Pug, if you had taken the time to read the information about the new exchange you would see that the PAA futures contracts will be backed on a one to one basis by real gold. In contrast COMEX and LBMA operate on fractional reserve bullion banking where futures contracts are only backed 1/100th real gold. Thus the demand from the Pan Asian Exchange will increasingly call on delivery of gold from COMEX and LBMA. The operators of the new exchange have spotted a perfect arbitrage opportunity where real price discovery will be forced onto COMEX and LBMA for the first time in years.
Undoubtedly the US will then complain bitterly about China artificially forcing the price of gold through the roof (bringing the western banking sytem to its knees). Dont be suprised to see those propagating the truth about the gold price manipulation being brought under pressure. For example the fake charges, 'terrorist' label and prison sentance that Von Nothaus recieved this year, courtesy of the greatest democracy on earth! .
