30. 💸 Let’s Talk About Money!

Hey everyone! Today we’re going to crack open one of the biggest puzzles in life: money. Not just the cash in your wallet, but the giant forces that move entire countries and even the world.

At PEAI, I often hear students talking about stocks, crypto, or even how their parents’ investments are doing. 📈 It’s not just adult stuff anymore, it’s part of the conversations in class, at academies, during family dinners, and even between classmates.

This is called macroeconomics — the study of how entire economies behave. By the end of this post, you’ll understand enough to wow your parents when they mention interest rates or stocks at dinner.

💡If you remember back in February, we did a post called Investing/Trading Simulator (Market Manipulation) where you tried out a trading game. That was just practice. Today, we’re moving one step closer to the real thing.

🚨 Breaking News: The Fed Moves the Lever

On September 17, 2025, the U.S. Federal Reserve (the Fed) cut interest rates by 0.25%, moving them to a range of 4.00%~4.25%.

👉 This was the first cut since December 2024.

Why does this matter?

Because the Fed is like the captain of the world’s money ship. When they steer, waves ripple across the entire planet, from Wall Street in New York 🌆 to Seoul 🏙️.

📖 The Core Ideas (Simple but Powerful)

1. Interest Rates: The “Price Tag” of Money

   High rates = borrowing is expensive → people spend less, companies invest less.

   Low rates = borrowing is cheap → people spend more, risk appetite grows.

   
   

2. Why the Fed Raises and Lowers Rates

   When inflation rises too fast (prices of food, gas, and essentials), the Fed raises rates to make borrowing more expensive. That cools down spending and slows price growth.

   
   

   When inflation starts to settle and jobs weaken, the Fed cuts rates to make borrowing cheaper, encouraging people and businesses to spend again.

   
   

3. Inflation: The Silent Shrinker

   If inflation is 3%, that ₩10,000 bento will cost ₩10,300 next year. Your money’s “buying power” shrinks.

   
   

4. Jobs & Spending: Domino Effect

   More jobs → more spending → sometimes higher inflation.

   Fewer jobs → less spending → slower growth.

   
   

5. Mortgages & Everyday Life

   When the Fed increases rates, banks raise mortgage rates (home loans). Families must pay more each month, leaving less leftover for vacations, new electronics, or fun extras.

   
   

6. Risk-On vs. Risk-Off

   • Risk-On = People buy Tesla 🚗, Apple 🍏, Bitcoin ₿, or even local apartments.

   • Risk-Off = People hide in safer places like government bonds, gold, or the U.S. dollar 💵.

     
     

7. The Stagflation Fear

   Economists get nervous when prices keep rising but jobs shrink. That’s stagflation — and it squeezes the middle class the hardest.

Did You Know? 🤯

• U.S. inflation right now = 2.9%. Korea = only 1.7% → meaning prices here are more stable.

• U.S. unemployment = 4.3%. Not terrible, but higher than last year.

• Japan owes 260% of its GDP in debt, yet still hasn’t collapsed. Why? Because global investors trust Japan’s system.

• When the world panics, everyone runs into the U.S. dollar 💵 like it’s the safest bunker.

🌟 Why This Matters to You

• If your parents’ mortgage rate goes up, they pay more each month → less leftover for family fun.

• If oil prices rise, even your favorite street food gets more expensive.

• If tech stocks fall, your favorite companies (Apple, Netflix, NVIDIA) might delay new products.

See how these “boring numbers” actually shape your everyday life?

🚀 Final Takeaway

Money isn’t just numbers. It’s human behavior, trust, and choices. One decision by the Fed in the U.S. can ripple across the world and change how much ddeokbokki, bubble tea, or sneakers you can buy.

📝 Class Investment Challenge: Grow the Snack Fund! 💰

Here’s the fun part. Each class (SM1, SM2, ST1, ST2, SW1) will get $50 (~₩70,000) to invest in an asset of their choice. That’s a total investment pool of $250 (~₩350,000) we’ll try to grow for December’s Snack Fund.

Your class may also use leverage up to 5x (five times), which can multiply both gains and losses. All positions will be closed by Friday, December 5th, and we’ll celebrate with a snack party (or food depending on the results) during the second week of December.

⚡ Bonus Alert: The first-place class (the one with the biggest gains) will also get an extra boost added to their snack fund!

✅ Your Task in the Blog Comments

In the comments section below, write a short investment pitch for your class. You may ONLY choose one from the tradeable assets listed below, no outside assets are allowed.

Your comment should include:

1. Which asset your class should pick (choose from the list below).

2. Your position: buy/long (bet it will rise) or sell/short (bet it will fall).

3. Your reason with a short explanation (why you believe this trade will help your class grow the snack fund).

💡 Homework Examples

Example 1 📈

• Asset: NVIDIA

• Position: Buy/Long

• Reason with explanation: Our class should buy NVIDIA because AI chips are in huge demand all over the world. With the Fed cutting interest rates, investors are more willing to put money into technology companies, so NVIDIA’s stock has a good chance to rise. This will help our class grow our snack fund by December.

Example 2 📉

• Asset: Euro (EUR)

• Position: Sell/Short

• Reason with explanation: Our class should short the Euro because the U.S. dollar is getting stronger after the Fed’s policy moves. When the dollar rises, the Euro usually weakens. This could give our class a chance to profit by shorting the Euro.

📊 Tradeable Assets for the Challenge

🌍 Indices

• S&P 500 (U.S.)

• Nikkei 225 (Japan)

• DAX 30 (Germany)

• FTSE 100 (UK)

  
  

🏛️ U.S. Stocks

• Apple

• Microsoft

• Meta Platforms (Facebook)

• Tesla

• NVIDIA

• Netflix

• Alphabet (Google)

• Oracle

• Advanced Micro Devices (AMD)

• Intel

• Palantir

• MicroStrategy

• Walmart

• Costco

  
  

🪙 Commodities

• Gold

• Silver

• U.S. Crude Oil (WTI)

  
  

💱 Forex

• British Pound (GBP)

• Euro (EUR)

• U.S. Dollar (USD)

• Australian Dollar (AUD)

  
  

₿ Crypto

• Bitcoin (BTC)

• Ethereum (ETH)

• Solana (SOL)

• Cardano (ADA)

• Ripple (XRP)

• Dogecoin (DOGE)