"If you borrow money to buy bitcoin, you're a fool" - Jamie Dimon
(Kitco News) JPMorgan CEO Jamie Dimon won't start caring about bitcoin even if its price rises by ten times in the next five years.
"I don't really care about bitcoin. I think people waste too much time and breath on it," Dimon told the Times of India in an interview. "I am not a buyer of bitcoin. I think if you borrow money to buy bitcoin, you're a fool. That does not mean it can't go ten times in price in the next five years. But I don't care about that."
Dimon also pointed out that market participants should not be surprised by the amount of speculation happening at the moment, especially in the crypto space.
"I remember when beanie babies were selling for $2,000 a pop. We all know about tulip bulbs. We all know about internet stocks. Speculation happens in every market around the world, including in communist countries. So, I don't know why there is a surprise with a lot of speculation, particularly when there's as much liquidity in the system," he said.
On top of the speculation aspect, bitcoin has regulations to worry about, Dimon added.
"It is going to be regulated. Governments regulate just about everything. I don't know if it's an asset. I don't know if it's foreign exchange. I don't know if it's a currency. I don't know if it's the securities laws, but they're going to do it. And that will constrain it to some extent. But whether it eliminates it, I have no idea and I don't personally care," he commented.
The advice Dimon follows is to be good at what you are interested in. "I learned a long time ago figure out what you want, do what you want and be successful yourself," he said.
On the U.S. economy, Dimon sounded quite optimistic, estimating for growth to be around 5-6% for the rest of the year.
"The table is set rather well; consumers are in very good shape, they have a lot of extra cash, they have paid down debt. Usually, when debt gets paid down, it's a sign of a recession. This is more a sign of the pump being primed," he noted. "The spend today is 20% over what it was pre-Covid. Travel is coming back up, albeit slower. Even if they spend at this level, confidence is going up equally."
With many investors starting to worry about a potential U.S. government shutdown if the debt ceiling is not raised in time, Dimon sounded pretty calm.
"The debt ceiling — we've had this before. It's irresponsible on our part to even get close to it. No one assumes there will be a default. If we did, that would be bad, but I think they'll get over that," he said.
The big geopolitical risk going forward is China, according to Dimon. But he doesn't see this particular risk impacting the economic realm all that much.
"There are always risks, but people sometimes overestimate the risk just like sometimes they underestimate them. Geopolitics has always been a risk. The biggest geopolitical risk today is China. But that won't necessarily derail the economy. And while we are coming out of the Delta variant, if you have another deadly variant, all bets are off on that one. So, hopefully, that won't happen," he stated. "China's growth has slowed. But the real issue with China is people got to look a little bit more long-term, and they do a pretty good job managing their economy."
Inflation remains a legitimate concern, especially with the massive amounts of quantitative easing and fiscal stimulus that global economies have seen this year, JPMorgan CEO added. But for him, the antidote is growth.
"They are powerful drugs into the system and drive growth in slightly different ways. We need growth. Growth is the antidote for everything. Inflation is probably a transitory piece. It is currently 3.5% or 4% and as they start to taper, you'll read about it. It'll be November, December, January, based upon the Delta variant. But if that happens, and inflation goes up, long rates will go to 3% or 3.5% over the next 18 months or so, we'll be fine. Growth is far more important than that inflationary number or bond rates going up," he explained.