Wednesday, October 10, 2012

Dimon Warns: The U.S. Bond Market WILL Crash

He says it is not a possibility but virtually assured. It's just a matter of time.

As he goes on in the interview, which occurred at an event held in Washington D.C. by the Council on Foreign Relations, he seems to suggest that there is some possibility that Washington could stop the out of control spending, but that's as likely as Alan Dershowitz getting his house featured in Architectural Digest.

The Jamie Dimon interview video is here.

(ht Alex Mullins)


  1. I has to, as I have been saying in these comments for close to a year now. Interest rates cannot stay below the rate of inflation forever. But when bond yields rise, bond prices go down, and they are likely to take some hefty financial institutions with them. Good luck creating inflation when big banks are failing. Bernanke may need those helicopters after all. Who knows how it will all play out. It won't be pleasant. Hopefully, it won't take the dollar down with it. But I think it's too late for Simpson-Bowles or even more serious austerity.

    Obama and Romney are auditioning for the role of Herbert Hoover.

    1. Obama already is Hoover (isn't the H in BHO Hoover ;)?)

      Romney wants to be Roosevelt.

  2. Dimon knows the end game of the current policy:

    - inflationary depression
    - deflationary depression
    - hyperinflation followed by one of the two above

    All three are bad for the banks, but the third is the worst. The only "salvation" for Dimon and his buddies rests in a significant cut in government regulations and government expenditures - and not the Simpson-Bowles-in-ten years-I-promise-something cut.

    But this won't happen - the sacred cows of military and medicare stand in the way.

    So Dimon sees the future - he says maybe 2 years, maybe 5 years. Perhaps this is a clue to his planned retirement date.