[Olog-hai]

Try again. They won’t be able to get that strategic exchange back. You don’t sell out to fanatics.

[agere_contra]

Oh noes! How will people sell metals to each other without using that exchange?

The reason people use the LME is that it is efficient, cheap, fair and robust - and it has a good timezone.

If it stays that way then no-one has lost anything, and the Chinese will make a profit - in 125 years.

If it stops being that way then it becomes vulnerable to competition - and a new LME will arise.

[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."

[Cronos]

as ac (who lives in Britain btw) said, “If the Chinese frack up the LME, traders can use or set up other exchanges.”