Monday, February 7, 2011

Out of the Ashes

This is how gold and silver will be commonly used in the future. Collateral for capital raising ventures. In a world of decreasing energy production and energy inputs into developed economies and shrinking GDP’s, a person’s “good will” (aka, credit score) will not suffice to get credit. You will not assets; eg, real estate, silver, gold, business, etc.

“Witness: the world changes before your very eyes, if you have eyes to see. What do you gaze upon as the old images fade into the ether? Do you grasp out in yearning and reach for a decaying world? Tears for the death of you as you are born anew?"
Author: 'Tis himself!

JPMorgan takes gold collateral, inflation in focus, LINK

LONDON | Mon Feb 7, 2011 9:42am EST

LONDON (Reuters) - J.P. Morgan Chase said on Monday it would accept physical gold as collateral with its counterparties as a growing number of clients look to use bullion as a hedge against inflation.

The bank, which is one of the custodians of physical metals for some of the world's largest precious-metal backed exchange-traded funds, said it would take gold as collateral to satisfy securities lending and repurchase obligations with counterparties.

"Many clients are holding gold on their balance sheets as an inflation hedge and are looking to make these assets work for them as collateral," said John Rivett, collateral management executive for J.P. Morgan Worldwide Securities Services.

"By combining our collateral management and vaulting capabilities, we provide clients with greater flexibility in how they mobilize collateral." The spot gold price, which has fallen by some 4 percent so far this year to around $1,350 an ounce, rose by 30 percent last year, in large part thanks to investors seeking protection against rising inflation pressures in both developed and emerging economies.

JPMorgan, which owns vaulting facilities for storing precious metals around the world, said the initiative would allow its clients to mobilize collateral across borders and trading activities, "regardless of the underlying obligation, to extract maximum value and manage risk," it said.
(Reporting by Amanda Cooper; Editing by Jason Neely)

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