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Why did the largest American banker issue warnings of “preparing for the next economic hurricane”?, today, Saturday, June 11, 2022 10:29 pm
Published by Khalid bin Ali Al-Matrafi in Riyadh on 06-11 2022
Depression and economic downturn are inevitably coming to the world, and the degree of its effects will vary from one country to another, and it will last between two to four years, but it will be different from the great depression that occurred in the thirties of the twentieth century.
“Let’s prepare for the next economic hurricane, because of the Federal Reserve and the Russian-Ukrainian war,” with these words, Jimmy Dimon, Chairman of the Board of Directors of JPMorgan Chase, the largest of the four largest American banks, began his important article, which was published by the American network CNBC on the first of this June. Jimmy Dimon, the famous executive banker and chairman of JPMorgan Chase, the Big Four of America’s banks, and what gives the article technical importance is that Jamie Dimon previously served on the Federal Reserve Board of Governors, so the article’s map was a multipoint statement In view of the upcoming economic crisis due to the escalating global inflation rate.
The most important thing in the article, written by CNBC’s financial and banking correspondent, Heo Soon: There are two main factors that worry Dimon, the first is the quantitative tightening initiated by the Federal Reserve, which is a contractionary monetary policy that he applies to reduce the amount of liquidity within the economy, and the second The rise in commodity and oil prices due to the Russian-Ukrainian war,” adding that “oil may reach $150 or $175 a barrel.”
Here, I disagree with him that the price will not reach what he mentioned – in the event of the next recession – due to the decline in the economic movement, and its impact on the volume of energy demand, and Dimon stated that “inflation has reached its highest levels for decades; due to supply chain disruptions, and a pandemic.” Corona virus, to sow fear that the Federal Reserve will inadvertently push the economy into a recession, to combat high prices.”
Dimon explicitly called for “preparing and preparing ourselves for the next hurricane,” so he said, “We at our bank are going to be very conservative with our balance sheet, and advise investors to do the same.” “We didn’t have at the Fed like this because many aspects of the Fed’s quantitative easing programs backfired, including negative rates, which he called a “big mistake”,” Dimon said, a very unusual feature of the scale of the disaster. Not only that, but he pointed out in the article that history will be written regarding the Great Depression for the next fifty years, as people will forget the old history, and date the new! The long post-contract contract will change, noting that one out of every three American citizens owns a savings account, but in light of the expected recession, they will not be able to save, but will be satisfied with spending without saving, meaning that one person out of every three will save, what does this mean? The occurrence of a default among individuals in the payment of their residential rents, and this will result in a default in the payment of car loans, which is already happening, and these problems will gradually increase with the future repercussions of the upcoming recession crisis.
On (April 22, 2020) I wrote an article in Arabic entitled: “Corona… the straw that broke the back of the economy,” and its summary is that “depression and economic downturn are inevitably coming to the world, and the degree of its effects will vary from one country to another, and it will last between two to four years, But it will be different from the Great Depression that occurred in the thirties of the twentieth century, because the changes in our modern age are better than the conditions of that depression, due to the development of economic solutions and reliance on advanced technology. With huge cash reserves, and the diversification of its new economic sectors.. May you be well.
