Alex Alov

The West froze about $300 billion of Russia's money within days of the 2022 invasion, but it couldn't seize a single bar of the 2,300 tonnes of gold sitting in Russia's own vaults in Moscow. Every central bank on earth watched that happen. So when Jamie Dimon tells a country it was dumb to pull its gold out of New York, he's arguing against the biggest money lesson of the decade. And his argument is the same one that built the largest gold vault in the world. He said that country has three armies within 400 miles, while gold in America is protected by two oceans and the US military. In 1940 that was exactly right. When German troops landed in Norway on April 9, 1940, Norway's central bank started trucking 50 tonnes of gold out of Oslo that same day. It got to Britain by ship, then crossed the Atlantic in batches, split between the New York Fed and Ottawa. Belgium wasn't so lucky. The Belgians handed 198 tonnes to the Banque de France and asked for it to be sent to the United States. France shipped it to Dakar instead, Vichy turned it over to the Reichsbank, and Göring had the bars melted down. That's why the vault under 33 Liberty Street exists. It sits 80 feet down on Manhattan bedrock, and by 1973 it held more than 12,000 tonnes. Every country that put gold down there was betting the worst thing that could happen to it was a tank crossing the border. The vault holds about half that now, roughly 6,000 tonnes worth around $780 billion at today's price. And when you look at how central banks have lost reserves lately, tanks barely show up. Venezuela has been trying to get 31 tonnes out of the Bank of England since 2018. British courts spent years arguing over which Venezuelan government even owned it. Afghanistan had about $7 billion at the New York Fed, some of it gold, when Kabul fell in August 2021. The Fed froze it, and half of it eventually landed in a fund in Switzerland. Add Russia and that's three countries in about four years that lost access to money they'd parked abroad, and not one of them lost it to an army. So the gold is leaving, and the countries taking it aren't the ones you'd guess. France pulled its last 129 tonnes out of New York in January without shipping a single bar. It sold the old bars there, bought fresh ones in Europe, and booked a gain of roughly €12 billion along the way. The Dutch took about 78 tonnes out of New York this year. The share of central banks keeping gold at the New York Fed dropped from 17% to 14% in a single year, according to the World Gold Council. Try Dimon's 400-mile test on Amsterdam. Every army inside that circle belongs to a NATO ally, plus Switzerland. I doubt anyone at the Dutch central bank is losing sleep over the Belgian army. To be fair, he's got a point in the Gulf. Iraq's army walked out of Kuwait's central bank with 3,216 gold bars in 1990, and Kuwait only got them back after a war and a UN-supervised handover. No army is getting across the Atlantic to rob Manhattan, and Dimon's right about that. The scenario reserve managers plan for is a phone call to New York asking for their gold back, where somebody on the other end says no. On that call, the ocean is on the wrong side of you.