How are large sums of money transferred between nations?

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Say country A sends some billions of dollars to country B in aid or in exchange for some resource. How does the actual transfer take place? How does the wealth of country A decrease and the wealth of country B increase?

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Anonymous 0 Comments

So. Aside from all the other answers, I think if you are thinking of aid to Ukraine, the answer is that most of that money does not get transferred. Ukraine’s central bank has an account at the US central bank and EU central bank, so the respective governments just deposit “money” (numbers… but number that have to be accounted for) into those accounts.

Now, of Ukraine wants to buy a box of bandaids or some hookers or maybe a missile system, they just charge it to that account.

This is one of the things that goes unmentioned in these deals. When the US provides aid, that aid predominantly needs to be spent IN the US. They can transfer that money elsewhere, but the bulk of it will be spent in the US, and the US will tax the people that got those orders, and their subcontractors, etc.

US military spending is a welfare program just as much as actual welfare. Arguably more effective even.

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