Arbitrage in Bitcoin exchanges How efficient is the bitcoin market? I am confused after comparing buy prices in exchanges operating in different currencies.

For instance, I see that 1 BTC amounts to 347 USD at the moment at one exchange in the US. In an exchange 'Localbitcoins', the lowest buy price I can find is 437 AUD.

Now, at the current exchange rate, 347 USD ~= 393 AUD. It seems to me even with some exchange fees that might be imposed, one can earn arbitrage profit by simply going long in one market and shorting in another. I am sure this is not the case. Am I missing something?
To answer your question let me give you an example of what some people do in order to try and take advantage of market arbitrage with Bitcoin.

As you know, Bitstamp and BTC-E are two of the biggest exchanges that are trading Bitcoin. If you look at the BTC price on BTC-E you can see it is always lower than that of Bitstamp. 

If you were to go to Russia (or know somebody in russia that trades bitcoins locally) they go by the BTC-E price there. So, if you find a guy in Russia that can sell you coins at BTC-E price, if you are located in the US you can sell your coins here at Bitstamp's price. Same goes for Huobi (which is in china). 

In order for arbitrage to work you need to know people in different countries who can sell bitcoins locally for you at that market price.

So go out there and make those connections whether it be in the trollboxes, forums (bitcointalk) or other means.

Hope I helped.