Mr. Thomas Flinn
Division of Corporate Finance
Securities and Exchange Commission

Dear Mr. Flinn:

I have reviewed your comments concerning past Central
American Equities filings and have attached my responses.
Please let me know if you need additional information.

Sincerely,




S/ Michael Caggiano

Michael Caggiano
President and CEO
Central American Equities



Form 10-KSB FYE December 31, 2004

Note 9  Sale of Asset

1. The value of the asset (Tropicana) was determined using
methods outlined in SFAS 144 paragraphs 34-35.  Tropicana
was an old bar whose hours and days of operation varied
considerably: usually it was open from 3 to 6 months of the
year and a few days of the week.  Tropicana was an
extension of our beach Hotel Sunset Reef and its finances
were included in the operating budget of the hotel.
Revenues amounted to perhaps $15-20,000 in 2004.  There
were some years when the corporation did not open or
operate the Tropicana.  Because the operations were so
small, the finances were considered immaterial and thus we
felt we were in compliance with SFAS 144 (and it was not
necessary to report the operations in "discontinued
operations").

2.  This is my error.  The 10-QSB (June 30, 2005) reporting
the gain on the sale of the asset was incorrect. I had
carried a wrong number forward from a previous financial
statement.  The loss reported in the audited financial
statements accompanying the 10-KSB for FYE December 31,
2004 is correct.  Since the 10-QSB for June 30, 2005 is
currently under review, I plan to include the correct
number in the reviewed version I plan to file within the
next week.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

3. I have been in touch with Louise Dorsey and, as agreed,
I am currently having the 10-QSB for June 30, 2005
reviewed.  As stated above, I hope to file the reviewed
version within the next week.

Form 10-QSB June 30, 2005

4.  For many years the officers of the corporation have
lent money to the corporation to help it survive.  These
loans have been faithfully carried on the books as debt to
officers in the financial statements.

Per the by-laws of the company, Board members were not
permitted to compensate themselves without the approval of
the shareholders.  I interpreted this by-law conservatively
and we never accounted for any interest payment on this
debt until shareholders approved a 5% interest on the debt
at the last shareholder meeting.  We calculated the total
interest payment and put it on the books in the first
quarter of 2005.  The Company was unable to pay the
interest through cash flow and by the second quarter of
2005, the total interest due was shifted to debt to
officers, hence the drop in interest payments in the second
quarter of 2005.  I believe this a correct interpretation
of our by-laws.  Since the 10-QSB for June 30, 2005, is
under review, I can put an additional note in the financial
statement further explaining the above.