Half a croissant, on a plate, with a sign in front of it saying '50c'
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NAFTA single currency zone

NAFTA single currency zone
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(+1, -4)
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So, the US, Canada and Mexico draw up a plan. They all pledge to underwrite the new currency with either gold, or other currencies. Please note that says "pledge".

The whole shebang is then run from some other country, for example, Switzerland.

NAFTA then announces the switch over to the new currency and all the old bank notes will be worthless by a certain date.

So, the entire population of the NAFTA area is then dependant on their own governments actually coming up with the underwriting money, even if the new currency goes belly up, when it's still sitting in their own central banks. The bank doing all the work is not even in the NAFTA zone, so if it goes completely wrong, it's not exactly a big problem to them.

Sounds like a great idea to me..what about you?

the Gold Standard. http://en.wikipedia.../wiki/Gold_standard
[DrBob, Dec 08 2009]


       Why would the US give up the scam it's been running on the entire world? We print dollars backed by nothing and other countries trade merchandise for them and bank them for their reserve, so we never have to redeem what we've printed. It's a license to steal (or at least not to work).
ldischler, Dec 06 2009

       Isn't NAFTA already effectively a US Dollar zone, given the comparative size of the underlying economies?
theircompetitor, Dec 06 2009

       Hi ldischler, yep, but it's pretty much the same for the other currencies. Working this one out on the back of a computer, that £5 pound note I had this morning, should by rights be exchangeable for five pounds of gold at the Bank of England. Even more scratching of the head (Troy pounds..) gives a rough value that means I'd get £42,360 worth of gold. Slight element of inflation seems to crept in there over the years.   

       theircompetitor - yes and no. People who make stuff have to pay their workers in the local salary, so there's still an element of exposure to exchange rate differences.   

       As an aside I was spent quite a lot of time in the area of the Bank of England, and I couldn't see the ATM. I'm English and they are the Bank of England, so why haven't they got an ATM?   

       //yep, but it's pretty much the same for the other currencies.//   

       It's not anything like the benefit you get from printing the world's premier reserve currency.
ldischler, Dec 06 2009

       Hi [RPSV], it's silver not gold (hence 'sterling'). A gold sovereign is the old £1 coin, with 7.315g or 0.2354 troy oz of gold. Currently worth about £170. So less inflation than you suggest but still pretty impressive demonstrating the debasement of fiat currency.
pocmloc, Dec 06 2009

       My shame, I should have known that..   

       On the other hand I do seem to remember that for promo work, when the BOE first started, they would bring in boxes of gold and stuff in through the front door, so people would think it was getting popular, then take the boxes out the back door and...so maybe banking hasn't changed that much..   

       How old are you?
pocmloc, Dec 06 2009

       Chronologically or mentally? I did once get told off for being too childish, by some five year olds..   

       Having re-read your comment, no, I am not the Comte de Aglie (out of Foucaults Pendulum), I remember reading the story of the BOE, not remember the actual event in person.   

       But if I was the Comte de Aglie, I would of course deny it..   

       But by pretending to acknowledge the denial you draw suspicion on yourself, surely?
pocmloc, Dec 06 2009

       "But by pretending to acknowledge the denial you draw suspicion on yourself, surely?"   

       But only the Comte de Aglie would acknowledge the denial, as cunning double-bluff..   

       Anyway, I was wondering how sensible an idea this sounded, cos it is exactly how the Euro was set up...nobody actually shifted any money from their central banks and whole thing was co-ordinated by a bank in Switzerland, which is not in the EU...   

       //cunning double-bluff// I was already factoring that in, do you think I am stupid? I know your secrets.
pocmloc, Dec 07 2009

       egads!!! Rumbled....   

       I'm not so certain I want to be underwriting Mexico with the same currency right now. Such a scheme did a number with Germany when they integrated the Easterly bit for a good while.   

       And I'm not so certain Canada would want to underwrite us, the way things are going...
RayfordSteele, Dec 08 2009

       [random] Very few people have Bank of England bank accounts - they used to give them to senior employees, but I don't think they even do that now. My gran has a Bank of England account - the ATM card is usable in other banks' ATMs but best of all are the cheques, which are just beautiful.
hippo, Dec 08 2009

       "Very few people have Bank of England bank accounts" erm, as I am English, isn't that my money? If it's not money for the English people, then who is it for?   

       I'd like to see one of the cheques..   

       PS last I heard, if you have $70,000 just floating about that's enough to start your own bank in Russian jurisdiction...   

       // If it's not money for the English people, then who is it for?// Rich, powerful people. Next.
pocmloc, Dec 08 2009

       The Bank of England offers bank accounts of last resort to people so plagued by terrorists/activists (usually of the Animal Rights Extremist variety) that no other bank is brave enough to accept them as a customer.   

       The Bank of England generally deals with other banks and government rather than the unwashed masses seeking somewhere to store their grubby coins ...
Aristotle, Dec 08 2009

       This idea sound surprising like situation behind the Exchange Rate Mechanism Crisis that rather embarrassed the Conservative government in the UK.   

       The Euro is a good example of how to do it properly where each country in the "Euro-Zone" settled on a single currency, a common central bank and replaced individual currencies. Note that Euro-sceptics will dispute this but that is their passion, after all.   

       Note that a fair few countries have actually adopted the dollar as their currency, even though they are unable to print more themselves. I have no idea how they are doing during the Credit Crunch.
Aristotle, Dec 08 2009

       I'm not a euro-sceptic, but I was totally amazed at the way it was done...   

       Would you want to sit in on a poker game where no one was confident enough to bring any money with them?   

       "no other bank is brave enough to accept them" so that would be RBS....ok cheap joke   


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