Do You Trust What JP Morgan CEO Says About Bitcoin?
By Joe Jarvis - September 13, 2017

JP Morgan CEO Jamie Dimon commented that he thinks Bitcoin is a fraud, and that “it will eventually be closed.”

CNBC continues its amazing economic news coverage with his interview.

Yes, the CEO of a major financial institution thinks Bitcoin will be “closed.”

Look, however unlikely, it is possible that the Bitcoin price goes to $0. It is not, however, anywhere within the realm of possibilities that the crypto-currency will be “closed” as Dimon put it.

This is because there is nothing to close. It is not a business. It is not owned by anyone except a vast and disunited network of Bitcoin miners and those who own Bitcoins.

So again, miners could conceivably shut off their computers. People who hold Bitcoin could conceivably sell off at such a rate that the price crumbles. But no one can “close” the cryptocurrency.

If you listen to his complete remarks, what he seems to mean is that governments will crack down on Bitcoin when it becomes too popular.

“Wait until someone gets hurt, or wait until it is used for illicit purposes–which it is somewhat used for illicit purposes–[governments] will close it down.”

Governments can shut businesses down, but they cannot shut Bitcoin down. It is too decentralized. They can make it illegal to buy, sell, or trade, Bitcoin, like China did. And yes, that had an impact on the price. But that is not the same as shutting it down.

That is shutting it down in the same sense that the U.S. government shut down liquor sales during prohibition. They didn’t. But they did increase corruption, give rise to organized crime, and allow some people to get rich off the black market for alcohol.

So why listen to this guy? Because he is the CEO of JP Morgan? So he has had some success in trading and manipulating fiat currency. Should we believe him that Bitcoin is a “novelty”?

History has some hilarious examples that show we should take these predictions with a grain of salt.

1903: “The horse is here to stay but the automobile is only a novelty – a fad.” — President of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Company.

But even a broken clock is right twice a day. Dimon correctly sees the benefit of crypto-currencies for people living under oppressive governments. The Daily Bell has previously reported on a Bitcoin funded escape from Venezuela.

“If you were in Venezuela or Equador or North Korea you’re better off probably using Bitcoin than using their currency. That can’t possibly be true in the United States, unless you’re speculating. And that isn’t a reason to say something has value. Because other people are gonna speculate. That’s tulip.

What he’s referring to is the Tulip Mania. Prices for the bulbs of the newly introduced flower skyrocketed in the Netherlands in 1636. Everyone wanted to get in on the rising prices, and rampant speculation sent the price even higher. But then the price collapsed, because people weren’t buying tulips for the flowers, they were only buying tulips for the speculative potential.

There is some element of truth to this for Bitcoin today. In many cases, people are buying the crypto-currency not to invest long term, nor as a hedge, nor as an actual medium of exchange. It’s the promise of making a few quick bucks due to the price fluctuation.

The difference is that some people actually are using Bitcoin as a medium of exchange. As Dimon points out, some of this commerce is illicit. But that should only lend more credence to the fact the currency is useful. As long as governments will push certain things onto black markets, there will be an incentive to use an alternative to their currencies as well.

Some people thought that cars had little practical application, and that the internet was basically a useless toy. In the early stages, they were right, but they couldn’t see the future potential.

Dimon went on to say “[Bitcoin] is just not a real thing, and eventually, it will be the emperor with no clothes.”

But what then is the U.S. dollar? What is the entire banking industry which Dimon and JP Morgan represent?

This is what is so aggravating about people who are always trying to save us from ourselves. He says the government would shut Bitcoin down when someone gets hurt, like they are going to protect the consumer from shady financial transactions.

JP Morgan received a government bailout after participating in shady loans and being reckless with deposits. The U.S. dollar is the biggest scam in currency, propped up only by its acceptance and U.S. might.

Talk about an emperor with no clothes! The whole financial system could collapse if one kid yells, “He’s naked!”

And that is when Bitcoin would be quite the asset to hold.

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  • Ephraiyim

    This is a good example of what has been termed Normalcy Bias.

  • Dimitri Ledkovsky

    Dimon must be fondly making the comparison to when the “gold window” was “closed”. In a sense gold was criminalized. It became verboten. Dimon is most probably wishing the same on Bitcoin. Cryptos, I believe, have already been criminalized for some specific transactions in Russia. Could the US follow suit? Both Dimon and the Powers That Be in the USA are, after all, doing God’s work. This work then should include the criminalization of anything that stands in the way of God’s Plan.

  • Personally I think Dimon is right but if plenty people will buy and sell Monopoly money at any cost, why not? It is just a game, isn’t it?

