EPISODE 1 Introduction - 2022 April

through the scope of financial literacy

1 - Pilot Podcast Episode: Empower me nyc - financial literacy for girls

To help younger people have a global understanding of the world around them, important political, social, and economical events happening worldwide

I have created this straightforward set of podcasts to help explain intricate complicated events in a way that you can understand - goal of creating and expanding accessibility to young girls succeed in the business enviropnemtn typically dominated by men

Through the usage of metaphors to ‘dumb down’ complicated things 

“Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.”

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EPISODE 2 Stock Market - 2022 May

2 - What is the stock market?

Before we get into what the stock market is, let’s first talk about why we need it

Businesses need the stock market in order to raise money or what they call capital

The stock market allows both buyers and sellers to negotiate prices and makes trades in order to earn this money

These negotiations happen through a variety of ‘exchanges’. The New York Stock Exchange or NASDAQ are two examples of exchanges where companies can list shares of their stock

You can think of a share of stock like a piece of cake -

Let’s say you have a super valuable cake that everyone wants

The high interest of the cake as a whole will drive the price of one piece of this cake up making it more expensive

If you buy one piece of cake or one share of stock, the hope is that the demand of that slice will increase over time which makes your one piece of cake more valuable and increases the price - If you bought that piece of cake at $20 over time the goal is that it will get more successful and desirable. That piece of cake is now worth $200 even though you only bought it at $20 - This is how people make money through the stock market

If you bought 100 dollars worth  of apple stock ten years ago, today that would be worth $800, that is a 700% increase over ten years

The craving of a delicious frosted warm piece of cake that you might have is how people feel about investing in the stock market!

However, the stock market isn’t entirely all sunshine and rainbows

The higher the risk - The higher the reward

This means that if you purchased five cakes at a super high price it might be completely successful in that the price will increase over time

However, unexpected events can occur - like war, poor company performance, bad publicity, which drives the price of that stock down

If something like this happens, you will be earning zero to little money from your investment or worst case scenario, losing vast amounts of money - which is where the risk of the stock market comes to life.

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EPISODE 3 Inflation - 2022 July

3 - Inflation

What is inflation?

Have you ever wondered why a chocolate bar used to cost 5 cents and now costs around 2-3 dollars?

Well that concept is called inflation

The fancy way to describe inflation is a sustained upward movement in the overall price of goods in the economy.

The common idea that the government should simply print more money so that it’s citizens can in result, have more money is what leads to inflation

If the dollar is overly printed, it loses its value which is why classics like our chocolate bar raise in price over time

 

Inflation is a sustained upward movement in the overall price level of goods and services in an economy. It corresponds with a loss of purchasing power for a currency that's utilized within the economy. It takes more currency units to buy the same amount of goods and services as a result.

 

Gasoline prices were nearing record levels in the United States in February, even before the Russian invasion of Ukraine.

Now, the price at the pump is higher than ever.

Prices have also soared for the heating oil and natural gas that millions rely on to heat their homes in the U.S. and Europe. But in America, the availability of gasoline and the price at the pump are the ultimate modern enemies

Issues like war: for example the ukraine russian war also greatly affect gas prices. For now, Americans are telling pollsters they support sanctions on Russia, including a ban on Russian energy imports to the U.S. — even it means higher prices for gasoline.

After all, who wants to admit their moral objections to Russian atrocities in Ukraine might be so easily overcome by selfish interest? However supporting your family is the main priority and concern

 

An increase in the supply of money is the root of inflation, though this can play out through different mechanisms in the economy. A country's money supply can be increased by the monetary authorities by:

• Printing and giving away more money to citizens

• The Federal Reserve System was established to improve the flow of money and credit throughout the United States in an effort to ensure that banks had the resources to meet the needs of their customers in all parts of the country

 

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EPISODE 4 Federal Reserve - 2022 August

4 - FEDERAL RESERVE

The 12 Federal Reserve Banks and their 24 Branches are the operating arms of the Federal Reserve System. Each Reserve Bank operates within its own particular geographic area, or district, of the United States.

