Will Falling US Dollars Screw Panama’s Economy?

FAQ: Will Falling US Dollars Screw Panama’s Economy?

Tuesday, January 11 2011 @ 05:31 PM EST
Contributed by: Don Winner
Views: 56
By DON WINNER for Panama-Guide.com – Received today via email: “In as much as the US dollar is used interchangeably with the balboa, has anyone given serious thought how the falling US dollar (and some think its ultimate demise) will affect the Panamanian economy?”
Not A Factor: Panama’s economy has grown every year since the post 9-11 “crisis” of 2001 – 2002. In fact, Panama’s economy has been a leader among all of the economies in Latin America, and was for the most part unaffected by the most recent global economic crisis. While unemployment in the United States was at 10%, in Panama unemployment has dropped to historic lows. With regards to the use of the US dollar in the Panamanian economy, for the record the “Balboa” only exists as a figment of the Panamanian nationalistic imagination. And don’t forget, a weak US dollar can be a good thing sometimes. For example, an apartment that’s being sold for $250,000 is relatively cheap to someone spending Euros (193,000). The value of Panamanian goods and more importantly services (i.e. Panama Canal) are more competitive. And tourism also gets a boost as foreigners who are not spending US dollars see their money go further. Finally, remember that the value of any currency is based on supply and demand. When the US economy is weak the dollar is weak. Have you noticed that gas prices are starting to head back up? The US economy is starting to improve in a somewhat lethargic recovery. As that picks up speed, I suspect the US dollar will regain strength as well, especially once the newly bitch-slapped (by the people) US congress starts jamming some fiscal responsibility down the throats of the traditional Washington DC big spenders. They heard the message last November – and now they are either going to get thrifty or get fired. And of course, all of that is good for Panama as well. See, it’s all good…

Copyright 2011 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.

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3 Responses to “Will Falling US Dollars Screw Panama’s Economy?”

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