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How are "foreign reserves" held by governments?
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[QUOTE="Office_Shredder, post: 6834849, member: 53426"] I guess there are a couple options. The mega banks (ubs, credit suisse, maybe others?) Have us entities that are able to deposit dollars at the fed. I assume they take advantage of that, though I'm not sure what the rules are about passing assets around between your Swiss and US legal entities. You can also preserve your dollars in any other way you want. Deposit in a US bank account, sounds reasonable. Stash it in a vault, sure I guess that could work. Buy short term treasuries, I think is probably a popular way to hold "dollars". (You still have the question of how custody of treasuries works so I haven't really explained anything here) I think the more important thing is, when people say the money in your bank account is just a number on a spreadsheet, that is both technically true and also missing one of the largest engineering problems of humanity. The fact that all these financial institutions are able to relatively seamlessly transact electronically while actually making sure all the dollars are actually accounted for is a huge infrastructure that took a long time to develop. [/QUOTE]
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How are "foreign reserves" held by governments?
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