Comments (5)

• Steven Kane

  Does this mean that Panama is considering doing away with fiat entirely?

  I noticed Richard Rahn is going to be there, his book "The End of Money" is pretty good. Review of it here

  Published: October 20, 2004 2:32 PM

• Alex

  One thing that's strange about stuff like this is that one country will do something liberty oriented, and shirk another. We have countries doing liberty oriented stuff all the time - from tax breaks, to scaling back certain government organizations - but none of it happens in one place, at one time. When you look more deeply into stuff like this, you can see that it's mostly politics; politcians realizing that they have to cut something somewhere, or the house of cards is gonna fall - either politically or economically.

  What gets me is how people understand, on a base level, that taxation is bad for the economy, but become content when a politician promises some tax breaks (which never amount to anything drastic), and are happy and content to have merely a whole lot of their money taken, versus having a hulluva lot of their money taken.

  At any rate, if they mean business in Panama, it'll be a good thing - at least for the people there.

  Published: October 24, 2004 10:26 AM

• Steven Kane

  Alex: I would say that adopting a non-fiat medium of exchange would be a huge step towards freedom for any country. This is something I would love to see in the U.S. Perhaps if Panama successfully pulls it off, people will start to realize how fallacious the "necessity" for government regulated currency really is.

  Published: October 25, 2004 9:39 PM

• Alex

  You could be right. I'm just very skeptical - what even 'limited government' types consider limited is still huge, and just because one country doesn't have a fiat monetary system doesn't mean the U.S. will even acknowledge that it works. In fact I count on the opposite; people saying stuff like "well we have a fiat money system because we need free money and credit and this helps fuel the market and (blah blah blah)"

  People in our country are hostile towards the market - treating it as something inherently evil, from which Good Government needs to regulate, lest the vile businessmen of the world contemplate selling us something for lower prices. Hmmm.

  I've just been a capitalist long enough to know that there's no cure for stupid people in large numbers.

  Published: October 26, 2004 12:12 AM

• olmedo

  Just a clarification,

  
  The US dollar has, for more than a century now, being working in Panama as a “de facto� currency in the sense that there is no official law enforcing it and also, there is no central bank or strong banking regulation.Also, we dont have an especial currency agreement with the US. I think that it will be fair to say that panama is a free banking country.

  
  The Panamanian constitution establishes that there shall be no officially enforced currency. However trough the years Panamanian legislation has been enforcing the US dollar as binding in contracts. In the sense that we can sign a contract in EUROS but if at the end you want to pay me back in dollars Panamanian courts will support you. We, in Fundacion Libertad Panama, want to change that.

  Also, IMF is attempting to strengthen Panamanian banking regulation aiming at more banking concentration (there over 200 banks in panama a country of 3 million people) in the false hope of making the system safer. We are combating that.

  
  We like to make the Panamanian financial system as flexible as possible so that people may be able to actually choose the currency of their convenience.

  Published: October 26, 2004 12:13 PM