Nifty secret bank system

[Bill Stewart]

At 03:25 PM 10/03/2001 -0700, Steve Schear wrote:
>At 06:30 PM 10/3/2001 +0100, CDR Anonymizer wrote:
>>http://archives.nytimes.com/2001/10/03/international/03LAUN.html
>>
>>lo-tech, trust-based, stable and fully functional since antiquity. I like 
>>it :-)
>
>You'll notice the cost of money transfers using this private system
>are well below international bank wires.
>If governments want to reduce/eliminate this "illicit" competition
>they should fully underwrite the cost of international wires below
>a certain threshold (say $10,000).

This system accomplishes two main things - moving money securely,
and working around government interference with money transfers,
particularly India's restrictions on their non-convertible rupee.

It's approximately the same system that the Italians ran
so successfully during the Middle Ages - have offices in
multiple cities in Italy and Spain, and there's enough traffic
in different directions that the deposits and withdrawals
in each city are mostly balanced, so the risky and expensive
job of shipping gold and silver between cities only needs to be done
on the net differences, not on the much larger gross,
and depending on the level of trust between the different parties,
you can float for quite a while and more easily absorb the
occasional loss to pirates or shipwreck.

This market's a bit more directional, perhaps, but it's dealing
with cultures that have been doing lots of trading for millenia,
and understand the value of repeat business, so it can adapt to
the current needs, and adjusts prices to reflect the costs of
moving the net transfers and the current risk value of trust.