News from faraway places can create real changes at home. Last week news that Dubai World would not be able to meet its loan obligations sent stock markets plunging worldwide. Billions were wiped off the balance sheets of banks and fears of bank failures spread jitters around the globe.  

Many Americans might be forgiven if they had to look up Dubai just to find it on a map. Dubai sits on the Persian Gulf and is part of the United Arab Emirates. It is the jewel in the crown of the Arab world and is synonymous with outlandish luxury. It became the playground of the rich and famous with the world’s tallest building The Burj al Dubai hotel, an indoor ski mountain in the desert, a mall in inspired by Ferrari, and luxury housing developments like The Palm at Jumeriah and The World. These last two are sometimes used as prime examples of the excesses of the last decade in that they are housing developments built on man made islands in the Persian Gulf. The World looks like, well, a map of the world from outer space and The Palm is made of islands that form a palm tree. Homes in these developments have been sold to uber-wealthy clients such as David Beckham. Sales fell off the chart last year and now work has stopped at both projects.

There is no getting away from the fact that what happens in far off places can now affect the economy close to home. Thankfully, the “Dubai crises” seems to be overblown and unlikely to cause a true global banking crisis that pushes us into that double dip recession everyone is worrying about. It does remind us that globalization has the power to change our corner of the world.