Jamie Dimon just went on record with a very strange statement. It's one thing for a person in Mr. Dimon's position to declare that an asset of some kind is currently in a bubble. Benefiting from bubbles (and their eventual collapse) is how people in his "profession" make their money. It's just simple market timing to call something a value or a bubble.
But Dimon went a big step further and called bitcoin a "fraud" that will eventually blow up. He then compared bitcoin to tulips of tulip mania fame. Tulips were a bubble, not a fraud. So he thinks bitcoin is worse than tulip mania.
I have just two things to say about that:
1) I think he will turn out to be correct even though I think his motivation for panning the currency is that he is secretly afraid of it. After all, he is not part of it, not in control of it, does not have insiders in it like he does the US dollar and other sovereign currencies. He's afraid that it could get really big before it eventually blows up into tulipmania collapse.
2) Mr. Dimon does not say what qualities of bitcoin make it a "fraud" but I dare say that it is, in fact, a bit less fraudulent than the US dollar or any other fake paper money. Why? Well, for several reasons. First, only a finite number of bitcoins can be created. Second, someone has to do new work to create new bit coins out of the total possible. It's called mining and it requires investment in computers and software. What this means is that it cannot be created on a whim in order to solve some problem de jour at the expense of all participants for the benefit of those at the top who get the credit for having done some good. In other words, it cannot be used to privatize gains and socialize losses. Additionally, there is no fractional reserve lending system tied to bitcoin (yet). In other words, special entities cannot create temporary new bitcoins from thin air and loan them out for interest.
The US dollar and other fake paper fiat currencies suffer from all of these deficiencies. If bitcoins were backed by gold it would be a fine currency. But neither it nor the dollar nor any government currency is real money because none are backed by any kind of valued commodity. The US nickel is about the only real money in circulation that I know of because for some strange reason it is still made of nickel and copper instead of being nickel plated pot metal.
In any case, everything that Jamie Dimon said would eventually happen to bitcoin will also happen to all fake paper money because there is no real difference between them because the only difference that counts is whether the currency can be exchanged for a fixed and known quantity of a thing of known value upon demand.
Neither the US dollar nor bitcoin are any better than tulips and Mr Dimon knows it damn well. He says what he said because he is a shameless liar who will be very lucky to avoid being strung up in the streets when the dollar Ponzi collapses.
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