  • Clayton Smith

    What we have here is the fact of legal tender laws at work. On the fiat dollar is lawful in the discharge of debts, etc. All other barter-able goods are in one way or another capital goods. The IRS has already ruled on Bitcoins status as a capital asset, subject to tax on its increase in value. This opens the door to prosecuting bitcoin transactions on the basis of their original basis. Withholding information as to the basis would be, as in gold sales, a crime. This puts bitcoin owners at a special risk, given the hazy chain of custody of the bitcoins currently in their possession. They could find themselves with an assumed zero basis and subject to a flat 28 percent collectables tax. His comments about moving money across borders is very interesting, however. This is where much of the current interest in crypto currencies may be arising from. But, who would want to exchange into a failing currency from abroad? The only buyers that come to my mind is the intelligence agencies. Given the likely close association of JP Morgan with them provides much food for thought concerning the role bitcoin and others like it might end up playing as tools for the continued foreign policy adventurism of the USG.

  • davidnrobyn

    Michael Krieger has a great article on this issue. Check it out.

  • sebastian puettmann

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  • sebastian puettmann

    By the way, guys.

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  • Here is a man who’s afraid his livelihood will go away along with the power of the banking system, maybe he’s the mouthpiece for bigger fish? At 20T in debt, we could go over the cliff anytime with no bottom to stop it. Drag the whole world with it. Loss of faith in the American $, really it is just faith money, you believe it will buy something, else why have it? So something challenges that belief system and ‘Danger Will Robinson!’ someone has to open their mouth, (and maybe more) and the short straw went to him. In my opinion.

  • jacob

    Bitcoin, Ethereum, and other cryptocurrencies are important, They enable 1) escape from the current fiat system that taxes people without their consent through inflation which dilutes the value of their currency, 2 ) anonymous transactions, 3) anonymous preservation of wealth, 3) worldwide portability and convenience, 4) instant zero cost settlement of financial transactions, 5) tax avoidance provided users avoid converting to or from fiat money, 6) zero inflation due to strict limit in the amount of cryptocurrency in existence. Very impressive, and very dangerous. The criminal government/financial psychopaths, who didn’t hesitate to kill Sadaam Hussein and Muamar Gaddafi to prevent them from freeing their countries from the international fiat monetary system will most certainly attempt to paralyze and/or destroy that which would destroy them if left unchecked. Cryptocurrencies are a great invention and have the moral high ground. So what ? The psychos in charge don’t care about that.

    • JohnnyZ

      Good points, but several open questions remain:
      1. Can they be cracked down upon authorities? Probably yes. They can already demand / steal the codes for the wallets
      2. Isn’t Bitcoin just the controlled opposition, secretly launched by the authorities themselves? It could very well be, there are some doubts about the background of the Bitcoin initial programmer; it is a way to push the digitalization of currency / ban cash
      3. As a store of value there are several issues, e.g.: a) it can easily be seen as a tulip mania type of bubble currently; b) its rules can be changed to a degree – e.g. see recent split; c) almost “anyone” can start a competing currency; d) it has no inherent value, just a convenience value

      • jacob

        Great observations. Question #2 is sinister if true. It’s difficult getting used to the new reality of corrupt currencies worldwide. The US Dollar hasn’t been backed by anything since 1971. Likewise with Bitcoin, although the theoretical limit to its maximum aggregate is in its favor, Who ever thought the day would come when people everywhere distrust their currencies? Leaders everywhere have sold their people out. Legalized robbery (and murder) is the new reality. Morality is dead.

        • dauden

          Hope is alive in Christ…..sorry, had to pick up your spirits 🙂

        • JohnnyZ

          Another point that many do not understand is that fiat is nowadays not a major way a “currency” is debased. Before QE started, 95% of US money supply was provided by fractional reserve lending, which is a form of legalized counterfeiting and this has been the case in the world more or less since the Renaissance. Even after the Fed printed $3tr during QE, this is only a fraction of the $13.7tr M2 money supply. Fiat today serves to mainly support the banking system and allow government largess (which is used to borrow from banks or for crony spending)

    • max naegele

      I think cryptocurrency is the future even though I am not convinced by it so if I would have some money flying about 2 play with I would definetely go out n play!

  • bouf

    Dimon is buying the dips!

  • SnakePlissken

    Banksters HATE how Bitcoin is threatening their monopoly on fraud. They are putting a lot of pressure on the gubmint to shut down Bitcoin. They’re using the justification of terrorism or illicit activities even though the banks have been caught red handed laundering money for terrorists, dictators, drug traffickers, etc, etc.

    • alohajim

      Banksters don’t put pressure on governments. They OWN governments. It’s a mistake to think of banks, governments, and corporations as discreet and separate entities – the correct analogy is a three headed hydra. Same owners, same goals, different roles.

