Jamie Dimon is worried the US economy is headed back to the 1970s

JPMorgan Chase (JPM) CEO Jamie Dimon is concerned the US economy could be in for a repeat of the problems that hampered the country during the 1970s.

"Yes, I think there’s a chance that can happen again," he said during an appearance Tuesday at the Economic Club of New York.

The economy in that troubled decade was constrained by stagflation, a combination of low growth and high inflation, and Dimon said such a risk exists again.

"I worry that it looks more like the seventies than we've seen before," he added during a question-and-answer session with Marie-Josee Kravis, chair of the Museum of Modern Art and wife of KKR co-founder Henry Kravis.

"There are circumstances in which it'll look more like the seventies than what we've had for the last 20 years."

Dimon returned to some other familiar subjects during his discussion Tuesday, from his concerns about large amounts of government spending and efforts by the Fed to shrink its balance sheet as well as the ongoing wars in the Middle East and Ukraine and their potential to disrupt essential commodities markets, migration, and geopolitical relationships.

I remember in 1981 I opened a Money Market account at Buffalo Savings Bank. They gave me my pick of small appliances. I think I got a Sony Clock radio. It lasted forever because it was Made in Japan. I eventually gave that radio to my son. He used it through high school and college.

In some states like Idaho they would give you a gun for opening a bank account back then.

The interest rate on that money market was 15%. Merrill Lynch money market account was 18% at the time.

Good data points.

Every season there is a new crop of hopefuls that think they are going to get rich on a home. Houses are traditionally a bad investment. After taxes, insurance, interest, repairs and the cost of selling against the fact that they usually only go up with inflation, they are a loss or breakeven for the most part. The world is not kalifornia. Kalifornia isn't even kalifornia sometimes.

I tell people who ask what I think about houses to buy a house to live in. Buy one you are comfortable with and in and can afford and enjoy it. When the time comes, let it go and move on. I also admonish youngsters to live comfortably but live below their absolute means. Twenty years on, after I gave that advice to my children and their peer group I am glad to report that I have all happy customers.

Some people do get lucky with houses, they buy at the right time and sell at the right time. This seldom happens. Real estate is different than a house. Speculative real estate can make money. Just ask Trump. It can also lose a lot of money, just ask Trump.

The last big nice home I owned I had for 21 years. After fees, upgrades and repairs to sell I netted less than double what it cost me to build and NOT including some substantial improvements. I made less than 3% a year. That is not a good investment but it was a beautiful home and we enjoyed it while we owned it.

Usually the only ones who lose money in a correction are the ones that panic and the ones that are leveraged and get caught in the squeeze. Don't be those guys. If you are brilliant, like I'm not you can read the tea leaves, cash out at the high and wait for the fall to buy back in at just the right time. It seldom happens that way though. Instead, you can have a reserve, keep your powder dry and wait for a recovery. Traditionally recoveries have taken 3 years or so. We are now, in MOD terms, not real, not inflation adjusted back to even with before the last crash. We have a long way to go to recover this terrible inflation with $Real gains. Equities are supposed to keep up with inflation but they aren't so far.

Even a tulip craze can end.

I'd rather spend time in the shop making mistakes and cutting big pieces into little ones.

I am in my third house. The first one I previously described.
Bought in 1990, sold in 1995. Total investment $140. sold for $127.

Second house I paid $175. Lived there for 17 years. Biggest mistake was replacing the in ground pool with a gunite in ground pool $30K. Sold the house for $260. In that 17 years it went up, then pulled back. I sold when we started coming out of the pull back because we wanted a house with more land.

I bought the current house for $270 because it had 12 acres.
It was built in 1972. I have redone every room in the house.
Plus, logged the property. Three times I have had excavators on the property regrading, removing stumps, boulders, drainage issues, etc. Probably $15K in excavation.
Planted grass, fruit trees, bushes, bulbs, gravel driveways. Built a pavillion with a hot tub under. Upgraded electrical.
Sanded floors. The property is probably worth $650-700 now.
However, I need to replace the 150’ driveway. Probably $20K.
The roof will need to be replaced soon $8-10K.

It is endless. I do most of the interior and a lot of exterior work myself. The biggest issue now is my lawn and field takes about two hours to mow with a 42” JD rider. Which is 25 years old.
I am looking at buying a commercial zero turn. The issue is that a real commercial mower made by Scag or Exmark is over $11K-17K. It is more expensive than my first four cars. Even my first brand new Toyota truck was under $9K in 1988.

I have been trying to convince Mrs Woodbutcher for a couple years now to retire to Italy.

Here are a couple listings that are available right now in southern Italy. These are not the 1EU homes that need $20-150K in repairs in some little hill top town. These are right on the Med and would be millions in the southern US.

https://www.idealista.it/en/immobile/23222924/

https://www.idealista.it/en/immobile/25447945/

In my world travels I became to believe there is only one place you can live like an American. I also thought that was superior. At this stage I would not trade my lifestyle for another but I do not believe any longer that it is the best way to live, just another one that is different. You can probably live like a happy Italian just as well as you can to be a happy American, perhaps happier if you are leaving things that bother you behind.

Those are beautiful and accommodating a different lifestyle but not a bad one.

“I’m watching the market for this too. Whats your gut feeling on how long before the bottom hits?”

My gut feelings are useless. I’m heavy in short-term Treasury Bills and holding mostly scattered income/dividend and some commodity/energy positions otherwise. Next buys will be adding to BRK.B and VOO positions when I feel like upping stock positions. I have an offer coming in on some raw land. I’m watching land in a different state with water rights if the first deal happens. Home builders look good but I haven’t moved on them yet. The housing shortage isn’t going away anytime soon.

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