In an exclusive interview to CNBC-TV18, Jamie Dimon says that the Indian government is paving the way for long-term growth
Q: Your views on the North Korea nuclear threat and its implications on the globe.
Nuclear threat is the worst thing that is facing mankind and obviously, we hope that does not happen anywhere. It is not just here, it is around the world. So, there is a higher chance of something going wrong in the Korean Peninsula, it is slightly higher than it was before and I am hoping the experts of the world are doing all the right things to make that not come to fruition. But I do not think it is going to change my view of how we should go around the world and work with each other and grow our economies. It is just this terrible threat hanging out there.
Q: So you think the markets are right in not pricing anything? After all, the Asian markets have not fallen so much.
I would not price a crisis in North Korea nuclear war into the markets. I think that would be a mistake. I pointed out before; geopolitics is always a surprise, sometimes positive, sometimes negative. It always scares you when you read the paper in the morning, but in the history of mankind, it usually resolves itself. So I am not saying I am not prepared for a bad outcome, I am simply saying I would not expect a bad outcome.
Q: There are some market participants perhaps who are not suggesting that perhaps it is best to recognise that North Korea is a nuclear power - maybe that will be the more constructive way to approach. You have any thoughts on that?
I think it would be a mistake to allow a person who is like that to have a nuclear weapon. And remember, that nuclear weapon can reach Tokyo, Beijing, Shanghai, Manila, Seoul Korea and I think it is a scary concept. Most of the people who have nuclear weapons, they are responsible. He does not seem to be responsible. So no, I think that would be a mistake and it could lead to other problems. Like even when you shoot these missiles, it is over Japan. What if it landed in Tokyo by accident?
I just think those things can tend to have unexpected consequences that could be dire and we should be very careful about that. And also, I think China has a huge interest in him also not having nuclear weapons because if they are not part of the solution, you are going to have nuclear weapons, in my opinion, in Korea, you have nuclear weapons in Philippines, you have nuclear weapons in Japan, everyone will go nuclear if he stays nuclear and now you have a much bigger issue.
Q: Let us come to some measurable parameters. The Federal Open Market Committee (FOMC), the US Fed has stuck to its dot chart. Do you think they have done right with their latest move?
I think they are doing the right thing. Quantitative easing (QE), raising rates is not a big deal.
Q: But inflation has disappointed in the light of that.
I think inflation is a semi-artificial number. The economy is strong. I think it would be stronger if America did a lot of better policy, but the fact is unemployment is coming down, labour is working, wages are starting to go up. There is plenty of, in my view, slack in the system so the housing is in short supply, there are more things do and as long as they are raising rates or reducing QE in a strong environment, I do not think it is that big a deal. So I think they are doing the right thing to start this process.