Get your euros
Jul 11, 2022
Episode 710

Get your euros

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The dollar and euro are near parity. What now?

If you’re planning a trip to Europe anytime soon, now is the time to exchange your dollars for euros. For the first time in 20 years, $1 is nearly equal to one euro. We’ll talk about what it means for the global economy. Plus, mini-explainers on carry trades and Sri Lankas’s economy. And the moment space geeks have been waiting for: The first image from the James Webb Space Telescope is here, and it’s a beauty! Finally, Kimberly has a 7/11 tradition, and we’re here for it!

Here’s everything we talked about today:

We want to hear your answers to the Make Me Smart question: What is something you thought you knew but later found out you were wrong about? Send them our way. We’re at makemesmart@marketplace.org. Or leave us a voice message at (508) 827-6278 or (508) U-B-SMART.

Make Me Smart July 11, 2022 transcript

 

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

 

Kai Ryssdal: Charlton!

 

Kimberly Adams: It’s not Charlton, it’s Drew. I love how you blame Charlton for everything.

 

Kai Ryssdal: Well, it’s easier that way. Charlton and I have worked together for a long time. I’m Kai Ryssdal. Welcome back to Make Me Smart, making today makes sense is what we do, each and every day on this pod.

 

Kimberly Adams: And I’m Kimberly Adams, thank you for joining us this Monday. We’re gonna do the news, and then share a couple of make me smiles – well really, it’s one, but you know, what else? Yeah, but let’s start with the news. Let’s start with the news. Kai, why don’t you go ahead.

 

Kai Ryssdal: Alright. Okay, I’ve got three. Two of which are substantive, and one of which is merely informative. And I’ll start with that one first. If you had been following the Elon Musk Twitter saga since Friday, I will spare you the details. But there’s a little piece in New York Times today about what exactly the Delaware Court of Chancery is. And since that is where this whole thing is going to go to court, it might be interesting just to read it. It’s been around for 250 something years, this Delaware court. And it’s, it’s just an interesting little bit of background as to how this whole thing’s gonna get decided. I thought it was fascinating. That’s item number one.

 

Kimberly Adams: Like, what jumped out to you?

 

Kai Ryssdal: How old it is, actually, and how there’s only – I can’t remember if it’s five or six judges. But the catch with these people is that they’re super experienced. They do this all the time. Delaware, as we know, is a center for corporate incorporation. So they’ve got the expertise to hash out thorny cases like this one, or maybe not thorny cases like this one. I don’t know if this one’s thorny or not. I’m not a lawyer, thank God. But if you want to try this case, Delaware’s the place to do it.

 

Kimberly Adams: Okay, cool. All right, what’s number two?

 

Kai Ryssdal: All right. So that’s one. Number two, a piece of the Financial Times, report from the United Nations, saying the global population growth hits the lowest rate since the Second World War, end of the Second World War. So look, we cannot sustain a billion people on this planet without some changes. Let’s be clear about that. And we’re almost at a billion people. But here’s the deal. If global population growth slows too much, then those of us who are here, right, who need to be supported by younger working people will sort of be out of luck. And so slowing population growth is actually an economic story. It’s a labor market story. And I think we ought to all be paying attention to that one, okay. That’s story number two.

 

Kimberly Adams: What always fascinates me about that is these countries with rapidly aging populations are often the most hostile to people coming from countries with an overabundance of younger people to work there, right? And so you have examples like the United States, sure, but also countries like Japan, where they have this aging population, and not enough people to care for their older relatives, but still extremely restrictive immigration policies. And in parts of Europe, where they’ve really had this backlash against immigration, but still, ageing populations struggling to find people to care for them. Here in the United States, we have this massive crisis of a shortage of workers for older Americans, particularly people who want to age at home or age in place, and yet opposition to immigration of workers from people coming from countries where they have a lot more younger people. And I feel like it really does create this challenging dynamic. Years and years ago, I had a friend who was a home health care nurse who left the field because the wages were too low and people were mean and families were like awful to her. And one of the things that she said is, she’s like, I don’t think people have seriously taken into account who’s going to wipe their grandma’s bottom. She didn’t say it that way, but who’s going to wipe your grandma’s bottom, you know. And are you going to do it? Because I’m not going to do it. And so who’s going to do it? And that is a crisis I really don’t think people have paid enough attention to. Kitty Eisele has a podcast about this that’s quite good, about the struggles of being a caregiver in this economy in this world, where there aren’t enough resources to back you up, which I’ll find and put in the show page.

 

Kai Ryssdal: Born out of her experiences with her dad, right?

 

Kimberly Adams: Yes. exactly.

 

Kai Ryssdal: Kitty Eisele, former national public radio producer. She’s not stupid, she knows where she’s gone.

