Imagine a world where everyone uses the same currency, speaks the same language, and works with a global agenda in mind. The crop grower in Singapore would market his labors well past the surrounding villages he’s used to selling to; one week a bushel may go to Australia and the next one to France. An expat in Hong Kong would not face “sticker shock” when looking for an affordable place to live because the prices would be almost identical to his primary residence in Canada. Financial institutions would be inter-linked around the world so that our economies shared a single heart beat in real time, meaning that a surge in local German markets would balance out a fiasco felt in Brazil.
Is this the world we’re headed for?
Some experts feel that for better or worse, signs of a true a global economy are already here. Take the summer of 2008, for example, when gasoline prices spiked up to over $4 per gallon. Americans were so fed up with OPEC that many decided to park their SUV’s and carpool to work, which threw the surplus levels of petroleum through the roof for the United Arab Emirates. Merely days later, the price of crude oil plummeted globally and people started returning to the pumps. These types of examples reach far past gasoline monopolies, however, and they can be found inside just about every business on Earth.
Recent stock market hiccups in the US sent other global markets into a tailspin only hours later. Likewise, a shortage of food, building materials, or even water can completely stall one part of the world indefinitely; in many cases those lasting effects can trickle all the way around the globe and straight into our living rooms. Almost every nation in the world is intertwined with others when it comes to producing income, which means that our local investments can easily be influenced by an outside source that is thousands of miles away.
Benifits of a Global Economy
A global economy is not all doom and gloom, however, because there are also several positive impacts that it can have on our finances as well. If a gallon of milk were to cost the same in China as it does in Russia and Argentina, for example, that would mean that the residents that were local to each province were earning roughly the same hourly wage. In turn, those families suddenly become important consumers because they have money to spend on goods and services, which creates a demand for more local business. Instead of our overseas motto being, “America the Greedy,” we simply become America; one of many prosperous countries where free enterprise heavily favors investors and our portfolios.
While it would be great to say that a true global economy is right around the corner, the vision of a world united is still little more than a daydream. Besides, those unpredictable swings in crude oil prices and the ridiculous markup on milk is the essence that drives the US economy through its peaks and lows; without it, there would be a tremendous shift in wealth across our nation. Even though a global economy may appear to be a noble concept on paper, the reality is that our world is simply not ready for it quite yet.