High Prices or High Hopes?

Thursday, May 13, 2021

Well, that was more or less expected: We have seen record prices in several auctions, lately and this is to our understanding just the beginning of the asset-rotation that moves the money from the financial system with all its flaws, corruptions, quantitative easing, zero interest rates and manipulations -- to most extend, not by its public participants but the bureaucrats in central banks and politics -- to tangible assets, that miss the direct nexus to these manipulated parameters and esp a liabilities side.

So, often these days you can read: The world has gone crazy and buyers acting stupid paying exploded prices -- a single Patek for several million CHF or a Monet painting for more than CHF60mio, Basquiat for more than CHF40mio and Banksy for CHF12mio. But no, we cannot disagree more. The participant is acting perfectly rationale and reacting in the only way that makes sense in this environment: money isn't a scarcity and intuitively everyone feels it is worth less and less. And so, it is not a question of money or price for many such tangible assets but whether they are existent and available or not.

And this is the point: You cannot see risen price levels for such unique or scarce objects, but a decreased value of money that elevates the prices of all asset classes sooner or later -- simply spoken: inflation. And all else would be a surprise but not this, given the extensive manipulative practice of politics and central bank bureaucrats for more than twenty years now.

See our post expecting this, here.

And there.