• The Federal Reserve System has a two-part structure: a central authority called the Board of Governors located in Washington, D.C., and a decentralized network of 12 Federal Reserve Banks located throughout the U.S. One of the most visible functions of the Fed plays out at the meetings of the Federal Open Market Committee (FOMC), which bring together members of the Board of Governors and presidents of the Reserve Banks to set monetary policy.

• The Fed’s structure has been set up by Congress to ensure that monetary policy is insulated from political pressure. The Fed’s decisions are also protected from interference from other arms of the federal government. Specifically, policy and operational decisions do not require approval from Congress or the President. Ao because of these distinct seperations, the Fed’s operations are not financed by appropriations from Congress. The Fed is able to self-fund its budget through interest earned on U.S. government securities it holds, interest on loans to financial firms, and fees charged to banks. While the Fed’s structure shields it from political pressure, Congress still has the power to change the laws governing the Fed and its structure. In addition, the Fed regularly reports to Congress on monetary policy and other matters, and undergoes an audit process each year. Basically, while the fed does not specifically associate with governmental pressures, a check system is put into place so that power isn’t abused. As such, the Fed is commonly described as “independent within the government,” or as a “quasi-governmental” agency.

• The Federal Reserve seeks to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down.

  • The Fed and the people who work inside of the fed decide when to print more money

  • They think about how the printing of more money will affect inflation and incorporate those effects into their decisions

  • The U.S. Federal Reserve controls the money supply in the United States, and while it doesn't actually print currency bills itself, it does determine how many bills are printed by the Treasury Department each year.

• Legally devaluing (reducing the value of) the legal tender currency

• Loaning new money into existence as reserve account credits through the banking system by purchasing government bonds from banks on the secondary market (the most common method)

Economic growth: This is the term used to describe an increase in the amount of goods and services produced by the county, known as gross domestic product 

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EPISODE 5 War Impact on Energy Crisis - 2022 September

5 - The impact of war on global energy: Ukraine war global energy crisis

 

Prices of goods and services are rising across the world constantly, affecting the most vulnerable people.

These expenses and hardships are furthered when considering how the global cost-of-living crisis threatens to push more people into food insecurity and extreme poverty by the end of 2022 and into 2023

 

Taking this into a real life situation, the war in Ukraine has had alarming consequences on our world. A world already shaken up economically by covid 19, climate change and many other global issues. While serious damage is being done to our economy this damage is tenfold to what those already struggling financially experience. 

 

In order to try and help combat this worrisome inequality and struggle, The United Nations Secretary-General has established a Global Crisis Response Group on Food, Energy and Finance in the UN Secretariat, with the following policy recommendations:

• In regards to food, hunger and famine are far more prevalent especially when important trade countries close their markets

  • Unjustified and unnecessary exportation restrictions are placed which is another issue to resist and combat

  • Additionally, creating a centralized reserve to aid countries who are already predisposed to mass amounts of hunger and famine

• In regards to energy, the solution is trickier because the only truly long term and effective solution is to accelerate the deployment of renewable energy into all communities, cities, and countries

  • This hits at the larger energy issue the earth faces, and in crisis of course these preexisting problems are simply accelerated

• The G20 or Group of Twenty is an intergovernmental forum made up of 19 countries and the European Union. It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, and sustainable development

  • We NEED urgent action by the G20 as well as other institutions with this same goal to increase liquidity and fiscal space

  • This way, the government will be able to provide safety nets and aid to those in need such as the poorest and most vulnerable communities

Rising energy prices are accelerating the cost-of-living crisis and sustaining the vicious cycle of constrained household budgets, food insecurity, energy poverty, and rising social unrest. The crisis is deeply impacting vulnerable populations in developing countries, threatening hard-won gains in the access to energy. The first step to fixing this problem is understanding- by donating to organizations that address these problems head on. Below I’ll link organizations that make an impact on solving these crises.

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EPISODE 6 Recession Savings - 2022 November

6- How to save in a recessionary environment?

 

In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending

 

• During a recession there are no full-proof ways into not losing money however some rather than others have been proven to be more safe

  • Health care and consumer staples stocks or funds

    • During a recession, some sectors of the economy tend to outperform others as consumer needs shift.

