The Migration of Money: An Interview with John O’Donnell - CKO of Online Trading Academy

Originally published on Finance Directory Ireland, May 17, 2012.

If you pick up a dollar, a euro, a yen or whatever the unit of currency you have on hand, do you ever think about what role that piece of the world economy plays or, more relevantly, where circumstances will take it? Recent events in the global economy have shown that many nations’ economic foundations aren’t quite as durable as previously thought.The current American recession has shown that no matter how longstanding an empire, in this case a system of finance long considered the most dominant in the world, everything is fluid and nothing is beyond decline, change, or the need for evolution.

John O’Donnell is an expert in finance who specializes in teaching about financial trends that have come and gone, and Alex Levin of Lance Surety Bonds sat down with John to discuss his view on what’s just over the horizon for the byzantine world of global markets.

The world market being what it is today where do you see the most fertile ground to lay seed for the future?

JO: China and Southeast Asia by far has the most stable economic growth rates today given their cheap and efficient labor markets and internet communication and logistics infrastructure.We especially like Singapore, Indonesia and India. I am however concerned that China will experience a burst of their real estate bubble in 2012 and slow their growth rate like USA experienced in 2006. If personal consumption in the West slows, then South East Asia exports will slow however.

What experiences have you had that point in the direction of the countries you've mentioned? Basically put, why there?

JO: Our company has opened via a global franchise model office in Jakarta, India, and Singapore. I have enjoyed travel and worked in the office of Singaporeand Mumbai. I have also invested and trading in those countries' securities through exchange-traded funds (ETFs). My company, Online Trading Academy, has adapted our courses’ content and teams, and localized the OTA content and service to fit these culture’s needs.

Looking at the world financial status quo today, where do you see the current major powers going in both of their respective placements in the world economic hierarchy, and in their involvement with each other?

JO: I see China exceed Japan GDP, and in 7 to 10 years from now the world will know two powers alone: USA and China. Eventually I predict good days ahead for India because of their rule of law and English speaking and IT skills via human resources. I expect Western Europe to suffer through this decade as they de-leverage their banking industry and try to save the Euro. It will be a messy situation.

Regarding the USA and its current economic situation, the recession, the housing crisis, unemployment and the like, where do you see the country going? What can be corrected and, more importantly, maybe even direly, what absolutely needs to be corrected for the country to right itself from its current slump?

JO: I see many USA sectors revisiting slow economic growth rates via a double dip recession. I am concerned about our lack of "quality jobs" growth. I am concerned about the U6 unemployment rate [which measures unemployment as well as marginal employment] being at 17% today - a dismal record, given all the multiple trillion dollar stimulus programs during the last 4+ years by both the Bush and Obama administrations, and of course the Fed's QE1 & QE2 programs. I am concerned about the single family housing prices continuing to fall in major markets and now that the "robo signing lawsuit against banks" has settled another new round of foreclosures driving home equity lower by 15% through 2014. And since the United States’ $14 trillion economy is 72% consumption based, I am very concerned about the de-leveraging balance sheets of the average consumer via what we call the "credit purge phenomenon” to the new normal era of economic stagnation.

I am concerned about the baby boomers' generation at 10,000+ per day retiring and reducing their conspicuous consumption patterns and slowing consumption based economic rate even further. What should government do? Let the markets work and stop all the intervention programs and markets and economy will adjust on their own terms. Stop all the crazy trillion dollar deficit spending programs that have not worked. Let the markets clear naturally, and recover on its own terms/conditions. Pain to the economy will be quick, but it will recover faster. Stop the bail outs and "too big to fail programs" for banks.

Finally, considering however you see world energy usage and dependency on it, specifically in the West's reliance on Middle Eastern Oil, how necessary would you say are alternative energy sources? And with these alternatives, how would you recommend these changes be introduced so that the shifting from oil to different sources isn't more jarring than it has to be for the world's interconnected economies?

JO: We will become the "Saudi Arabia of natural gas" with our knowledge and existing deposits and horizontal drilling technologies if USA finally develops an Energy Policy based on common sense not special interest politics. I expect we will soon become net exporters of this abundant clean energy via existing global CNG and LNG markets. We need to develop and use our natural gas resources industry especially for bulk transportation fuel for fleets of trucks, buses, even rail and to fuel electric utilities and replace dirty fuel like coal. We need state and federal incentives for private sector for producers, pipelines for efficient distribution, and users of natural gas to convert from foreign oil. Keep majority that $700 billion dollars in fuel costs at home. We consume via imports lots of our oil from Canada and Mexico, not Saudi Arabia. The USA natural gas industry can create hundreds of thousands of new high paying job and replace Saudi oil, but we have to put in the work.

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