J.P. Morgan Now Accepting Gold As Collateral

Granted that J.P. Morgan isn't very well liked in goldbug land, but it did make a move that brings gold a little closer to being used as money. Since gold as inflation hedge has become more and more popular, the bank is bending with the new wind by allowing its client to put up gold as collateral for repos and securities lending.

"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 mobilise collateral."

Of course, J.P. Morgan's been widely criticized for the ways it's been deploying its trading capital - but it isn't as thick as a brick with respect to the increasing popularity of gold.