    • There are 11 sectors in total however during a recession the health care and consumer staples sectors are proven to be the safest to invest in as they outperform the other types of companies

    • A 2021 study titled "Is Healthcare Employment Resilient and 'Recession Proof'" found health-care hiring remained stable in spite of economic downturns, one indication of how recession-proof the healthcare market was even before a pandemic-related downturn.

    • The health-care sector includes biotech and pharmaceutical companies. The consumer staples sector includes food and beverages, household and personal products and even alcohol and tobacco.

      • In easier terms: People are always going to need doctors and medicine no matter the situation

      • People will always need their “consumer staples”

      • This is why it is safest to invest

  • large-cap stocks:

    • These are what you would call your “blue chip”, high quality stocks. Your amazons, your apples, your microsofts

    • The stocks that are proven to perform well no matter what the circumstances and have been around a long time so we know they perform in bad environments

  • income investments:

    • stocks that offer regular and steady income, usually in the form of dividends, over a period of time with low exposure to risk. Income stocks usually offer a high yield that may generate the majority of the security's overall returns.

      • You want to invest in stocks with high dividends - you may ask what are dividends?:

        • A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business.

• It is important to get rid of debt and pay off loans

  • Prioritizing paying off high-interest debt with extra cash has long been standard advice from financial gurus. The reasoning behind this makes sense — you'll ultimately save more by paying down high-interest debt, reducing the total interest you pay in the long-run.

• Reassess your expenses and increase your savings

  • During a recession you are going to want to spend less and save more as you won’t be making as much money in a slower economy

  • You want to look at your expenses and get rid of the expenses that are not exactly necessary in the long run

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EPISODE 7 Gender Pay Gap - 2023 January

7 - Gender pay gap

New law passed pay transparency to help break the gender pay gap

 

Preliminary evidence suggests that the health emergency and the related economic downturn have impacted women more severely than men, partially re-opening gaps that had already been closed.

On its current trajectory, it will now take 135.6 years to close the gender gap worldwide.

Biases on gender are not new and that means they are tuaght which just encourages these gaps as they physiologically burned into people heads from a young age

Institutionalized gender discrimination is everywhere in the United States, from the most public and glamorous lives to the most private and invisible ones. Considerable fame, as the U.S. women’s soccer team arguably enjoys, is no protection from its ills. For the team’s members, gender discrimination looks like paychecks as low as 38 cents for every dollar paid to members of the men’s team; fewer resources used to promote their games; less development support; and inferior playing, training, and travel conditions. . For the women at NASA, it looks like canceling an all-women space walk because the suits were designed for men.

In female-dominated sectors, the problem of gender discrimination is often worse than in sectors with a stronger balance, and even more pervasive. Consider home health aides and other domestic workers, who take home utterly meager pay, working around the clock, with no breaks or time off, with no health insurance or retirement security. For teachers, it looks like having to strike to make enough money to feed their families and pay the rent.

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EPISODE 8 Debt Ceiling - 2023 April

8 - What is the Debt Ceiling

New law passed pay transparency to help break the gender pay gap

 

Hello and welcome back to podcast episode 8. Today we're going to talk about a topic that's been making headlines in recent times - the debt ceiling. What is it and why is it important?

 

First things first, let's start with the basics. The debt ceiling is a limit set by the United States Congress on the amount of money the government can borrow to fund its operations. Essentially, it is the maximum amount of money the government is allowed to borrow to finance its spending.

 

Let’s use an example:

Imagine you have a piggy bank where you keep your money. Now, the debt ceiling is like a special rule or a limit for how much money your piggy bank can hold.

 

The government of a country, like the United States, also has a piggy bank of sorts. It's called the "Treasury," and it keeps the country's money safe. But here's the thing: sometimes the government spends more money than it actually has in its piggy bank.

 

To cover this extra spending, the government borrows money from other people, just like when you borrow a few dollars from your mom or dad if you want to buy something that costs more than your allowance.

 

The debt ceiling comes into play because the government can't keep borrowing endlessly. There's a limit to how much money it can borrow, just like there's a limit to how much money you can fit in your piggy bank.

 

When the government reaches that borrowing limit, it's like your piggy bank being full and unable to hold any more money. To borrow more, the government needs to raise the debt ceiling by getting special permission from people in charge (like the Congress in the United States).

