just an idea that has been kicked around and talked about with no real plans for implementation.