North American currency union

From Wikipedia, the free encyclopedia

The North American Currency Union is a theorized economic and monetary union of the three principal countries of North America, namely Canada, the United States, and Mexico.^[1] Implementation would probably involve the three countries giving up their current currency units (Canadian dollar, U.S. dollar, and Mexican peso) and adopting a new one, created specifically for this purpose. The hypothetical currency for the union is most often referred to as the amero.^[2][1] The concept is modeled on the common European Union currency (the euro), and it is argued to be a natural extension of the North American Free Trade Agreement (NAFTA) and the Security and Prosperity Partnership of North America (SPP). Conspiracy theorists contend that the governments of the United States, Canada, and Mexico are already taking steps to implement such a currency, as part of a “North American Union (NAU)”^[1] No current members of any country’s government have officially stated a desire to create such a body, nor introduce a common currency.^[3][4]

Contents [hide] 1 Basis and origin 2 Support 2.1 Canada 2.2 Mexico 2.3 Support in other regions 3 Criticisms and problems 3.1 Trade-offs 3.2 Differing economic policies and situations 3.3 Political mandate 4 Rumors of “Amero coins” 5 See also 6 References 7 External links

[edit] Basis and origin

The idea for a North American currency union was first proposed in 1999 by Canadian economist Herbert G. Grubel.^[1] A senior fellow of the conservative Fraser Institute think-tank, he published a book titled The Case for the Amero in September 1999,^[2] the year that the euro became a virtual currency. Another Canadian think-tank, the C.D. Howe Institute, advocates the creation of a shared currency between Canada and the United States.^[6]

After the report came out, center-left nationalist groups in Canada expressed their opposition to any currency union because they view it as an attempt by American businesses to gain access to Canada’s extensive natural resources while dismantling the nation’s social services.^[1] The 100,000 member strong Council of Canadians, a progressive advocacy group, has declared one of its central issues to be the threat of “deep integration”.^[1]

Dr. Robert Pastor, in a 2001 book^[7], suggested a common currency should be a foundation of “macro economic cooperation” among the three NAFTA countries. However, the 2005 Independent Task Force on North America, which he chaired, did not recommend a common currency, nor does Pastor in the section for additional and dissenting views suggest a common currency should be a goal.[1]

[edit] Support

[edit] Canada

One argument is that it would save up to $3 billion in currency transactions.^[8] The same authors also stated that Canada’s GDP could rise by up to 33 percent in a 20-year period given the adoption of a single currency.

The idea of a common currency has historically been unpopular in English speaking Canada, in comparison to the province of Quebec where it has received more support. A 2001 opinion poll found that in Quebec over 50 percent of respondents favored the idea of a shared currency, while in the rest of Canada a majority of respondents opposed the idea. ^[9]

[edit] Mexico

The possibility of a monetary merger has also been discussed in Mexico as a natural step to take after NAFTA.^[10] Former Mexican president Vicente Fox echoed that view and expressed his hope for a greater integration of Canada, Mexico and the United States, including an eventual monetary union, while on a 2007 promotional tour for his book “Revolution of Hope.”^[11][12]

[edit] Support in other regions

Lower levels of currency cooperation have been practiced in the Americas before. Some nations such as Argentina, Brazil and Canada have at times tied their currency to the U.S. dollar. Some of them, such as Aruba, Bahamas, Barbados and The Netherlands Antilles (guilder) still do.

The U.S. dollar is officially accepted alongside local currencies in El Salvador (since 2001), Nicaragua, Peru, Honduras, and Panama, although in practice two of these countries (El Salvador and Panama) are fully dollarized. In 2000, Ecuador officially adopted the U.S. dollar as its sole currency.

Unofficially, the U.S. dollar is treated as a de facto secondary currency in much of Central America and the Caribbean.

Currency integration is also one of the many long-term aims of Unasur (Union of South American Nations), a supranational organization comprising all the sovereign nations of South America, modeled after the European Union.

[edit] Criticisms and problems

Opposition to a North American currency union exists high up in the governments on both sides of the Canada–United States border. Herbert Grubel, the first proponent of the amero, admits that American officials show no interest in the topic.^[1] He concedes that “there wouldn’t be very much benefit for the United States” in an amero.^[1] Likewise, the Canadian Department of Finance strongly opposes the creation of a common currency with the United States, citing the loss of economic sovereignty. In briefing documents to Minister of Finance Jim Flaherty, finance officials concluded:

“A North American common currency would undoubtedly mean for Canada the adoption of the U.S. dollar and U.S. monetary policy. Canada would have to give up its control of domestic inflation and interest rates.”^[13]

