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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I noticed that no answers so far have mentioned gold. The transactions can take place with ownership of x amount of gold that’s in a vault somewhere, usually in the state reserve, but it can be gold that they already own in someone else’s vault. X amount of gold is simply marked as belonging to the other country instead of outright handing it over. The gold usually doesn’t actually change hands and instead sits in the vault, but its ownership alone is suitable as a medium of exchange.
This doesn’t always have to be gold either. It can be other valuable items, or simply money itself.
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