JP Morgan Chase Head Warns of the Financial Hurricane He Helped Create
Jamie Dimon, the CEO of JP Morgan Chase, made headlines on May 31, after saying that a “hurricane” is about to hit the world economy as a result of rising oil prices and tightening monetary policy. Speaking to a Bernstein Strategic Decisions Conference, he admitted he had had to correct his previous estimates for the worse: “I said they’re storm clouds, they’re big storm clouds here. It’s a hurricane.”
He also warned of the “huge volatility” that could result from the Quantitative Tightening (QT) that the Federal Reserve is planning to implement, because they have no choice. There’s “so much liquidity in the system”, he said, that they need to remove some of it “to reduce home prices and stuff like that”.
Dimon’s warning reminds one of the murderer who calls an ambulance for the victim he has just shot dead. While his intention is to back the “no tapering” faction in the Fed, i.e., the faction pushing for a return to Quantitative Easing in September, he and his bank bear a large responsibility for the problem. In fact, the rising oil prices and tightening monetary policy he mentions are the result of decades of monetary expansion, negative interest rates and the largest speculative bubble in history, which JPMorgan was in the forefront of building.
During the tenures of Ben Bernanke, Janet Yellen and Jerome Powell at the helm of the Fed, the bank’s balance sheet exploded, going from $880 billion in May 2008 to $8.9 trillion in May 2022 – an increase of over 900% in just 14 years. Those open market operations were conducted by the New York Federal Reserve, which is owned by a few Wall Street megabanks, the largest shareowner being JPMorgan Chase, followed by Citigroup, Goldman Sachs, Morgan Stanley and the Bank of New York Mellon.
In other words, JP Morgan and the other megabanks, were distributing Fed money with their left hand, while pocketing it with their right. The Fed bailout was repeated after September 17, 2019, when the interbanking market froze again. From that point until the first quarter of 2020, according to Wallstreetonparade, “units of the megabank JPMorgan Chase tapped over $6 trillion in cumulative (term-adjusted) loans”.
While feeding the bubble that has brought us energy and food price inflation, Jamie Dimon presided over five criminal felony counts, all of which his bank admitted, while entering into an endless series of highly-suspect non-prosecution agreements and probation periods with the U.S. Department of Justice.
While the coming “hurricane” will hit families and producers with full force, Jamie Dimon has little to fear: at the end of January, JPMorgan Chase’s Board awarded its CEO a pay raise of 10% over 2020, bringing his total compensation to $34.5 million for 2021…