[edit] Trade-offs

From the point of view of the Canadian and Mexican governments, a major obstacle to the creation of a unified currency is the sheer dominance of the United States in any such union. Unlike any country in the EU, the USA has a larger economy than the rest of its respective continent/union combined.^{[citation needed]}

A University of California, Santa Barbara paper puts forward the idea that the United States simply has too many advantages from the status quo to move toward a single currency.^[14] The United States dollar already acts as a global currency, meaning any transition to a ‘new’ currency would risk compromising this position and could cause a shift toward the euro or yen. The U.S. dollar is currently being used in over half of all the world’s exports, double the total United States foreign trade. The adoption of the amero could threaten the seigniorage that the U.S. currently gains from its dollar. While seignorage would still be gained from the amero, this would be shared among the Bank of Canada, the Federal Reserve, and the Banco de México. Therefore, even if the amero were used just as much as the U.S. dollar, the advantages would be shared among two or more countries, and not exclusively earned by the United States.

[edit] Differing economic policies and situations

Several problems could arise in regards to macroeconomic management. By submitting to a common currency, the countries would lose considerable autonomy in the management of the currency itself, including the setting of interest rates. Amongst the three potential participants, there is considerable difference in policy which would have to be reconciled.

Debt is a factor affecting currency prices. As of 2008, the debt of the United States continues to increase, while the debt of the Canadian federal government is being reduced. ^[15] This is a clear advantage for Canadians and it would not be reflected if the currencies were to merge. The importance of commodities also factors into this equation.

A concern with any unified North American currency is the differing economic situations between each country. The Eurozone is broadly similar being service-based economies^[16] based on high public spending (compared to the United States), high taxes and wealth being created by the sale of goods and services. North America on the other hand has three distinct economies; one based mainly on agriculture and manufacturing, with a demand for free trade (Mexico), another based on services such as retail, with low taxes and low public spending (United States), and a third based on services with higher taxes and higher public spending, with a large sector in primary goods such as oil, mining and lumber (Canada).^{[citation needed]}

[edit] Political mandate

Lou Dobbs, a reporter and commentator for CNN, has suggested a “North American Union” is being implemented, without the knowledge and consent of the majority of the people who would be affected by this.^[17] This Union, he and others claim, would include a common currency.

In 2006, Conservative Caucus Chairman Howard Phillips, WND columnist and author Jerome Corsi, activist Phyllis Schlafly, among others, reportedly formed a coalition against a North American Union.^[18] On January 22, 2007, Republican Representatives Virgil Goode of Virginia, Tom Tancredo of Colorado, Walter Jones of North Carolina, and Ron Paul of Texas were among the 43 federal lawmakers who introduced H. CON. RES. 40, a resolution advocated by the coalition, that expressed:

“The sense of Congress that the United States should not engage in the construction of a North American Free Trade Agreement (NAFTA) Superhighway System or enter into a North American Union (NAU) with Mexico or Canada.”

[edit] Rumors of “Amero coins”

In August 2007, rumors and conspiracy theories began circulating across the Internet regarding alleged United States Treasury-issued “amero” coins.

The inspiration behind these rumors may have been the posting of images of medallions created by coin designer Daniel Carr.^[1] Carr, who designed the New York and Rhode Island 2001 statehood quarters, sells medals and tokens of his own design on his commercial website, “Designs Computed” (also known as “DC Coin”).^[1] Among his designs are a series of gold, silver and copper fantasy issues of “amero coins” ranging in denomination from one to one thousand.^[1] The coins have the legend “Union of North America” on the back with his company’s logo, a stylized “DC”,^[19] in small type.^[20] Concerning his “amero” designs, he mentions on his website:

My goal with these coins is not to endorse a Union of North America or a common “Amero” currency. I fully support the United States Constitution, and I would not welcome (in any form) a diminishment of its provisions. I expect that these coins will help make more people aware of the issue and the possible ramifications. I leave it up to others to decide if they are in favor of, or against a North American Union. And I encourage citizens to voice their approval or disapproval of government plans that impact them.^[21]

Unauthorized postings of images taken from his website have been reposted widely across the Internet, often being used as supposed “proof” of the amero coinage. Notably, white supremacist and former Internet radio talk show host Hal Turner ran a full article on his website about the “amero coin”, claiming to have arranged for a United States Government minted “amero” to be smuggled out of the Treasury Department by an employee of that organization.^[22]

