JP Morgan Starts to Believe in Gold

goingbroke

Gold hasn't reinvented itself as a currency yet. But it is getting closer.

J.P. Morgan Chase & Co. (NYSE: JPM) said it will allow clients to use the metal as collateral in some transactions. For example, a hedge fund wanting to borrow money for a short period can put up gold as collateral and use the borrowings to invest elsewhere, betting on making a better return. Typically, banks accept only Treasury bonds and stocks in such agreements.

By making the announcement, J.P. Morgan is effectively saying gold is as rock solid an investment as triple-A rated Treasurys, adding to a movement that places gold at the top tier of asset classes. To wax explicit, if JPM has finally gotten around to seeing the virtues of Gold collateral based trading, it will be in their interest to see it holds its value. If you haven't gotten on the Gold train yet, you might want to consider it.



JPM is demonstrating its belief in Gold as an asset class.

roadrunner

The company's namesake, J.P. Morgan, stated in 1912 that "Gold is money and nothing else." He believed in it from day one. J.P. knew what paper money was all about and hence the push to get the FED instituted. In December 1913 he finally succeeded.

The central banks storing a published 31,000 tons of gold for decades certainly indicates they agreed with J.P. Morgan's 1912 comment.

The real reason for this is to help cover the gold shortages and short plays all around the world. The banks have gotten themselves into a real mess. The easier access they have to physical gold, the easier it is to shuffle it around and keep appearances up. The creation of the ETF GLD played right into this same concept. The bankers knew they weren't going to be able to keep gold down. But the next best thing is knowing where all the gold is and having access to it.

roadrunner

OPA

A Money Center Pawn Shop....."We'll lend you up to 50% of the value of your collateral." JPM is just catching up with what other money lenders have been doing for decades...

57loaded

"The real reason for this is to help cover the gold shortages and short plays all around the world. The banks have gotten themselves into a real mess. The easier access they have to physical gold, the easier it is to shuffle it around and keeps appearances up. The creation of the ETF GLD played right into this same concept. The bankers knew they weren't going to be able to keep gold down. But the next best thing is knowing where all the gold is and having access to it."

well stated

OPA

<< <i>"The real reason for this is to help cover the gold shortages and short plays all around the world. The banks have gotten themselves into a real mess. The easier access they have to physical gold, the easier it is to shuffle it around and keeps appearances up. The creation of the ETF GLD played right into this same concept. The bankers knew they weren't going to be able to keep gold down. But the next best thing is knowing where all the gold is and having access to it."

well stated >>



If your "conspiracy theory" holds true, this should create a snowball affect with the rest of the banks in your above comment. Only time will tell if they follow JPM "secured lending" model.

1201reset

Is that a bunny tumbling down the ski slope or a snowball?

_Reset

linky

Gold Bullion Considered as Collateral by International Clearing House – LCH.Clearnet

A further sign of how gold bullion is increasingly seen as not only a safe haven asset and a currency but also a financial asset, is news that the LCH.Clearnet is giving further consideration to a plan to accept gold bullion as collateral. They may accept gold bullion as collateral against margin positions on a range of asset classes and derivatives in the international financial markets.

LCH.Clearnet have been considering allowing gold as collateral since October 2009 and the move by the CME and JP Morgan to allow physical gold as collateral may have made their plans in this regard more concrete. "We’re looking at it closely,” David Farrar, LCH.Clearnet Director of Commodities told CNBC (see News). “It’s something that, subject to regulatory approval, we’d look to introduce later this year."