 

So, raising the debt ceiling allows the government to keep borrowing money when needed, but it's an important decision that needs to be made carefully, just like when you ask your parents for extra money, they think about whether it's a good idea or not - what you want the money for, how important it is and other factors like that come into question

 

The debt ceiling was first established in 1917 during World War I as a way for Congress to control the government's borrowing and spending. Since then, it has been raised many times to accommodate the government's growing debt. It has also been raised because as we have spoken about in previous podcast episodes, inflation occurs over time so the cost of commodities has since increased which means we must increase the ceiling accordingly

 

Now, you may be wondering why the government needs to borrow money in the first place. The government borrows money by issuing bonds, which are essentially IOUs that promise to pay back the money with interest at a future date. The money borrowed is then used to fund various programs and operations such as national defense, infrastructure, social security, and healthcare.

 

So what does being in debt mean? Especially to a country?

 

Having TOO much debt can lead to several problems:

 

Interest Payments: The US government needs to pay interest on the borrowed money. As the debt grows, so do the interest payments, which can become a significant burden on the budget and limit funds available for other important expenses.

 

Reduced Flexibility: A high debt level can restrict the government's ability to respond to new challenges and emergencies effectively. It may limit options for additional spending or investment in critical areas.

 

Confidence and Credit Rating: If investors and other countries lose confidence in the US's ability to repay its debt, they might become less willing to lend money, leading to higher interest rates and potentially a loss of the country's credit rating.

 

Inflation Risk: While the US has been able to manage its debt so far, excessive money printing to pay off debt could lead to inflation, which reduces the purchasing power of money and affects citizens' everyday lives.

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EPISODE 9 Collapse of SVB and First Republic Bank - 2023 June

9 - Collapse of Silicon Valley Bank and First Republic Bank

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Imagine Silicon Valley Bank and First Republic Bank as two big piggy banks in the financial world. These banks are like places where lots of people and companies keep their money safe and where they can borrow some money if they need it.

 

Now, sometimes, these banks make loans to people and companies who want to do big projects or start new businesses. They believe that these people and companies will pay back the money they borrow with some extra money (called interest) on top.

 

But sometimes, the people or companies who borrow the money can't pay it back. It's like if your friend borrowed some money from you, but later, they couldn't give it back because they had some money troubles.

 

That's what happened to Silicon Valley Bank and First Republic Bank. They made some loans to certain people or companies, and those borrowers had a tough time paying back the money they owed. Because of this, the banks faced financial problems, and it became challenging for them to continue their usual banking operations.

 

To help fix the situation, other big banks or even the government might step in to provide support and make sure things don't get worse for everyone. It's like if your family and friends came together to help your friend who couldn't pay you back. They might help your friend and make sure everything gets back on track.

 

In the world of banking, these situations can happen from time to time, and it's essential for banks to be careful about who they lend money to and have a plan in case some borrowers have trouble paying back. It's all about trying to keep the money safe for everyone who trusts the bank with their savings.

 

Remember, banks play a crucial role in our economy, and we need them to be responsible with money to help people and businesses grow and succeed. And just like how you learn from your experiences, banks also learn from these situations to do better in the future.
 

**listen to earlier podcasts because some of the following terms were defined and discussed and might be confusing….

 

Silicon Valley Bank Specifics:

Executives tied up the bank’s assets in long-term Treasury and mortgage-backed securities, failing to protect against rising interest rates that would undermine the value of these assets. The interest rate risk was particularly acute for SVB, since a large share of depositors were startups, whose finances depend on investors’ access to cheap money.

 

When the Fed began raising interest rates last year, SVB was doubly exposed. As startups’ fundraising slowed, they withdrew money, which required SVB to sell long-term holdings at a loss to cover the withdrawals. When the extent of SVB’s losses became known, depositors lost trust, spurring a run that ended with SVB’s collapse.

 

First Republic Specifics:

First Republic survived after it was rescued by a consortium of major banks led by JPMorgan Chase, but the damage was already done. First Republic recently reported that depositors withdrew more than $100 billion in the six weeks following SVB’s collapse, and now it appears that it could soon fail too.

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