Ever hear of the "Amero"? How about the North American Union?

This is the first time I had heard of a plan to create a North American Union....and to mint a currency to replace the US Dollar, The Canadian Dollar and the Mexican Peso......this new currency would be called....the Amero.

Can this really be true....I;m not sure.....and the graphic of the Amero to the left is BOGUS (I think)...but the video of Vincente Fox below talking about a North American Union isn't faked.......

Looks like people are working to make the America's into the next Union...like the Europien Union and their Euro.

Check out Mexico's Vincente Fox in this video.

Then check out CNBC talking about the Amero.

Low savings rate for 2nd year......should we worry.....should we save?

I read an article in my local paper (here it is in another) that reports that in 2006, the personal savings rate was again negative. It was over twice as negative as it was in 2005......-1% vs -0.4%.

This is also only the second time there have been two years in a row of negative savings....can you believe it! Only the second.....but the worrysome thing is that the first time was back in 1932/1933....that's right, back in the great depression when there was a 25% unemployment rate.

What does all this mean? Should those of us who save worry? Should we stop savings for fear that money will ultimately become worthless, or should we instead make sure we have at least some of our investments in a place where they are at least inflation protected?

I like the latter case because I think that there will eventually be a time when the American Dollar might fall off it's high horse and we will have to have some sort of hedge against that.

Where should we hedge? You've got me....right now a dollar crash would affect everything.....so it would seem there would be very few places to hide....but as the dollar continues to soften, there will be places that become naturally strong.

Some thing the Euro will be it....who knows. Perhaps some other small currency we don't have our eyes on.

I'm going to continue to try and save....but not in my mattress, that's all!

Who funds our debt when the world isn't so dependent on us in the future?

I admit to being an Electrical Engineer and in no way an economist....so my ideas of how the world works may not exactly line up with reality.

I have noticed that I sometimes do not have a good perspective on how "fast" certain things tend to take....basically because the economic systems are so much bigger than I tend to imagine. (there is a huge inertia....sort of a big flywheel effect)

So when I read this article about how this US recession would not really affect the growth and health of the European and Asian economies....it caused me to go back to one of my personal predictions that the giant and growing economies of China and India are sort of "loaning" the USA the money we need to buy their goods. I felt that they NEED us because we are the big consumers, and in order for them to become the big producers, they need consumers.

Given the imbalance of trade, they quickly accumulate wealth from us...and by buying our debt with their savings, they keep us buying more and more. (and also going more and more into debt)

Apparently the US delegation to China this month seems to have come to some agreement on both counties working to lower the imbalance, but this sounds like "saving face" talk to me.

I don't think it is a fluke that China keeps their money valued low and tied to the dollar...this way it makes their goods cheaper to us and we ultimately can NOT resist them! (and in fact are going further into debt with every purchase)

But the above article sort of indicates that our slowdown is not slowing them as much as might be normal....so it seems that they are beginning to become almost "Self-sufficient"....and by that I mean that perhaps their middle class has about built up enough wealth to support the growth of their own production.....so may be they need us less and less as things go on.

Could this be why the Chinese signaled to the world that they were going to start thinking about diversifying a higher percentage of their $1 trillion cash reserve in other currencies besides the dollar?

Now I'm not predicting a crash of total melt-down of the dollar and therefore our economy....that would make their $1 trillion dollar reserve evaporate....that's not what the Chinese want either....but perhaps this might be the start of a slow "backing away" from the dollar by the world who now looks at the dollar as being better than gold.

I worry that our country needs to fix things NOW....while we still have the ability to do something. Our debt to the world is already of record size....but our country and currency still has very good standing in the world, and we need to get our house in order before we lose that too.

Currency Information Site

Here is an interesting website for those of you who have an interest in either tracking or knowing more about foreign currency exchange rates.

This site has many simple conversion tools as well as a lot of information to help you learn more about currency exchange and the world of money. I have looked around this site quite a bit tonight, and I feel I have barely scratched he surface.

Check it out.