Arbitrage

Arbitrage.

Harry looked at the two goblins on his doorstep, they were wearing pinstripe suits of the kind that were popular in the City of London. One was carrying a set of scales, the other a large cellular telephone, almost as big as its arm. The contrast would have been comical if not for the grimly serious expressions on their faces.

“Mr Harry James Potter-Evans-Verres?” The first goblin said. “We are here as representatives of the Magical-Muggle financial ombudsman, as duly authorised by the relevant acts in the House of Commons and Ministry of Magic, of 1989 and 1990 respectively. We have been made aware of some irregularities in your accounts. May we come in?”

“Ummm, that’s me.” Harry replied. “My parents aren’t here, could you come back later?”

“Regrettably this cannot wait.” The Goblin replied, expression unchanging. “While we would prefer to enter with your permission and proceed with this discussion politely, we are authorised to insist if necessary.”

Harry swallowed, and unable to think of a better option, gestured for them to come inside.
.
"Need to stall. Need to stall." He thought to himself "Come up with a plan. I can’t let them intimidate me and control the conversation. Isn’t that what they always say in police procedurals? They are coming here with a plan. I don’t. Need to gather more information, need to see if I can get help."

It had all seemed like such a good idea at the time….

_________________________________________

Two weeks ago he had visited diagon alley, and had his first glimpse into the wizarding world. That was when he had come up with The Plan.

He had a vault full of gold, which was all his. (Minus the minor issue of interfering Hogwarts teachers.) He quickly did the mental calculation that this amount was roughly equal to the British governments gold reserves. Add that to the observation that these lumps of pure precious metals were apparently being casually traded for books and small items, leading to the swift conclusion that there must be a total disconnection between the wizarding and muggle economies for this to be possible. The next step was obvious arbitrage the hell out of it

There were a few practical problems that needed to be overcome. Finding diagon alley again was a simple enough matter of walking around the approximate area of London until he saw oddly dressed people emerging from a pub that was mysteriously ignored by the general public.

Not being able to directly access his vault turned out to be less of an issue than expected, Being  the boy who lived apparently meant that the rules were more like guidelines for you.

Dealing with things on the muggle side was, surprisingly, harder. Apparently, few people are willing to exchange gold for cash with a 12 year old. But once he found a pawnshop willing to look the other way in return for a sob story about family fleeing south Africa, and a ridiculously unbalanced exchange rate, he was good to go. His parents didn’t even raise an eye at his argument that he need his own bank account under his direct control in case there were any “weird magic problems” and he couldn’t reach them.

After a week’s work he had a tidy profit and was quite pleased with himself. That was until the Goblins came to his door.

____________________________________________

In the next half hour he learned a number of interesting things.

Apparently, the legal framework against disrupting the muggle economy was old and well tested, with interactions carefully regulated by Gringotts and the ministry. The goblins maintained their calm and professional tone throughout, but he thought he detected a note of sarcasm when they pointed out to him that he was not the first person to have thought of the idea, given the number of muggle born customers at Gringotts. Though he was apparently one of the “youngest and most brazen” they had encountered this century.

They also made it clear that ignorance of the law was no excuse. And that if he wished to devise any similarly “creative” financial schemes (he definitely caught some sarcasm at that point) he would be well advised to take up the services of one of Gringotts reasonably priced financial advisors.

The one saving-grace was that as a minor he would not be subject to the Goblin’s usual violent and creative methods of punishing financial crimes. This meeting was apparently a courtesy to inform him of the immediate freezing of accounts, both muggle and magical, that would be happening to him and his extended family. Further punishment would be a the end of a extensive and time consuming legal process.