The “Missing” Inflation Shows Up as Hyper-inflation

In things that rich people buy.

Ever since the financial crisis, there has been a lot of screaming about inflation. Screaming that it should show up, with all the money being created by central banks and, privately, and isn’t.

But it is.

A painting of Christ by the Renaissance master Leonardo da Vinci sold for a record $450 million at auction on Wednesday, smashing previous records for artworks sold at auction or privately.

New York, London, and Vancouver real estate, along with a number of other cities (China’s printing more money than anyone else), is also where it showing up.

And it’s showing up for ordinary people, not as hyper-inflation, but as high inflation of some things. Whatever the figures show, anyone who buys food knows that food prices have been going up faster than normal wages for quite some time.

But mostly it is showing up at the top end, in things that rich people bid up. $450 million is damn near half a billion, the ability to blow that amount of money on a single painting is absolutely crazy, no matter who the painting is by. It could not have happened even 20 years ago, and did not happen even ten years ago.

The rich are floating on an ocean of money, and they have nothing to spend it on that really matters, so it’s going to third homes, real estate, speculation and conspicuous luxury consumption (which is what that painting is).

As an aside, one of the ways to deal with off-shore tax haven money is for the major economies to not allow it back into their countries without high taxation. It’s great that you have a few billion in an offshore haven, but you can’t spend it there. If you want to bring it back or use it as collateral then just make them pay taxes on it. 90 percent is a good rate.

What, they won’t bring it home at that tax level? Then fuck’em. You can’t buy anything that matters in most tax havens, and no one wants to live there. Let it rot, uselessly, there.

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