I landed in Panama last night for a quick business trip, and I have to say, I’m really astonished at the political situation here.
Central American countries like Panama are often referred to as “Banana Republics”. The term refers to largely impoverished nations with underdeveloped economies which are controlled by a corrupt ruling class.
I suppose Panama fits the description:
For example, an independent watchdog agency found that the top 100 members of Panama’s legislature increased their net worth by an average 114% PER YEAR over a decade-long period.
I guess these Panamanian politicians are just really good investors and real estate speculators.
Not to be outdone, the spouse of one of Panama’s most prominent and longest serving politicians has become one of the wealthiest people in the country… but claims to have no inside information about critical changes to the country’s laws. Somehow people actually believe them.
Panama’s current president is a truly bizarre human being. He says the most cringe-worthy things, often makes no sense when he speaks, and he refuses to acknowledge the existence of his own 5-year old granddaughter.
He has committed multiple crimes while in office and is widely suspected of receiving bribes from some very unsavory people.
Several members of the Panamanian first family have become expert ‘business consultants’, raking in mountains of cash in exchange for doing absolutely nothing of substance.
Panama’s president also uses government resources to attack political opponents, including censoring dissent and even trying to imprison a key adversary.
The local media here in Panama is a total joke, too. It’s basically a state-sponsored propaganda ministry that is in complete lockstep with the ruling party.
But hey, like I said, Panama is a ‘banana republic’, so you’d expect this sort of thing to take place here.
Except, as I’m sure many readers have figured out, I’m not actually talking about Panama. Everything I mentioned above refers to the United States.
It’s not to say that Panama is some pristine place devoid of any problems. Of course not. But every time I come here, this country never fails to impress me with its remarkable progress.
My first trip to Panama was two decades ago in the early 2000s.
Back then, Panama was in the throes of a deep recession, grappling with the fallout of the US military’s withdrawal.
The US presence in Panama (to watch over the Canal) had been a massive bonanza to the local economy. But after the military left, Panama was forced to reinvent itself from scratch.
Over the next two decades, Panama transformed into one of the most prosperous nations in Latin America. And the standard of living for the average Panamanian has risen dramatically.
This isn’t an accident.
Success, whether for an individual, a business, or a nation, is the result of hard work and responsible decisions.
Places like Singapore or Estonia are devoid of any real natural resources. But they became wildly successful as a result of hard work and responsible decisions. And, while it obviously still has its share of issues, Panama is on that path as well. Not bad for a ‘Banana Republic’.
I wish the same could be said of the United States.
The basic idea of “America” remains one of the most ingenious creations in 5,000 years of human civilization: take limited government and capitalism, enshrine personal freedom, and unleash it all on pioneering people who value community, hard work, and self-reliance.
And the idea worked. It created more success and prosperity than the world has ever seen. On top of that, the land was blessed with an abundance of natural resources, from unparalleled farmland to cheap energy. The US truly had it all.
Yet now the ruling class is doing everything they can to turn this success into a quintessential banana republic. They’re rapidly chipping away at capitalism, eroding social cohesion, undermining the rule of law, weakening the dollar, and even rewriting American history itself.
These problems are all fixable. Humanity has never yet met a challenge it couldn’t overcome.
But if things don’t change soon, the current trajectory will lead to a disastrous outcome.
The national debt is so high and rising so quickly that it’s only a matter of time before the government has to default. Social Security is already set to run out of money in ten years. The dollar is in real danger of losing its dominance as the world’s primary reserve currency.
Just one of those issues would be catastrophic to the US economy. Yet America faces all three of them, likely within the next decade… and that says nothing about the laundry list of other major problems.
We can certainly hope that voters have the good sense to elect responsible leaders who can make difficult decisions and put the good of the nation first.
But if that doesn’t happen, the current trajectory likely leads to higher taxes, increased civil unrest, less freedom, sustained inflation, and more.
This is the whole point of having a Plan B… which includes protections like
1) Having another place to go– a second residency or citizenship
2) Strategies to protect your assets and reduce your taxes
3) A diversified portfolio with a more global view
4) Ownership of real assets
It’s important to remember that there may be a finite window of opportunity for certain key strategies within a Plan B.
Panama is a great example of this.
Panama used to have a “Friendly Nations Visa” to grant residency to foreigners from dozens of countries. The rules were simple, the visa was very cheap, and the program was highly successful.
So successful, in fact, that the government was inundated with applications, and they ultimately changed the rules and made the program much more expensive.
Like most good things in life, Panama’s Friendly Nations Visa had a limited window of opportunity.
There are still plenty of other great options in the world (like Mexico). But when building your own Plan B, it’s important to not procrastinate.