The United States and the World
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True or False? In the United States it would be
unusual to ride in a bus made in Japan?
We not only live not just as Americans, but as
part of the global economy
Global Integration: Interdependency among
the countries of the world, especially within
financial markets and telecommunications
Telecommunications: Long-distance
electronic communication
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First Transatlantic telegraph completed in
1866
With the invention of the semiconductorcomputer-chip telecommunications took off
Other inventions as well: communication
satellites, Radio and TV wave, Fiber-optic
cables and internet
Before the 1990’s all TV and Radio in the
Eastern Hemisphere was state run and state
controlled
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Viewers in other parts of the world are
changing their habits
India: they buy outfits worn by popular music
television performers
More of the world’s people want to learn
English as a 2nd language
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Because of the speed and power of
computers and affordability of
telecommunications, the world has become
one financial market
Started in the 60’s and 70’s when U.S. banks
developed worldwide branch networks of
loans and foreign exchange trading
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When each country’s stock market is linked
worldwide, problems can arise
Stock Market Crash of 1929: Great
Depression
Stock Market Crash of 1987: Dow Jones fell
508 points, largest one loss in U.S. History
Less than 7 hours more than $500 billion
corporate value disappeared
Global financial market causes everybody
everywhere to feel affects of panic
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Nothing seems more American than Burger
King now owned by the British
Japanese own over 30% of office space in
downtown Los Angeles
Indonesian firm owns Chicken of the Sea
Tuna
German company owns Aldi’s
British company owns French’s mustard
Germany company owns Reebok
Japanese company owns 7-Eleven
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Direct Foreign Investment- purchase by
foreigners of real estate and businesses in
another country
Some Americans want to restrict it
Great Britain was the biggest foreign investor
in the American railroads in the late 1800s
and early 1900s
Many people argue against foreign ownership
of American companies because they are
worried about foreign control
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Foreigners own about 27% of all U.S.
government securities (short and long term
debt)
Does the U.S. government have more control
over foreigners?
Yes, because they own 27% of U.S. public
debt, they are subject to U.S. policy
Government could wipe out the real value of
the U.S. debt that foreigners own by creating
tremendous inflation