Following Turner’s assertions of federal minting of ameros, a web site marketing the curio coins released a statement debunking Turner’s claims of a government cover up regarding Daniel Carr’s amero products.^[23] The urban legend investigating Web site Snopes also ran a further counter to Turner’s claims, stating “neither the U.S. Mint nor the U.S. Treasury has a hand in creating these ‘Ameros’. These coins are merely collectibles offered to the buying public by a private company in the business of manufacturing such curiosities.”^[24] Hal Turner claimed that Carr’s website had been created in haste in a matter of days expressly to discredit his claim about the coinage. ^[25] However, Carr’s designs have been available through his website since 2005,^[26] and according to a WHOIS search at Network Solutions, the domain “dc-coin.com” was registered by Daniel Carr on 27 September 2005.^[27] In October 2008, Hal Turner released a video showing an apparent 20 Amero coin, with claims that shipments of the currency had been sent to China. ^[28] Yet the coin in Hal Turner’s video is identical to a medallion on Daniel Carr’s “dc-coin” website, listed as “UNA 2007 20 Ameros, Copper, Satin Finish”. ^[29]

[edit] See also

• Monetary union
• List of trade blocs
• North American Union
• Security and Prosperity Partnership of North America
• United States dollar
• Canadian dollar
• Mexican peso
• East Caribbean dollar
• European Currency Unit
• Euro
• Khaleeji
• Afro
• Eco
• World Currency Unit

[edit] References

[edit] External links

• Mexican President Vicente Fox Interview on CNN - Transcripts
• Security and Prosperity Partnership of North America
• Fraser Institute - The Case for the Amero
• Alternative Amero Currency Article
• AMERO: What it Means for the U.S.
• Canadians Completely Unaware of Looming North American Union
• “Conspiracy Watch: The Amero”,
• Pastor, Dr. Robert A., Testimony invited by the Subcommittee on the Western Hemisphere of the United States Senate Foreign Relations Committee {PDF) 9 June 2005
• Steve Previs on CNBC
• Amero

[hide] v • d • e Trilateral relations of Canada, Mexico, and United States   Enacted Treaties North American Agreement on Environmental Cooperation · North American Free Trade Agreement   Projects and working groups Independent Task Force on North America · Security and Prosperity Partnership of North America   Theorized projects North American currency union · Trans-Texas Corridor (NAFTA superhighway) · North American Union   Canada-Mexico relations · Canada-United States relations · Mexico–United States relations

Many have now heard rumblings of the “amero”, a proposed North American currency to replace the Canadian loonie, dollar and peso. However, most of the mentions of this concept, when discussed in the mainstream media tend to focus on suggesting that talk of an “amero”, and in effect, the accompanying North American Union, is nothing but a conspiracy theory created by deluded xenophobes afraid of immigration and globalization. The Boston Globe recently wrote such a story, titled, “The Amero Conspiracy”, which stated, “The SPP [Security and Prosperity Partnership] does exist, and its tri-national task forces continue to meet, but its members consider it a way for the United States, Canada, and Mexico to collaborate on issues such as customs, environmental and safety regulations, narcotics smuggling, and terrorism. The amero, on the other hand, appears to be purely theoretical.”¹

However, despite being conveyed as “purely theoretical”, a recent article in the national Canadian newspaper, the Financial Post, referred to the amero, not as a theoretical idea or conspiracy theory, but as a potential reality. The article entitled, Fix the Loonie, lays out the process to be undertaken before the adoption of a continental currency known as the Amero.

The article was written as a response to a previous article written in defense of Canada’s flexible exchange rate system, to which it states, “David Laidler’s recent defence of Canada’s flexible exchange rate system misses completely the point made by Nobel Prize winning economist Robert Mundell in his famous article on optimum currency areas. Mundell’s article has been widely credited with providing the intellectual base for the European Monetary Union and merits attention.”² The article continued elaborating on the previous point made by Mundell, stating, “If flexible exchange rates are best for Canada on the grounds presented by Laidler, why would flexible rates not be best also for Alberta, Ontario or New Brunswick?” It continued, “Milton Friedman’s response to Mundell was that he would not advocate flexible rates for every possible region.”

The article contends that Canada is currently suffering from what the author refers to as the ‘Dutch Disease’, “which is named after the problems that developed in the 1960s when the Netherlands sold natural gas that had been discovered on its coast. The increases in Dutch exports of resources, like those of Canada in recent years, resulted in a strong appreciation of exchange rates, which was reinforced by interest rate policies of central banks and currency speculators.” It further states that, “The disease manifests itself through the loss of domestic manufacturers’ ability to compete abroad and with imports.” The author then contends that, “The disease manifests itself through the loss of domestic manufacturers’ ability to compete abroad and with imports,” and that, “The Bank of Canada can keep interest rates low to discourage capital inflows and thus exchange rate increases, but at the cost of fuelling inflationary pressures.”

