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Ronan Manly: Gold is no one's liability, the asset no one can print, freeze, or default on
By Ronan Manly
Bullion Star, Singapore
Monday, September 28, 2026
The modern financial system is built on an assumption so deeply accepted that it is rarely tested: that the institutions and infrastructure standing behind financial assets will remain trustworthy.
That assumption holds only in a world where the institutions holding the financial system together act the same way today and tomorrow as they acted yesterday.
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While the system tells you that banks will honour deposits, governments will repay bonds, central banks will preserve the value of their currencies, payment systems will stay open, and that the international financial infrastructure will remain politically neutral, these are not facts. They are behaviours, and behaviours can change.
When confidence is high, this assumption is almost invisible, and financial claims are traded without anyone asking what stands behind them. But when institutional trust begins to weaken, the distinction between an asset and a claim on an asset becomes much more important.
Because a bank deposit is not cash held by the depositor. It is a liability of the bank. A bond is a contractual claim on a borrower. A reserve balance held through a foreign financial system may be an asset on a central bank's balance sheet, but it can also be frozen, sanctioned, or made inaccessible.
That distinction was made real in February 2022 when a coordinated move by the United States, the EU, UK, Canada, and Japan, immobilised roughly $300 billion of the Russian central bank's foreign exchange reserves, split between $207 billion in euro assets, $67 billion in US dollars and $37 billion in sterling, with the largest single concentration at Euroclear in Belgium. Several Russian banks were also removed from SWIFT. The only major Russian reserves to escape the freeze were those held as renminbi in China, or as physical gold in Russian vaults.
But the episode did not affect Russia alone. It also shattered the global financial system's illusion of trust. As Zoltan Pozsar observed, "what had previously been thought of as risk-free became risk-free no more as non-existent credit risk was instantly substituted for very real confiscation risk."
While renminbi reserves escaped for geopolitical reasons (they were beyond the reach of Western sanctions), physical gold escaped for structural reasons, because there was no entity to enforce it against. That's because gold is not issued by a government, central bank, or corporation, and so physical gold is not somebody else's promise to pay. It has no maturity date, no debtor and no requirement that another institution remain solvent. Nor has physical gold any counterparty risk, because it has no counterparty.
That makes gold more than an inflation hedge. It makes gold a neutral asset in a world where trust in institutions, currencies and geopolitical arrangements is becoming increasingly less certain. ...
... For the remainder of the commentary:
https://www.bullionstar.com/blogs/ronan-manly/gold-is-no-ones-liability/
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