FREE: JOIN 100,000+ READERS   

≡ Menu

More from Panama

I’ve always loved the women here.

There I said it. I’m only human.

To be honest, this is one of the great things about living free overseas, and I don’t just mean romance; when I’m outside of the United States, I have access to a completely different caliber of people– both expats and locals.

The expats that I come across on my travels have all been exceptional individuals who share a common vision of freedom and prosperity; they have made a decision to live free and are in the process of exploring their options. They have realized that, in 2009, there are fewer and fewer reasons to be committed to geography– technology and modern air travel make it possible to earn a living anywhere in the world.

Similarly, the locals that I have met and become friends with are successful and well-connected– prominent lawyers, brokers, bank presidents, military officers, etc. Years ago when I made the decision to leave the US, I was surprised at how easily one can become acquainted with influential locals in foreign countries.

Influence is much more difficult to attain in the United States. I am neither a billionaire, nor union leader, nor CEO of a bankrupt company, which means I have no political influence whatsoever… and am powerless against judges, police, the IRS, and dozens of other government institutions that can restrict my freedoms on a whim.

You can be sure, though, that if something happens to me in the countries that I frequently travel to, everything is resolved in a phone call. When I travel to a new place, getting networked is a major priority. I’ll provide more of a ‘how-to’ guide in future mailings, but as a quick tip– I always start with lawyers and real estate brokers.

The right lawyers and brokers can be worth their weight in gold; they know the wealthy and well-connected, and they’ll usually open up their contacts if you establish a solid rapport. It helps to leave a small retainer on the table to show that you’re serious– but this small investment generates a huge return in terms of access and influence.

I’ve relied on this strategy in several countries to build a network and develop personal relationships, some of which have become quite close. I am best networked in Latin America since I choose to spend so much time there, mostly because of the freedoms that I enjoy in places like Panama.

As I mentioned yesterday, I am bullish on Panama’s future under its new President; there are few signs of economic slowdown by comparison to the rest of the world. While the country has experienced a decline in the construction sector, this is being offset by the Canal expansion and growth of other industries like call centers.

However, Panama does have an economic Achilles Heel; I’ll be discussing it tomorrow on my last day here, and then will shove off to Europe on Friday. If you can guess what it is, I’d love to hear from you.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below. You can Download our Free 17 page Report The 6 Pillars of Self Reliance.


Click Here to Download

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Dominick

    Panama’s currency is pegged to the US dollar. That could be a problem-soon.

  • Mark Wahl

    The only problem I see with any concentration of banking institutions is the potential of terrorist threat. One well-placed attack, either digital, or catastrophic, could disrupt a wide spectrum of financial interests.

  • Doug

    I suspect the economic achilles heel is in banking. A good portion of Panama City white collar work is likely dependent on banking–local but also international. Banking security in Panama could easily be undermined by pressure from the US and other strong-armed countries. If Panama doesn’t knuckle under, outside countries could make banking by their residents in Panama very difficult.

  • craig


    I appreciate the updates.

    Do you find this networking strategy is more difficult in any part of the world, or universally effective?

    Looking forward to hearing about your trip to Europe.

    Safe travels and train hard,


  • michael breault

    i’d be surprised if it didn’t concern the amount of shipping through the canal. with world trade off substantially etc

  • Bob

    Love your writings.

    The family and I are headed to Boquete in July for some R & R & R (rest, relaxation, real estate) and the kids are staying for the entire month for some intensive Spanish to internationalize them.

  • Robert Oulton

    For Panama, the reduced volume of shipping & travel

  • Jess Peery

    Panama’s Achilles Heel? That’s easy. Extreme Greed.

    Take HSBC Bank – one branch in Panama City, the other in NYC. Same building, same desks, chairs, electrical bills. Same rates for a CD. Yet there is one major distinction, one pays its employees roughly 1/4 of the other branch. In one, training, education, and courtesy are all part of the corporate culture – in the other – rudeness, sullen behavior and general incompetence are all part of the corporate culture. What’s the difference? Well the one in Panama is saving a hell of a lot of money in employee wage and benefits, but at what cost to its people?

    Multiply this over an entire country of industry minimalists, and you get what I call a “termite” culture. It looks solid from outside, but once you look closer you can see it’s riddled with rot. Panama is a river of sewage flowing past Gucci stores. The next time you grab a taxi on your way to a night on Calle Uruguay and you whip by a group of Panamianians waiting patiently at a bus stop for the next diablo-rojo (enjoying the best that their country has to offer admist a swirl of choking fumes and dirt), consider for a moment what it must be like to accept a life riddled with corruption, injustice, and poverty. Look out your window at yet another high-rise planned by foreign bankers and developers in Panama, and try not to notice that those buildings are empty. Did you catch the looks on the faces of the people walking through sewage on their way to work at HSBC, or any one dozens of other banks shielded in glass and steel? In a manic thirst for a fast buck, Panama is eating itself from the inside-out. And it shows, if you care to look.

  • Jack Meligan


    Panama’s economic Achilles Heel is that they use the US dollar as their medium of exchange. Deflation, Inflation whatever we have, they get too.