The author then states that there is only one true cure for Canada’s ‘Dutch Disease’, “inoculation of the system by fixing the exchange rate at a level that allows manufacturers to be competitive, perhaps at the rate the Bank of Canada research identifies as the long-run equilibrium, around US90¢.” The author goes on to explain the reasoning behind this by giving the example that, “The Netherlands and Austria in the years before the introduction of the euro successfully operated such a system and enjoyed near perfectly stable exchange rates against the German currency. The essential ingredient in this success was the official commitment of the central banks of these two countries to maintain the same interest rate as that of the German central bank.”

So if Canada were to do the same in relation to the US dollar, then Canadian interest rates would be subject to the rates set by the US Federal Reserve, with our Bank of Canada lock in step. The author goes on to say, “An analogous commitment by the Bank of Canada with respect to U.S. interest rates may not be credible, tested by speculators and therefore ultimately doomed to failure.” Then the article continues, and makes a startling announcement:

“However, there is a solution to this lack of credibility. In Europe, it came through the creation of the euro and formal end of the ability of national central banks to set interest rates. The analogous creation of the amero is not possible without the unlikely co-operation of the United States.

This leaves the credibility issue to be solved by the unilateral adoption of a currency board, which would ensure that international payments imbalances automatically lead to changes in Canada’s money supply and interest rates until the imbalances are ended, all without any actions by the Bank of Canada or influence by politicians.

It would be desirable to create simultaneously the currency board and a New Canadian Dollar valued at par with the U.S. dollar. With longer-run competitiveness assured at US90¢ to the U.S. dollar. [Emphasis added].”

In summation, what the author is proposing is to fix the Canadian loonie to the US dollar at US$0.90, create a currency board, which would be an unelected, unaccountable, group of people to handle our monetary policy, creating a route around using the publicly owned Bank of Canada, to ensure the creation of a ‘New Canadian Dollar’, which would be a prelude to the Amero. The author then explains that, “Fluctuations in global demand for natural resources will always result in competition for labour and capital among Canadian manufacturers and producers of resources. But, at least, the firms in these sectors would no longer have to concern themselves with exchange-rate fluctuations and policies of the Bank of Canada.” The article finishes by stating, “There will also always be changes in the U.S. (and Canadian) dollar exchange rate against the euro and other major currencies. But these changes would have minor effects on the Canadian economy because 80% of the country’s trade is with the United States.”

The author of this article is Herbert Grubel, a professor of economics emeritus at Simon Fraser University, who also happens to be a Senior Fellow at the Fraser Institute, one of Canada’s largest and most prominent pro-big business think tanks.³ Other senior fellows at the Fraser Institute include Eugene Beaulieu, who sits on the Academic Advisory Council to the Deputy Minister of International Trade in the Department of Foreign Affairs and International Trade for the Government of Canada, Martin Collacott, former Canadian Ambassador, Tom Flanagan, ho is known as the “man behind Stephen Harper”, and is a member of what is known as the ‘Calgary School’, which is an unofficial group of like minded thinkers who espouse neo-conservative views, and hold significant influence in the current Conservative government, even referring to Flanagan as the “Godfather of Canada’s conservative movement.”⁴

Flanagan also used to work for Preston Manning, who is also a senior fellow at the Fraser Institute, a former Member of Parliament, and former leader of the opposition, and other senior fellows include Gordon Gibson, a former Assistant to the Minister of Northern Affairs and later Special Assistant to the Prime Minister, Wilf Gobert, former Director and Vice Chairman of Peters & Co. Limited, “an independent, fully integrated investment firm which has specialized for 35 years in investments in the Canadian oil, natural gas, and oilfield services industries,” Michael Harris, former Conservative Premier of Ontario, Jerry Jordan, former President and CEO of the Federal Reserve Bank of Cleveland, Ralph Klein, former Premier of Alberta, Rainer Knopff, a professor and also a member of the ‘Calgary School’, and Brian Tobin, a former Industry Minister.⁵

The author of the Financial Post article which mentioned the amero, Herbert Grubel, wrote a paper for the Fraser Institute in 1999, entitled, “The Case for the Amero: The Economic and Politics of a North American Monetary Union”, in which he laid out the case for the creation of a regional currency for North America.⁶ In this paper, Grubel wrote that, “The plan for a North American Monetary Union presented in this study is designed to include Canada, the United States, and Mexcio,” and that, “The North American Central Bank, like the European Central Bank, will have a constitution making it responsible only for the maintenance of price stability and not for full employment.”⁷

In discussing the issue of sovereignty related to a monetary union, Grubel stated that he thinks that, “sovereignty is not infinitely valuable. The merit of giving up some aspects of sovereignty should be determined by the gains brought by such a sacrifice.”⁸ He continued in saying, “It is important to note that in practice Canada has given up its economic sovereignty in many areas, the most important of which involve the World Trade Organization (formerly the GATT), the North American Free Trade Agreement,” as well as the International Monetary Fund and World Bank.⁹ Despite admitting to several agreements and organizations of which strip Canadian sovereignty, Grubel suggests that losing sovereignty in these areas is still worth the benefits.

