Honduras is the original “Banana Republic.” The American writer O. Henry coined the term in his early 1900s book of interlinked stories called Cabbages and Kings, set in a fictional Central American country named Anchuria.

Anchuria is Honduras—a backwater bedeviled by incompetent governments and thick with political conspiracies.

Honduras, from its very beginnings as a Spanish colony, was a laboratory for political skullduggery and state-sponsored murder. Founded as a colony by men ostensibly loyal to Hernán Cortés, the conquistador of Mexico, it quickly became a quagmire.

In the mid 1520s, word reached Cortés in Mexico that his subordinate Capt. Olid, sent to colonize Honduras, had staged a rebellion and declared Honduras an independent kingdom—arguably the first sovereign political entity in the Americas.

Cortés promptly organized an expedition to smash Capt. Olid’s upstart government, but by the time Cortés had slogged through hundreds of miles of jaguar-infested jungle, Olid already had been stabbed to death. A soldier loyal to Cortés, a certain Las Casas, had escaped from prison and dispatched Olid in a bloody duel.

Nearly 500 years later, Honduras is still repeating this history of tropical instability. On Sunday, word raced around the world that democratically elected left-leaning president Manuel Zelaya had been deposed in a military coup.

A longtime legislator and local entrepreneur of Italian descent, Roberto Micheletti, was selected to replace him.

It seems like a flashback, improbable, that a coup would occur now in Central America.

Is this Latin America’s last coup?

Perhaps in future history books de-facto President Micheletti will be regarded as the last Capt. Olid, the last politician to grab power by force in Honduras.

Or maybe history will repeat itself again and again, and Honduras will continue its cycle of politics dictated by blade and bullet.

Sociologically it’s primed for instability. Honduras has one of the worst unemployment rates in the world: about 30 percent. Economic inequality is dramatic: the wealthiest 10 percent of the population control over 40 percent of the wealth. Forty percent of the labor force works in agriculture: mostly coffee and bananas, unreliable commodity crops dependent on prices set by traders in wealthy countries.

It’s a combustible mix of statistics, and yet geopolitically Honduras is a lynchpin. It borders a trio of nations with a bloody history: Nicaragua, El Salvador, and Guatemala. All these countries were Cold War battlefields. And Honduras became a staging ground for revolutionaries and counter-revolutionaries. Meanwhile, CIA station chiefs in the capital Tegucigalpa acted as de-facto National Security Advisers to brutal pro-U.S. governments.

Honduras matters because it is the keystone country in Central America. If the U.S. government recognizes the coup that brought Micheletti to power, the die will be cast.

If Micheletti is not forced out by international pressure, and Zelaya reinstated, neighboring governments will be put on notice: the whims of military leaders and backroom politicking might at any time usher them out of power at the end of a gun.

Central Americans will then get the message: the international community doesn’t step in when latter-day “banana republics” are threatened by coups. And so, these countries are condemned to remaining banana republics.

When Honduran President Manuel Zelaya was taken from his house by soldiers and put on a plane to Costa Rica, he was still in pajamas.

In a single day—his country’s democracy regressed to the wearing of diapers.