  • Bischoff

    I agree with Dimon, BitCoin is a farce……..but so is the QE FRN currency……..
    I agree with old J.P. Morgan when asked by the congressional Pujo Commission in 1911 what is “Money”….???, he said “Gold is Money and nothing else.”
    Money is not the same as currency, though it can be used as currency. Gold hasn’t been an effective currency since the Middle Ages.
    What gives value to gold is human exertion in mining and refining it. What gives value to BitCoin….??? How do you mine BitCoin……???
    The human exertion expended, both physical and mental exertion, in mining and refining a specific amount of gold (.205 ounces of gold 92% fine established by Congress to be One U.S. Dollar with the NBA of 1792, changed by NBA of 1935) is used as a standard to measure the expenditure of human exertion in producing goods and services.
    How is BitCoin a measure of value…..??? It is not. It is merely a currency (medium of exchange) based on the “Quantity of Money” Theory.
    Gold has physical and chemical characteristics which makes it suitable for saving over extended periods of time without deterioration (loss of value).
    Where are the physical and chemical characteristics of BitCoin…..??? How does BitCoin maintain its value…..??? Don’t tell me by “Supply and Demand”……because that is the QMT and it has nothing to do with “storing” human exertion.
    Gold can be used to create redeemable notes (Bank Notes) under the “Real Bills Doctrine” (RBD) set forth by Adam Smith. Redeemable currency has existed in North America and the United States from 1750 until 1933. With the confiscation of the gold savings of the American people by FDR, the Bills of Exchange market, which discovers the discount rate in effect for banks and investors to acquire these 90-day maturity instruments, was instantly killed by FDR’s action with all the attending problems effecting the labor market.
    Who in his right mind would discount a “Bill of Exchange” for BitCoin….???
    With this explanation, I hope I have supported my statement that Dimon has a point in poo-pooing BitCoin.

    • Bischoff, Hi,

      You say farce, others realise it a new force delivered by greater intelligence than current fiat money systems and the QE FRN currency possess. And now those systems are forced into fighting a rear guard action against virtually overwhelming odds to try and survive in charge and leading events into the future.

      The future however has other plans for such moribund petrified systems of remote virtual enslavement to contrived debt promotions … and there’s nothing effective either current present or past grand masters at Great Games Play can do about that …… although fantastic payment to Future Grand Masters, in any fiat currency imagined to be strong and markets leading, will always have the potential to Great Game Changing.

      • Bischoff

        I have had the privilege of responding to your comments in the past, but I do remember that I had to have your comments translated to me first. Here again, I find myself in need of translation regarding your latest comment. If there is someone out there who could interpret your comments to me, I would be utterly grateful.

        • The short transubstantiation, Bischoff, is ……

          The traditional historic banking system thinks that its shenanigans command and control things. They don’t any more. However, that is not to say that they can’t pay to play with future banking leaderships starring in a core spectator role.

          I trust that presents the see as clearly as needs be for understanding, although I do accept that common mutual agreement is altogether a quite different matter.

        • max naegele

          I feel u!

    • TiredOfThisShit

      It is Bitcoin, not BitCoin – at least write it correctly. Bitcoin is money. There is non-zero chance you might understand this in a decade – but I wouldn’t hold my breath.

      • Bischoff

        Hello Daniel Webster… much research have you done into the origin of the word “BitCoin……I bet not much.

      • Bischoff

        BitCoin maybe “Money” in your world, and good for you……

  • Remus

    “Do You Trust What JP Morgan CEO Says About Bitcoin?”

    No, I don’t take anything he says at face value.

    The FRNs were a giant fraud from the getgo, but they have been traded for a century. Who says a digital-fiat currency could not do the same?

    • Jose Cuervo

      There is a significant difference between Bitcoin and FRNs. Bitcoin is limited to 21 million bitcoins. There is no limit on FRNs, especially since the final link between FRNs and actual physical resources was eliminated in 1971 by Nixon. Certainly investing in Bitcoin right now is a risky behavior because of the speculative nature of bitcoin mining, but if it ever catches on as a medium of exchange, think of the potential for protecting one’s privacy. Right now, very few online business accept bitcoin, but just as traditional banks are essentially obsolete (and frankly, have always been corrupt) bitcoin and other cryptocurrencies have the potential to act as a very positive phenomenon indeed.

  • MetaCynic

    Bitcoin could be a medium of exchange, but with its price jumping all over the place short term, how can it function as a store of value which is an important attribute of money? I can buy bitcoin today with the intention of spending it next year, but it’s already demonstrated that next year it could lose a considerable amount of its purchasing power. Six months later, it could regain that loss and then some, but that would do me no good!

    Since its inception, Bitcoin is behaving more as a speculative investment. Its value as such today is derived mostly from anonymous black market and tax evasion transactions. And it’s not clear that Bitcoin transactions are as anonymous as we are led to believe. If that’s so, then what other use can prop up its value?

