[Larry - Moe and Curly]

Look, I may be way off base here because I'm not, by any stretch of the imagination, a financial guy. But, this purchase of LME looks like just one more step in China's plan to replace the Dollar as the world's reserve currency with a gold-backed Yuan.

An interesting article in Money Morning back in November 2011, makes this seem a little more plausible than just some stupid Chinese paying too much money for something that won't see return for 124 years.

http://moneymorning.com/2011/11/22/china-changing-global-gold-market/

"While many investors have been distracted by the goings on in Europe, China has been making a dent in the global gold market by making it easier for investors to buy and invest in the yellow metal.

The goal: To dominate the global gold market and carve out a new role for its currency, the yuan. "

[snip]

"China is pushing gold because it wants the government and citizens to build financial reserves in assets stronger than the U.S. dollar, euro, and other weakening currencies. It also increases China's role in the precious metals market.

But there's another effect of this push for gold ownership: it's dislodging the dollar as the world's main reserve currency."

[Olog-hai]

They would love for that to happen, but they know that nobody is going to accept a communist currency as a world reserve currency—unless of course their twisted dream of turning the whole world communist happens (or a significant chunk of the world, which would mean communist control of the vast majority of resources, but that will never happen). So far, their horse in terms of reserve currency remain the euro, for all its problems. They are definitely dedicated to knocking the dollar of its perch.