The introduction of the Amero is an integral aspect of the process of creating a North American Union, much like the European Union. This process is being undertaken through the implementation of the Security and Prosperity Partnership of North America (SPP), which was signed by the leaders of the three North American governments in March of 2005. This agreement is orchestrating the bureaucratic “harmonization” among the three North American nations to pave the way for a North American Community, akin to the previous European Community, and ultimately, a North American Union.

The push for this agenda is being driven by the US-based Council on Foreign Relations (CFR), the preeminent American think tank, and the Canadian Council of Chief Executives, as well as the Mexican equivalent, Consejo Mexicano de Asuntos Internacionales. In May of 2005, the three groups, as a result of their joining forces in a Task Force, released a report entitled, “Building a North American Community,” in which they state that, “The Task Force offers a detailed and ambitious set of proposals that build on the recommendations adopted by the three governments at the Texas summit of March 2005. The Task Force’s central recommendation is establishment by 2010 of a North American economic and security community, the boundaries of which would be defined by a common external tariff, and an outer security perimeter.”¹⁰

Thomas P. D’Aquino was the Canadian Co-Chair of the Task Force report and is also the President and CEO of the Canadian Council of Chief Executives, other Canadian members of the Task Force report include Allan Gotleib, former Canadian Ambassador to the United States, Pierre Marc Johnson, former Premier of Quebec, John Manley, former Deputy Prime Minister of Canada, and after 9/11, negotiated the Smart Border Agreement with the US Secretary for Homeland Security Tom Ridge, and Wendy Dobson, former President of the C.D. Howe Institute, another one of Canada’s most prominent think tanks, and former Associate Deputy Minister of Finance in the Government of Canada.¹¹

The C.D. Howe Institute has on its board of directors, individuals from Imperial Oil Canada, a subsidiary of Exxon Mobil, General Electric Canada, BMO Financial Group, TD Bank Financial Group, Nortel Networks, Manulife Financial, Bank of Nova Scotia, Enbridge Gas Distribution, EnCana Corporation, Ford Motor Company of Canada, HSBC Bank of Canada, Astral Media, Merrill Lynch Canada, CIBC World Markets, and N M Rothschild and Sons Canada.¹²

In 1999, the C.D. Howe Institute published a report entitled, From Fixing to Monetary Union: Options for North American Currency Integration.¹³ In the paper, it is argued that, “The easiest way to broach the notion of a NAMU [North American Monetary Union] is to view it as the North American equivalent of the European Monetary Union (EMU) and, by extension, the euro.”¹⁴ It continued in discussing the issue of sovereignty, stating, “That a NAMU would mean the end of sovereignty in Canadian monetary policy is clear. Most obviously, it would mean abandoning a made-in-Canada inflation rate for a US or NAMU inflation rate.”¹⁵

The concept of a North American currency has not only been the object of discussion within powerful big-business think tanks, but has, in fact, been discussed in government positions. In May of 2007, Canada’s then-Governor of the Bank of Canada, David Dodge, said that, “North America could one day embrace a euro-style single currency,” the Globe and Mail reported. Further, the article stated that, “Some proponents have dubbed the single North American currency the ‘amero’,” and further, “Answering questions from the audience after a speech in Chicago, Mr. Dodge said a single currency was ‘possible’.”¹⁶

In November of 2007, the Globe and Mail reported that, “Canada should replace its dollar with a North American currency, or peg it to the U.S. greenback, to avoid the exchange rate shifts the loonie has experienced, renowned money manager Stephen Jarislowsky told a parliamentary committee yesterday,” and quoted Jarislowsky as saying, “I think we have to really seriously start thinking of the model of a continental currency just like Europe.”¹⁷ The article continued, “Mr. Jarislowsky, a former Canfor Corp. director, said the loonie’s rise to above par with the U.S. dollar is destroying manufacturing and could devastate the forest sector,” and that, “Mr. Jarislowsky said Canada could either aim for a common North American currency or peg the loonie to the U.S. greenback at about 80 cents (U.S.), allowing it to float within a small band.” Jarislowsky, a billionaire often considered to be Canada’s Warren Buffet, is a member of several corporate boards, and is also a member of the board of directors of the C.D. Howe Institute.¹⁸

