How gold goes from Western paper to Eastern physical

We posted an open letter to the WGC from Eric Sprott yesterday reconciling real global supply and demand numbers that is worth reading.  In another investigation he links the remarkable outflows of gold from ETF’s and Comex (largely out of London vaults) to the refineries in Switzerland and then to, you guessed it, China via the Shanghai Exchange in Hong Kong.  In the year to August, UK gold exports to Switzerland jumped to 1016t from 85t over the same 8 month period in 2012, nearly an 1100% increase.  The 2 largest exporters of gold to Hong Kong were the US and…. Switzerland.  They then outline that the Shanghai Exchange will deliver 2600t (annualising the 1730t to August).  The total estimate world gold production (excluding China who keep all theirs) is 2,260t.  That leaves a production deficit of 340t before supplying the rest of SE Asia, India and the rest of the world!  Any unbiased assessment of this must seriously question the sustainability of these low prices.