  • norman Schnuir

    Panama’s weak link maybe a combination of the link to US dollar and decision to widen the canal which is still to be decided?

  • Doc

    Ditto. The dollar as their currency will be their demise.

  • Sailor

    Two words: Chinese ownership

  • Matthew Kelley

    There are several achilles heels in panama. The immediate one is that it is too close to the USA and it is crawling with undercover U.S. intelligence. Even the border control in Paso Canoas is manned by openly uniformed U.S. officials. In some ways it is like not even leaving the USA. The second heel is that with the new IMF loans for canal expansion the international bankers will in the next decade be dictating to Panama new laws. ALL countries eventually get into trouble by taking loans by the international loan sharks. Just read the book “confessions of an economic hitman” by MR. Perkins. For those who can ignore this or dont mind it, the country is WONDERFULL. There is still a LOT more liberty in Panama than in the USA today. Real estate is overpriced but regular living expenses are very affordable.

  • George Franco

    Would love to find out if there are reasonable rentals in Panama, so that I could try out the country before buying. ????

  • Francesco

    Dominick is right, the problem is the dollar peg. More than a dollar peg, just practically the use of US dollar as national currency. The US government prints money and destroys the dollar, but at least gets the money to spend. Panama no, the national wealth is going to be destroyed but Panama gets nothing in return. So the situation is even worse than in USA in this respect.

    Also the obvious result is high or hyper inflation and this is a major problem for the poors that are a lot. If they get badly hurt by inflation, will they keep voting for sound governments or will they choose populist candidates? I suppose the second.

    It would be much better for Panama to immediately abandon the US dollar. Perhaps using the dollars to buy gold as Ecuador and Venezuela are doing. I tried to use a lawyer to transmit this message to members of the government in Panama, but realize that it is a tough choice. Will the new president have the hearth to take it? No idea!

  • John McChristy

    Panama’s problem is its relationship to the US dollar which is going down the drain.

  • Tom Tucker

    I would say the extremely fast influx of expats is creating a bubble economy, although only a guess. I have wanted to check Panama out, but have not been able to drag myself away from Thailand for the last several years. I retired from Canada to Hua Hin last August.

    I did holiday and travel around Cuba back in 2002 and my experience with the country was very similar to the comments mentioned in your missive on Monday. The people have no freedom, and in general are terrified of the authorities.

    Like the short new updates, I get a lot of financial newsletters, and lately have found it hard to keep reading and digesting all the info provided. This is a little lighter format, and so far has been an interesting and enjoyable read.

  • Charley

    Dominick beat me to it except they aren’t just pegged to the US dollar, The US Dollar is the currency of Panama.
    This is a huge threat hanging over their economy, although they might not experience the kind of inflation the US is doomed to experience simply because they aren’t the ones receiving all the newly printed dollars, and having the advantage of containment within their borders they might escape the catastrophe headed toward the USA.

  • Me

    Dollar link?
    Not as much as most think after all most countries have USD as their strategic reserve currency still. Nope energy is the achilles heel.

  • Scott

    In addition to the obvious replies – concerns about the dollar peg, banking safety etc.

    What about the eventual opening of the Northwest Passage taking traffic away from the canal?

  • Andrew

    At first, I was going to suggest that Panama’s use of the USD was its Achille’s Heel. However, it is my understanding that Panama has no legal tender laws and no central bank – freedoms which may enable their banking industry to mitigate or avoid altogether adverse effects associated with the USD’s steady decay. My second thought is that the covert involvement of various U.S. agencies in the drug trade along with the overt “war” of other U.S. agencies against the drug trade give rise to all manner of complex, nefarious entanglements which, under the anti-laundering guise, potentially compromise the ability of Panamanain banks to protect the privacy of their North American customers or their willingness even to accept such customers.

  • Cosmicac

    Good comments all…. energy a serious problem

    I look at Drugs and corruption as primary problems for all of Latin America. As long as some decent percentage of reserves are put into gold etc…

    Altough as it only takes a phone call and “a small retainer” to get the information you want or possibly smooth things over…. maybe the corruption isn’t so bad… Did I say that????

  • Grace

    Panamas’ achilles heel is the lack of competent, educated workforce.

  • freddy hernandez

    The problem with Panama is the legal system is a little backward and undeveloped. That’s why a few well placed connections go a long way. The bureaucracy is a maze. That’s why lawyers even the mediocre ones are indispensable, because they are the only ones that know their way around the maze. All in all still a nice country for a host of other reasons.

    Freddy in Panama

  • Me

    Energy cost affect consumer price costs, this much is obvious. Panama has some of the highest energy costs in Latin America. Power outages still a problem. One that requires substantial capital investment. Energy infrastructure for a country that gets a lot of capital from the banking sector seems like it should be a priority. The USD is a problem but its a problem for pretty much any country you choose to throw a dart at on a world map.

  • KonstantinMiller

    Hi! I like your srticle and I would like very much to read some more information on this issue. Will you post some more?

Read previous post:
Interesting opportunities in Panama

I'm back in Panama today... I've never been so happy to see Panamanian soil before; the trip to Cuba, which...