Appearing on Larry King Live recently, former Mexican President and initial signatory to the Security and Prosperity Partnership, Vicente Fox, when asked a question about whether or not it was possible to see a common currency for Latin America, responded by stating, “Long term, very long term. What we propose together, President Bush and myself, it’s ALCA, which is a trade union for all of the Americas. And everything was running fluently until Hugo Chavez came. He decided to isolate himself. He decided to combat the idea and destroy the idea,” to which Larry King interjected, “It’s going to be like the euro dollar, you mean?” and Fox responded, “Well, that would be long, long term. I think the processes to go, first step into is trading agreement. And then further on, a new vision, like we are trying to do with NAFTA.”¹⁹

So clearly, there is a move on toward a regional currency for North America, in conjunction with the formation of a North American Union. Monetary sovereignty, and especially the power to create and issue money, is perhaps more central to the idea of a free, democratic and sovereign nation than the right to vote. If we do not have the power over the issuance of money, it does not matter whom we vote for. It’s the Golden Rule: he who has the gold, makes the rules. We, as Canadians, and other peoples of their respective nations should never relinquish this sovereignty over to regional boards, private banks, or other unaccountable individuals. It is our right, not a privilege, and giving up such a right is akin to giving up the right to vote; it is anathema to democracy and a free society.

¹ Drake Bennett, The Amero Conspiracy. The Boston Globe: November 25, 2007:

http://www.boston.com/bostonglobe/ideas/articles/2007/11/25/
the_ameroconspiracy/?page=4

² Herbert Grubel, Fix the Loonie. The Financial Post: January 18, 2008:

http://www.nationalpost.com/opinion/story.html?id=245165

³ Fraser Institute, Senior Fellows. Found at:  http://www.fraserinstitute.org/aboutus/whoweare/staff/seniorfellows.htm

⁴ Marci McDonald, The Man Behind Stephen Harper. Walrus Magazine: October, 2004:

http://www.walrusmagazine.com/articles/
the-man-behind-stephen-harper-tom-flanagan/

⁵ Fraser Institute, Senior Fellows. Found at:  http://www.fraserinstitute.org/aboutus/whoweare/staff/seniorfellows.htm

⁶ Herbert Grubel, The Case for the Amero. The Fraser Institute: September 1, 1999:

http://www.fraserinstitute.org/Commerce.Web/publication_details.aspx

?pubID=2512

7 Herbert Grubel, The Case for the Amero. The Fraser Institute: September 1, 1999,

Page 4:

http://www.fraserinstitute.org/Commerce.Web/
publication_details.aspx?pubID=2512

⁸ Grubel, Ibid, Page 17

⁹ Grubel, Ibid, Page 17

¹⁰ Council on Foreign Relations, Building a North American Community. Independent  Task Force on the Future of North America: May, 2005, Page vii:  http://www.cfr.org/publication/8102/

¹¹ Council on Foreign Relations, Building a North American Community. Independent  Task Force on the Future of North America: May, 2005, Pages 42-48.  http://www.cfr.org/publication/8102/

¹² C.D. Howe Institute, Board of Directors. Found at:  http://www.cdhowe.org/display.cfm?page=board

¹³ Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for  North American Currency Integration. C.D. Howe Institute, June 1999:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

¹⁴ Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for  North American Currency Integration. C.D. Howe Institute, June 1999, Page 22:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

¹⁵ Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for  North American Currency Integration. C.D. Howe Institute, June 1999, Page 23:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

¹⁶ Barrie McKenna, Dodge Says Single Currency ‘Possible’. The Globe and Mail: May  21, 2007

¹⁷ Consider a Continental Currency, Jarislowsky Says. The Globe and Mail: November  23, 2007:
http://www.theglobeandmail.com/servlet/story/LAC.20071123.
RDOLLAR23/TPStory/?query=%22Steven%2BChase%22b

¹⁸ C.D. Howe Institute, Board of Directors. Found at:  http://www.cdhowe.org/display.cfm?page=board

¹⁹ CNN, CNN Larry King Live. Transcripts: October 8, 2007:  http://transcripts.cnn.com/TRANSCRIPTS/0710/08/lkl.01.html

http://www.ira-401k-realestate.com/IYF-Video-Opt-In/

Link to the Video page after the video send me a email requesting the manual

johnkrol@ira-401k-realestate.com in the subject line say Free manual

Boomers Bank
The Investor’s Guide to Commercial Real Estate and Retirement Planning
How to Invest In Commercial Real Estate Using Your IRA or 401(k)

