Inflation HyZ1teria No.2

Never attribute to malice that which is adequately explained by stupidity. In our specific case here, never attribute to deviousness what is plainly incompetent Economists. Jamie Dimon, the CEO of JP Morgan, though he works atop one of the world’s biggest banking money dealers he got there by being a trained Economist. To bring this home, in March 2008, just as his bank was being asked to “rescue” Bear Stearns, Dimon was named to the Federal Reserve Bank of New York’s nine-member board of directors.

He apparently fit right in.

Central bankers are Economists nowadays, having always before been at least familiar with banking itself. In many cases, there aren’t even bankers running banks. The sorry state of the world should really start to make sense given only this information.

Thus, when in May 2018 Dimon proclaimed his hatred for US Treasury securities it was typical Economist-speak. JPM’s CEO went on BloombergTV and unequivocally declared BOND ROUT!!!! with all his might; just as any FRBNY official would have wanted and Jay Powell certainly had. The 10-year UST, Mr. Dimon said, was heading toward 4% – and that was just the start.

Except, obviously, interest rates which had nowhere to go but up according to Economists like Dimon ended up going down. Again. A lot. Undaunted, by May 2019, Dimon remained adamant about Treasury securities. A supposedly “weak” 10s auction apparently demonstrated the fragility of demand for these cursed instruments, the rout undoubtedly just around the corner.

Not a chance; the bid remained steady anyway as anyone, such as a bank CEO, who watched the auctions could see. Who kept buying up these things? The answer was, of course, JP Morgan.

So, had Dimon been duplicitous? Nah. He’s just an Economist and bureaucrat behaving exactly like an Economist and bureaucrat would. Incompetence. The man can run a complex banking organization, but that doesn’t mean he really knows what, why, or how it does the things it does.

Like hysterias over inflation that isn’t coming, some things never change:

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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