While the financial world is taking refuge in gold and bitcoin to protect itself from inflation, JPMorgan is going in the opposite direction and choosing to hoard cash.
This was stated by CEO Jamie Dimon during a conference. As reported by CNBC, Dimon is leading the financial institution to accumulate cash rather than Treasury bonds or other types of investments, because he believes inflation will lead the Fed to raise interest rates.
Jamie Dimon stated:
“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”.
His strategy is clear:
“If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,” Dimon said. “I do expect to see higher rates and more inflation, and we’re prepared for that”.
The inflation debate in the US
In the US, after the Federal Reserve’s injection of liquidity, there have been fears about inflation risks. Everyone is reacting as they see fit. JPMorgan apparently prefers to keep its cash.
Other large companies prefer to hoard gold and bitcoin.
It remains to be seen how the Fed will react to the risk of rising inflation. The possibility of higher interest rates had already shocked the markets.
JPMorgan and cash better than bitcoin
Jamie Dimon is not a fan of BItcoin. This explains why his bank is preferring to accumulate cash rather than resorting to other solutions, such as the accumulation of bitcoin.
Nevertheless, though a special fund, JPMorgan is starting to offer bitcoin to its clients. This is because, as the CEO explained, he may be hostile to bitcoin, but apparently JPMorgan’s customers like it. It is peculiar though that he does not think of Bitcoin as a defence against inflation. Probably the high volatility continues to be no guarantee of safety for the US bank.