…Maximize Your Profit…and Save For Retirement

John krol IRA-401K-RealEstate.com 3037737143

Introduction 3
How to Use This Book 7
About the Author 9
Chapter One: Finances Today 10
Chapter Two: Baby Boomers and the Debt Junkie Generation 21
Chapter Three: Traditional Investments Strategies and Self-Directed Plans 30
Chapter Four: Establishing A Self-Directed IRA or 401(k) 42
Chapter Five: An Introduction to Real Estate Investment 47
Chapter Six: Investigating Your Investment Options 63
Chapter Seven: Property Assessment Strategies: Can You Make A Profit? 81
Chapter Eight: Benefits and Inflation 87
Chapter Nine: The Power of Commercial Real Estate Investing 90
Chapter Ten: Using IRA Money to Make A Real Estate Purchase 93
Chapter Eleven: Borrowing Money with Your IRA or 401(k) 97
Chapter Twelve: How To Use Partnerships To Create Wealth 100
Chapter Thirteen: Setting Up A Working Partnership For Your Real Estate Investments 105
Chapter Fourteen: Financing Analysis Pointers for Investment Deals 108
Chapter Fifteen: NOI, DSCR, LTV, and the Cap Rate 111
Chapter Sixteen: Real Estate Appraisals 115
Chapter Seventeen: Closing the Deal 117
Chapter Eighteen: Owning and Developing Real Estate 129
Chapter Twenty: Advertising and Selling Your Property 135
Chapter Twenty-One: A Secured Financial Future 140
Glossary 142
Further Resources 157
Appendix 160
Sample Program BrochureSample Subscription Agreement 161
Sample Subscription Agreement 162
Sample Private Placement Form 163
Sample Approval FormSample Investor Update 164
Sample Investor Update 165

