Those banknotes are worth something now because of the novelty value.
Posted on 06/15/2021 12:46:35 AM PDT by knighthawk
JPMorgan's longtime CEO Jamie Dimon says America's largest bank is currently 'stockpiling' cash because there's a 'very good chance' inflation is here to stay after being driven to its highest level in 13 years.
Dimon said on Monday that JPMorgan is not buying Treasuries or other investments because of the risk that surging inflation will see the Federal Reserve increase interest rates.
'We have a lot of cash and capability and we're going to be very patient, because I think you have a very good chance inflation will be more than transitory,' Dimon said during a Q&A at Morgan Stanley's US Financials Conference.
(Excerpt) Read more at dailymail.co.uk ...
One thing they haven’t brought up...with several states in deep debt status, companies and people leaving those states, and rising interest rates on the state’s loans...makes for a serious crisis problem. So you have to wonder how Illinois, NY and California handle this.
Is he dumb? If inflation is coming, don’t you want to be light on cash?
Biden 2024!
In inflationary times, you go hard assets. Metals and commodities.
I heard an economist state the reason to keep the dollar high is that it keeps commodity prices low.
If this so, by promoting the dollar they make commodities easier to buy for JP Morgan.
Those banknotes are worth something now because of the novelty value.
What is that?
“Investing” for a bank is giving a loan at x10 leverage as compared to the cash on hand. 2% rates return 20%, 5% return 50% Inflation and the fed reaction are the banks best friend if they have sold off their loans to other people, and the fed/central banks has bought everything in sight for the past decade. If a bank have loans at less than the inflation rate even with 99% of the traunch current, those are viewed as bank balance sheet negatives. Banker accountants assume prime rate + inflation as what can be made in the bussiness lending market, even though most corp lending (revolver) business is gone.
Fall 90% compared to what. Stocks go up tightly coupled with inflation. Next quarters cashflow is inflated dollars!
Unless they are overleveraged by the Feds buying up the stockmarket to drive prices up and you have the banks calling in all these loans that were used to buy sticks by stupid people.
Thank you.
A 5% reduction in purchasing power (by holding cash) is a heck of a lot better than a 50-90% reduction if stocks do indeed crater to those levels, as more than one credible macroeconomist is forecasting.
Equities are insanely over-valued (by at least 2X). Equities ALWAYS “reprice” - eventually. The only question is if eventually is near term or further out in this case.
5% devaluation of cash is also better than your average 6+ year duration bond which will lose at least SIX percent if rates go up 1%.
There have been plenty of periods throughout US history where markets drop and stay down for 10+ years. See...
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And, a Zimbabwean could say the same thing about $1,000 USD.
Is it still 10x?
Fractional reserve... I thought it might have been changed to 100x, or removed altogether.
It's being said that 25% of the money has been created in the last year.
bmp
Yeah, but a Zimbawean would wipe himself with a 100T ZD, but a 1k USD is worth at least $2k+
A NASARIAN would wipe himself with a $10k USD piece of fiat.
Yes.
There is no perfect protection from inflation other than purchasing hard assets. Banks can’t do that.
If inflation is rising…why stockpile cash? Inflation devalues cash.
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