With Friends Like These...

“We are looking for ways for the euro to become another currency of legal circulation and to be accepted in the Panamanian market,” says Panamanian President Ricardo Martinelli.

No, dear reader… you have not been suddenly transported back to 2007…when rappers and supermodels were shunning dollars and demanding payment in the Esperanto currency.

Why now? When the eurozone’s continued existence is open to question?

Mr. Martinelli ventured to Berlin this week… and declared his dual allegiance to the dollar and the euro while standing next to German Chancellor Angela Merkel.

It’s a big deal because, as he acknowledged, “In Panama, the currency in free circulation is the American dollar.”

“You vill take ze euro and you vill like it!”

“Panama’s dollarized economy,” says a Reuters dispatch, “is one of the fastest growing in Latin America, expanding 10.6% last year with help from heavy infrastructure spending including the expansion of the Panama Canal.”

Does Mr. Martinelli know something about the fate of the dollar that we don’t? Doubful.

Still, we wonder whether he cleared this with anyone in Washington before he jetted off to Europe. He does remember what happened to Manuel Noriega when his paymasters in D.C. got fed up with him, right?

Perhaps he should have made a stopover in Switzerland before making his decision…

“I can’t exclude that in the coming years we may need the army,” Swiss defense minister Ueli Maurer says of the potential for euro-violence to spill over his country’s well-defended borders.

Quite the statement, only a few days after the European Union was awarded the Nobel Peace Prize… Heh.

Maurer also questioned, according to NBC News, how long “money alone” could quell the crisis. Since Switzerland hasn’t seen any conflict since the Treaty of Paris in 1815, one wonders if the defense minister is just getting cabin-fever and jumping the gun, so to speak.

David Gonigam

The Daily Reckoning