Introduction

Why invest in real estate using your retirement plan? In this book, we’re going to be discussing several concepts for buying real estate using IRAs and 401(k)s, so-called nontraditional investments.
Let’s start by asking what advantage is there to all of this? Why not just let your IRAs and 401(k)s sit around and do whatever it is they’ve always done? Well, you can secure tax-deferred or tax-free income for one thing. Any time you have a profit or a gain, either you are not paying taxes on the gains until you start using the money, or, if it is in a ROTH IRA, you aren’t paying taxes at all. By having real estate in a retirement plan, you are also avoiding what’s known as capital gains every time you sell property. Your money is allowed to accumulate and your interest will compound. You can put all of the money back into your next deal. You’ve also got to bear in mind the current state of the economy. Money doesn’t just sit around these days. In most parts of the world, the dollar is losing value at a pretty alarming rate. The United States is a country at the edge of a financial and economic precipice, owing trillions of dollars to other countries and borrowing money against, well, the value of its existing borrowed money (we’ll talk about this later).
The infrastructure of the United States is at present rather unorganized. We aren’t producing much and so we’re importing more than we’re exporting. It’s basic mathematics. Notice how the prices of food and gas have been rising recently. Well, that should give you a pretty clear idea of what’s going on and what is likely to continue to happen (we’ll also talk about this a little later on).
The main focus of this book, however, is to demonstrate the value of nontraditional investment choices for 401Ks. Our goal will be to introduce you not only to the reasons why these choices are advantageous, it will be to also explain particulars of the related processes. For the sake of helping you confront your financial advisor or accountant, we’ll discuss the various strategies for undertaking this type of investment. We can also take you through the processes for finding appropriate real estate to undertake the actual investment. Since the property market can be a bit difficult to navigate, particularly if you’re a beginner, we’ll allow you to benefit from our wealth of experience and wisdom on the subject.
Before we go any further, however, as a continuation of this introduction to the book and its content, let’s talk about two concepts you will need to understand to get a handle on the investment advice we’re giving you. We need to establish here why most people don’t invest their 401K, despite the fact that it is a very sound financial move.
One of the main concepts most of your average Americans do not understand: you and your IRA or 401K are two separate entities. Repeat: you are not one and the same. Nor are you in any way shape or form joined at the hip. You will need to absorb this fact so you can begin to understand how to actually structure a deal with your IRA. If you don’t take the time to learn the difference between you and your retirement plan, you’re going to spend a lot of time wondering, “is it me or is it the plan that owes this money and needs to pay this bill?”. Let’s avoid confusion. Depending on the particulars of the loan you broker, the answer to this question, who owes the money, will be different.
The next concept you need to bear in mind is that you and your IRA/401K, being two separate entities, have a third-party administrator for all of your deals. All deals involving your IRA or 401K will have a third party acting as a record keeper and administrator. The third party will also act as a custodian or trustee. They will be the entity that is actually holding the money, the person who must meet government guidelines and regulations to be able to hold your retirement money.
Now let’s discuss the specifics of IRAs and 401Ks. We’re going to mention these entities quite a bit throughout the book so it pays to be clear now. An IRA is a place where you can keep your assets for retirement, all the money that will see you through when you are no longer working. What most people don’t understand, however, is that you can pour into your IRA whatever type of investments you want. Your assets can take any one of a number of forms. Your IRA is not an investment in itself.
Now we come to look at non-traditional investments. Of course, retirement planning is a big issue for a lot of people. Most people, when they think about it, consider themselves limited to stocks, bonds, mutual funds, and the like. There’s a general consensus that these are the types of things that we should be investing our money in so that it will grow in the years that we’re working, giving us something to fall back on when the time comes. What a lot of people don’t know, however, is that these investment types are not necessarily the best option. They certainly aren’t’ the only option. Non-traditional investments such as real estate, notes, foreclosure properties, rehab properties, and other things along those lines, may actually be much more viable investments for the baby boomer generation. In this book, we’re going to explore the ways you can go about investing in real estate for maximum efficiency and return.
By law, there are only two things you cannot put in a retirement plan. You can’t use retirement money to buy life insurance and you cannot put collectibles into your plan, such as art work or antiques, not that most of us have to worry about these types of things. Long story short, the IRS gives you a pretty free rein. They let you be your own advisor and best financial friend when it comes to retirement.
Many people believe that they already have a self-directed plan for their retirement, particularly if they are working with a brokerage firm. There is some truth to this. You select your own mutual funds and stocks in many cases, but most brokerage firms don’t allow their clients to invest in real estate or notes. They usually have a limiting plan for investment.
Unless you take something of a do-it-yourself route, real estate investment options using your 401k or IRAs are actually quite limited. To purchase such non-traditional types of investments within your retirement plan, you need to be allowed to self-direct. The person or entity holding your money, the custodian, must allow you to self-direct.
One of the perceived disadvantages to self-direction, of course, is that you are assuming responsibility for how well your retirement plan actually does. You can, for example, picking the wrong stocks and bonds, secure nothing but financial losses. You can do a lot to jeopardize your future if you don’t take the right approach. On the other hand – and let’s now consider an example – you can save yourself a lot of money by acting in a financially sensible and knowledgeable way.
Consider the case of Ms. X. Working as an investment advisor, Mrs. X has been investing stocks and bonds for many years in her retirement plan. Her plan, like most of her contemporaries, is driven by traditional types of investments. During her working life, however, Ms. X has invested a good deal of money in real estate. In fact, it’s become something of a hobby. One of the problems with this is that she had to pay taxes on the profits from the real estate investments she made. Using her retirement plan to make the investment, however, Ms. X discovered a way of avoiding these issues, as a number of other savvy individuals have done before.
Real estate investing is nothing new as a means of acquiring wealth; it is a practice that has been popular since the beginning of recorded history. Most of the wealthiest people in history have either secured or built the bulk of their wealth using real estate. Land was always the defining possession of the nobility in the vast majority of early socio-economic systems. During times of war and economic depression, land and property have also tended to hold up as sources of wealth. Things are unlikely to be much different these days.
Despite the popularity of real estate and the many centuries of experience buying and selling, even some of the most savvy investors are still unaware that they can use their retirement plans to invest and thereby save themselves from capital gains taxes and other such annoyances. Despite the fact that so many people claim to feel ‘trapped’ by traditional investment options, the vast majority are totally oblivious to the fact that real estate is available to serve as one rather convenient nontraditional investment commodity for use in individual retirement plans (IRAs) and 401(k)s.
The dual advantage of real estate and IRA or 401(k) investments are overlooked. The only requirement of the IRS is that you have a custodian for your IRA or other retirement plan, which we will review. Beyond that, you are free to use your IRA or other qualified retirement plan to invest in real estate. You can also use your plan to keep your real estate investment, earning money and limiting what you have to pay in taxes.
Since 1975 you have been able to use Keogh plans, now known as qualified plans, to purchase real estate as a tax-deferred investment option. With the increase to allowable contributions, simple employee retirement plans have become popular as well. In 1997, Roth IRAs also enhanced the popularity of tax-free investments. In 2006, the establishment of Roth 401(k)s made it possible for deferrals to be made regardless of salary amounts. The long and the short of it: at this point in time, investment options are phenomenal and, as we shall explore, the need for making sensible investments has never been greater. Whether you currently have retirement funds or you’re looking to set up funds for investment purposes, the time is right for you to make an investment in real estate using your IRA or qualified retirement plan. This book will show you how.
http://www.ira-401k-realestate.com/IYF-Video-Opt-In/