 

Kimberly Adams: No, no, she’s been taking care of her family and then doing this podcast.

 

Kai Ryssdal: That’s right. That’s right. And finally, and somewhat giggly, the euro and the dollar are at parity. That is to say, one dollar will get you one euro, one euro will get you one dollar. Why does that matter? Well, it matters for a lot of reasons, not the least of which is it’s a sign of weakness in the European economy and strength in the dollar. Europe is probably closer to a recession than we are, given the challenges they are facing with their energy supplies, given the challenges they are facing with Ukraine being right there, and given the challenges of the entire euro area. Now, does it in and of itself means something bad? No, but it’s a sign that things are not great in the Eurozone. I could also go on a whole riff here about the carry trade and what the Federal Reserve has to do with this, but I won’t, because that’s super…

 

Kimberly Adams: Oh do. Oh do. Oh come on.

 

Kai Ryssdal: Okay. So carry trade is when you arbitrage interest rates or possible gains in one currency against another. So the Federal Reserve is raising interest rates here, right? That will increase the value of the dollar. So you could buy dollars and arbitrage them against something like – I don’t know, the yen or something else and make money that way, okay? The carry trade, look it up. It’s really interesting. The dollar is doing really well. And it’s a phenomenon in global finance. All of which is to say, we are at parity, if you’re going to Europe anytime soon, buy your euros now. Buy them now. And have a nice trip.

 

Kimberly Adams: Alright, I’m trying to think, have I ever experienced a time when the dollar and the euro were at parity?

 

Kai Ryssdal: No, it’s been like 20 something years. I’m sure you weren’t in Egypt still, right?

 

Kimberly Adams: I mean, euro has only existed for 20 something years. I mean. Euro came in, what was it? 2000?

 

Kai Ryssdal: January 1. January 1, 2000, I think, right? Yeah. Whatever.

 

Kimberly Adams: I’m trying to remember because I was – this is going to be some deep dorkiness here. I was on the model European Union team in college when they were getting ready to transition to the euro. So I… oh, boy.

 

Kai Ryssdal: That’s pretty funny.

 

Kimberly Adams: Yeah, that exists, that exists. Wasn’t the Model UN, it was the model EU, for what it’s worth. I was Greece. Our team was Greece. And the year that Greece had the presidency? I was the Environment Minister for Greece at the regional competition. And it was quite the performance. I won a little competition internally. I’ll just save some myself.

 

Kai Ryssdal: Oh my lord. Oh my lord. All right, what’s your news?

 

Kimberly Adams: Other than that I’m a dork? Okay. Look, I was so fascinated over the weekend by these images coming out of Sri Lanka, of protesters storming the presidential palace, swimming in the swimming pool. I was listening to the BBC this morning, and apparently, there were farmers who walked for days to participate in this protest, and then got there and like cooled off in the pool. People were going to the gym had never seen a treadmill. So the reason I think this story is important, is because it’s the economic collapse of a country leading to the political collapse of the country. And as the Wall Street Journal points out, it serves as a warning for other countries that are in very precarious economic situations, and also very precarious political situations, and how quickly one feeds into the other. And as you know, I spent time reporting in Egypt, which is sort of a classic example of this. And the Arab Spring, started as economic issues that drove people into the streets and then became a political cascade that ended up toppling several governments. And so, a lot of people are looking at Sri Lanka and saying, you know, is this going to happen elsewhere? One of the stories that we have is a link to an explainer from the Associated Press, which is very good to lay out how Sri Lanka got here, because it’s a little bit complicated. And if you, like many of us, have not paid much attention to Sri Lanka lately, here is the nut graph: The government owes $51 billion and is unable to make interest payments on its loans, let alone put a dent in the amount borrowed – and I’m reading from the Associated Press here. Tourism, an important engine of economic growth has sputtered because of the pandemic and concerns about safety after terror attacks in 2019. And its currency has collapsed by 80%, making imports more expensive and worsening inflation that is already out of control with food costs rising 57% according to official data. Keep in mind here we’re very concerned about inflation at 8% or 9%. Imagine 57%. People are going hungry in Sri Lanka, government workers have been given days off so that they can grow their own food at home. Like think about that: you have a government job, and they tell you to take a couple days off per month, so that you can grow your own food, because people are going hungry. And Sri Lanka is turning to India and to China for help also the International Monetary Fund, but because there’s so much political corruption in the country, it’s hard for some of these international organizations to loan the country money, because they’re worried about where that money is going to go. And so now Sri Lanka is sort of flirting with the idea of buying discounted fuel from Russia, because Russia is selling it on the cheap, given everything. So it’s one of these stories that I think it’s very easy to dismiss as “Oh, it’s happening over there. Not really relevant to us”. But when this happens in one place, it can very easily happen in another. And what’s happening in Sri Lanka, the underlying causes of it exist in several other places. So that’s the thing.

