From today’s Herald-Leader, the global economy gets local.
Lexington-based Fasig-Tipton Co., North America's oldest thoroughbred auction company, announced Thursday it had reached an agreement to be acquired by Synergy Investments Ltd., a Dubai-based company headed by Abdulla Al Habbai, a close associate of Sheikh Mohammed bin Rashid al-Maktoum.
I can already hear the panic; the whole horse industry is going to die. Life as we know it in the Bluegrass is coming to an end.
Here are my questions:
How many people does this really touch?
How many people deal with Fasig-Tipton or Synergy Investments or Sheikh Mohammed bin Rashid al-Maktoum?
What does this mean to the horse industry?
What does this mean in a wider sense of global economic issues?
How many of you have ever been on a horse farm?
Keep the panic down, it’s just the rich playing with their money and below is a little homework if you care to do some reading.
From DollarsandSense.org - The ABCs of the Global Economy
In the 1960s, U.S. corporations changed the way they went after profits in the international economy. Instead of producing goods in the U.S. to export, they moved more and more toward producing goods overseas to sell to consumers in those countries and at home. They had done some of this in the 1950s, but really sped up the process in the '60s.
Before the mid-1960s, free trade probably helped workers and consumers in the United States while disadvantaging workers in poorer countries. Exporters invested their profits at home in the United States, creating new jobs and boosting incomes. The AFL-CIO thought this was a good deal and backed free trade.
From the Federal Reserve Bank of New York - Financial Globalization and the U.S. Current Account Deficit
Despite heavy borrowing in recent years, the United States has financed its large current account deficits without experiencing an unusual buildup in foreign investors’ holdings of U.S. assets. A new analysis suggests that this somewhat surprising development is attributable largely to rapid financial globalization, with cross-border flows worldwide rising as fast as flows into the United States. However, it could be harder for the country to sustain large deficits on favorable terms if the current wave of globalization subsided or the rate at which U.S. investors buy foreign assets increased.
And a little bit about Sheikh Mohammed Bin Rashid Al Maktoum and oil profits.