  • alohajim

    Dimon’s right and no offense DB, but DB is wrong. “Bitcoin would be quite the asset to hold” (if the financial system collapsed). Sorry. Bitcoin’s ‘value’ is 100% dependent on the fraudulent worldwide fiat currency system. When fiat currencies fail no one will accept crypto’s for anything of tangible value anywhere.

    The story of Bitcoin is cartoonish, like our news, history books, and government/academia sponsored meme’s. Believable only if one suspends disbelief. Points to ponder :

    1. ‘created’ by a mysterious, anonymous, Japanese computer programmer. Named Mr. Satoshi. Anonymous, but they know his name? Right. Sounds like Satori, no?
    2. ‘only’ 21 million ‘coins’ ‘created’. Uh huh, except for the forks (free money folks!), and the ‘other’ crypto currencies currently strictly limited in supply (infinity).
    3. ‘store of value’ ‘investment’ and ‘means of exchange’ do not apply to a ephemeral trading vehicle that goes up and down in price like a giant yo-yo.
    4. Why is Bitcoin represented pictorially as a gold coin? It’s the precise opposite of a coin and only exists as binary digits – computer code on digital media.
    5. Bankers, through their control of governments worldwide and via the corporations they own, have achieved complete control of our world and all markets. Knowing this how can anyone think that Bitcoin is out of their control and somehow a threat to their entire system? Perceived threats are eliminated and erased from history usually before we even hear of them.

  • Bruce C.

    I think the whole “bitcoin” subject fascinating but I have to admit I don’t fully understand it, and when I say that I don’t just mean that I don’t understand the explanations of what ARE addressed but what are NOT addressed as well.

    The whole subject of money and currency and financial systems are so vast that it’s hard to even discuss it.

    I’ll start with impressions and intuitions I’ve had since it “began” around 2010. First of all, those who promoted or supported it always seemed very myopic about certain almost personal issues concerning money. They resented the lack of privacy of conventional transactions, for example, or disliked the transaction costs incurred using electronic transfers. Those were two of my big “red lights” in terms of popular appeal – which ultimately is what will make or break crypto-currencies in general, i.e., their demand and acceptance. The vast majority of people I know don’t give a hoot about either of those issues. To them there are costs for just about everything and so the trouble to switch from “dollars” to something as abstract as “bitcoin” doesn’t seem worth the trouble and risk (perhaps a new or discovered risk – “ignorance”).

    It isn’t long before one runs into all kinds of other basic questions that I have yet to see addressed, such as how Bitcoin, et al can work in the ordinary ways taken for granted today. Would there be no cash, for example? If so then that alone is a non-starter for most people – and I don’t just mean Americans, never mind the rest of the planet’s population. Would there be no fractional reserve banking at all? How would loans and lending work then? And if the theoretical limit to the amount of Bitcoins that can be “mined” is fixed (at a relatively low number like around 21 million, I recall) then how does price deflation not become impractical and literally uneconomic? In fact, would not the “knowledge” of inevitable price inflation of Bitcoin inhibit its use as a currency? (I know personally I would rather pay for things in fiat currency (i.e., dollars) than my gold or silver.)

    Considering another POV completely, the popularity, use, and “integrity” (believe it or not) of FRNs (aka US dollars) is higher today than ever, for the simple if not diabolical reason that most people, countries, entities have and use them. What that means is essentially no one on the planet wants US dollars to lose value because that would impoverish themselves. It’s a bizarre and ironic situation but it’s sort of like the safety and security created by the deterrence of “mutually assured destruction.” I just think there are so many vested interests in the status quo that switching over to a crypto-currency is not going to happen. Bitcoin, et al may seem moral and elegant and liberating, but – let’s face it – most of the world doesn’t seem to give a damn about those things, and I’m including the “hoi polloi,” not just the PTB “elites.” Incredibly, freedom and liberty seem to be a tough sell to most populations, so why would the advantages of something like Bitcoin be so desirable to most?

    Clearly, I still have far more questions and confusion about cryptocurrencies and Bitcoin than answers and understanding.

  • Aristaeus

    Currencies are either static or dynamic.

    A static currency, like one ounce of pure silver, is a standard like an acre of land. One knows what they own when they get it and can use it.

    Dynamic currencies, like paper, or electronic currencies, fluctuate in value based on unnatural variables. Ownership of a dynamic currency is gambling. One never knows for sure what they get. Dynamic currencies are useless until they are traded for something useful. Dynamic currencies are not standard. Standards must be static.

    • concerndcitizen

      Nothing in the world is static. More gold is found and lost every day. More people are born every day. Anything “static” has a counterparty risk, including gold. Everything can be manipulated.

      • Aristaeus

        Static simply means it cannot be changed.
        How is it possible to manipulate an ounce of .999 pure silver?
        An ounce is an ounce and .999 pure silver is .999 pure silver.
        An ounce of pure silver is static.

        • concerndcitizen

          Yes, that bar of silver is the same. What you can exchange it for changes all the time.