THE PAN ASIAN GOLD EXCHANGE:: A TRUE GAME CHANGER

China is getting ready to challenge the hegemony/monopoly of the London Metals exchange and COMEX in New York: The Pan Asia Gold exchange (PAGE) is set to open in June 2012, and after that things might never be the same again.

Six major Chinese banks will fix the gold price every morning at 8am their time, - in direct competition to the four bullion banks that fix the gold price twice a day in london.  The huge difference is that the 6 Chinese bullion banks in concert with the Chinese Central Bank will hold 100 percent of their gold contracts in PHYSICAL GOLD, while the four Western bullion banks hold  less than 10 percent of outstanding contracts ion PHYSICAL GOLD. 

Which means that as of June 2012 the world could now turn to China to get its price for Gold.

Each Chinese contract will represent 10 ounces of Gold; that is the size of the PAGE contract currently. Individuals who purchase contracts on PAGE will receive a 90-day International Spot Contract and actual title to the gold; it will not be some worthless futures contract or an unsecured note from a bullion bank/international banking institution.

Why is this a big deal?

1. PAGE will for the first time allow individuals to trade futures contracts that are fully backed by Gold. These contracts are not going to be the paper type future contracts that trade on the London and New York Gold exchange that are backed by less than 10 percent in physical gold. 
   
   Every ounce of gold purchased on PAGE will be delivered.  Therefor this will put enormous pressure on Western Comex style paper manipulation of the gold price.  In fact we might have two competing prices - one with full price discovery in China, and one with opaque paper manipulation in the USA and London
   
   The Western Gold Exchange is largely based on and settled in paper and is traded in dollars.  The Pan Asian Gold Exchange will be100 percent based on and settled in bullion gold will be traded in Yuan.       
   
   This means that Yuan and not US dollars will for the first time become the dominant currency used in one of the most speculative commodity markets. 
   
   THIS WILL BE A MAJOR STEP IN THE CHINESE STRATEGY TO DISLODGE THE DOLLAR AS THE WORLD'S RESERVE CURRENCY. 
   
   Initially, these contracts will only be available to the Agricultural bank of China’s 320 million customers. If just 2% of their customers bought one contract, it would equate to 2,000 tons of physical gold being drawn down (taken out of the markets). This is a massive development on its own, but soon these contracts will be open to the world.
   

To REPEAT:

COMEX has only enough Gold to cover 10% of the total contracts traded. In other words, for every 100 ounces of paper gold, there is only 10% in real gold backing them. Some other analysts such as Eric Sprott claim that if individuals took delivery of just 5% of the traded contracts it would be enough to deplete COMEX of its entire inventory.

With the advent of the Pan Asian Gold Exchange there where every contract is 100 percent backed by physical gold - how long will it be before the United States loses its ability to control the price of gold - and support the value of the US dollar?