Thursday May 16 2019
I e mailed my friends at the Socionomics Institute about a record art sale. They were already writing about it!
Monet Monet Monet, must be funny, in a rich man’s world
A new record art sale comes right on cue.
Last night, at a private auction in New York, someone paid $110,700,000 for a painting. The 1890 work by the French artist Claude Monet set a new record selling price for an impressionist painting. It is from Monet’s “Les Meules à Giverny” series, often referred to as “haystacks”, which is famous for the way in which Monet repeated the same subject to show the differing light and atmosphere at different times of day, across the seasons and in many types of weather. There was an intense four-minute duel between the final two bidders before the hammer came down. The identity of the new owner is unknown.
This news comes at an appropriate time because, as EWI and the Socionomics Institute have been writing about for decades, record art sales tend to coincide with stock market tops. Excess money appears after a boom and that excess finds its way into unproductive use, such as art. It’s not a trading system, of course, but when such largesse manifests, it is a clue that the credit cycle could be peaking. The chart below shows a smorgasbord of examples in relation to the Dow Jones Industrial Average.
To compare apples with apples, Wikipedia shows a list of the 93 most expensive paintings adjusted for inflation. Incredibly, out of the top 15, 12 have set their price at auction since 2011, the era of quantitative easing and easy money. The other 3 in the top 15 set their price at auction in 2006, just as the bubble in credit and real estate was peaking, and the financial crisis was brewing. The amazing plethora of inflation-adjusted record art sales over the past few years is a sign that this top in the credit cycle is set to be of biblical proportions. In coming years, we’re confident that finding a buyer willing to pay a record sum for a work of art will be like looking for a needle in a haystack.
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