Comment by JumpCrisscross
4 hours ago
> They didn't physically ship any of it, they sold it and rebought in Europe
This is effectively outsourcing that process to the banks.
4 hours ago
> They didn't physically ship any of it, they sold it and rebought in Europe
This is effectively outsourcing that process to the banks.
Banks can keep it in US and stay happy, they don't necessarily immediately need physical gold. So it's quite efficient, lots of govts do similar stuff.
> Banks can keep it in US and stay happy
If the Banque de France holds physical in New York and sells it to JPMorgan (nothing moves) and then in Paris buys contract for physical from UBS, there will probably need to be physical gold that moves.
In all likelihood, Swiss gold held by e.g. a Gulf customer might be sold to Paris (nothing moves) and JPMorgan may entice Venezuela to take those contracts on its balance sheet (nothing moves). But if it’s a big trade, the price of delivering physical in Paris (or Genève) will go above spot in New York at which point it’s profitable for JPMorgan to take delivery, load up planes and physically ship gold.
To supplement this, there was an interesting situation in 2025 [0] where a financial signal developed and we saw physical gold flows from London to New York. A very similar mechanism; governments do something, price signal develops, gold starts flying around.
[0] https://www.usagold.com/gold-arbitrage-trade-winds-down-amid...
I imagine a convoy of small but heavily armored ships leaving New York, with nervous sailors clutching machine guns on the decks.
5 replies →
The Yapese people have been doing the same thing [1] for centuries.
[1] https://en.wikipedia.org/wiki/Rai_stones
It does amuse me greatly that major world powers are trading large piles of stones in a place without moving them just like that. That's deeply satisfying.
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