 

Kai Ryssdal: Yep. I don’t think there’s anything that’s not relevant to us anymore, you know?

 

Kimberly Adams: That’s true. And I guess, depends on what us who you’re talking about also.

 

Kai Ryssdal: Yeah, but any us.

 

Kimberly Adams: Yes, any us. True, true, true, true, very true. All right. Can we talk about the fun thing now?

 

Kai Ryssdal: Yeah.

 

Kimberly Adams: Ah so excited.

 

Kai Ryssdal: My god, that was a squeak out of you.

 

Kimberly Adams: It was a squeak, because right before we started taping this, we got the first image from the James Webb Space Telescope JWST. First deep fields image, and it’s beautiful. It’s so pretty. It’s just so rich. And we’re going to be getting more images tomorrow. And very, very excited about this. One of the things they were saying in the press conference is that, this telescope is going to allow us to see images and get data from the images. And it’s not just the visual images, it’s also all this other information that will tell us, for example, the chemical composition of the atmospheres of planets of far away, to determine whether or not maybe we could live on – let me not say whether or not we could live on them, whether or not they’re habitable. And that’s really cool. And one of the scientists presenting at the press conference today with President Biden was saying, you know, it’s going to give us answers to questions that we don’t even know what the questions are yet. I love that.

 

Kai Ryssdal: I mean, the superlatives coming out with this picture are kind of amazing. I need a, like an annotated version of this picture to tell me exactly what I’m looking at. Because there is so much information in this picture, which we will of course put on the show page, and which by the time you hear this, you will have seen on whatever social media feeds or news feed you’re in, but there’s so much going on here that I need somebody to like walk me through and say this is that and this is this and those star things or whatever they are. There’s just a lot. Also, it’s a little blurry? Yes, I know, it’s looking at 13 billion light years, but you know.

 

Kimberly Adams: Well, I actually wonder, is it blurry or are we looking at so much visual information in a relatively small screen that does not have the resolution of the photo, that it looks blurry even where that resolution exists? Because I’m sure this photo is such a high resolution that even our computer screens don’t quite capture what the image looks like. So yeah. So maybe we just need to get Marketplace to pay for better graphics cards for our computers.

 

Kai Ryssdal: Yes, because that’ll definitely happen. That’ll definitely happen, oh my lord.

 

Kimberly Adams: Okay, we could geek out about this forever. But I do have one more make me smile. My niece, when I was taking her back from camp today, she was like, can we stop by a 711? You get free slushies today, because it’s 711 day. And I was like, no, because I’m a terrible auntie and I have to get back home. But because it is 711, there’s the other thing that happens on 711 day, which is that it is the perfect opportunity to listen to one of my favorite Beyonce songs.

[music]

 

Kimberly Adams: It’s called 711. It’s a great song. So if you have not listened to the Beyonce song 711 or watch the video, because the video was just so much fun, because, you know, we’re so used to seeing Beyonce just perfect. Perfect hair, perfect clothes, perfect styling – you know, very artistic. This is, you know, obviously, she still looks perfect because she’s Beyonce, but a more casual perfect of Beyonce. And it looks like she’s really having fun. And it’s really fun video. And so that’s 711 and that’s what I always think of on this July 11, 711. So. Have you seen this video?

 

Kai Ryssdal: Just perfect.

 

Kimberly Adams: All right. That’s it for us today. Tomorrow, we’re gonna do a deep dive on labor unions and labor organizing and why it works differently today, as opposed to in labor unions of the past. Our current economy and the way that we’ve sort of seen it work in coffee shops, and now in the tech field. I saw a tweet today with people encouraging Elon Musk’s children to unionize.

 

Kai Ryssdal: There’s enough of them.

 

Kimberly Adams: They could be a bargaining power.

 

Kai Ryssdal: Oh my Lord. All right. In the meanwhile, send us your questions or comments, whatever you like, we’ll take a voice memo or an email to makemesmart@marketplace.org. Or you can just call us, leave us a voice message, because they’re different. 508-U-B-SMART is the phone number. I’m never gonna get off that hill.

 

Kimberly Adams: I mean, I’m going to enjoy watching you to continue to climb that endless hill. Make Me Smart is produced by Marissa Cabrera. Today’s program was engineered by Drew Jostad.

 

Kai Ryssdal: Our senior producer and she have the voice message and voice memo is Bridget Bodnar, the Director of On Demand is Donna Tam. Sorry, I’m just checking for the slack where Bridget yells at me.

 

Kimberly Adams: Oh, I haven’t even looked at the slack. Are we okay?

 

Kai Ryssdal: It turns out Bridget was a Model UN’er actually.

 

Kimberly Adams: Ah, there you go. There you go. All the cool kids.

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