Excessive fiat money printing + negligible bond yields = asset price inflation. Just weeks after the most expensive painting ever, The Scream, sold at auction for $120mm and 6 months after the most expensive comic, Superman #1, sold for $2.16mm, the most richly priced piece of sports memorabilia sold for $4.4mm over the weekend. It was a circa 1920 Babe Ruth original game used jersey. The price exceeded the previous sports high in 2010 of the original rules of basketball written by James Naismith and the $2.8mm paid for the T206 Honus Wagner 5 years back. Whether its gold, comic books, baseball cards, paintings or diamonds, the global debasement of paper money drives a more fervent demand for hard assets.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Excessive money printing + negligible bond yields = Babe Ruth”

  1. Disinfectant says:

    Huh…all of the buyers must be democrats, because we know that wealthy Republicans don’t piss away their wealth like this. They’re too busy creating new jobs. Right?

  2. Brookwood says:

    Hard assets…like comic books.

  3. DeDude says:

    You are really really desperate to prove your ideological position if you have to go to “rich pigs pigging it”, to prove that printing money creates inflation. Have you considered reading Krugman to understand why it doesn’t do so in certain situations even though it does in other situations?

  4. JesseLivermore says:

    Or it could be the accumulation of absurdly disproportionate wealth among the top 0.001%. They really do have more money, so there’s a lot more competition for the one-of-a-kind status symbols that they buy.

  5. gusgus says:

    Echoing Jesse here — the “asset” price inflation you’re reporting is not a system of a broader inflation, but rather a byproduct of the broken system of wealth distribution which has channeled almost all the gains of the recovery to the top 1% (and top 0.1% with that group).

  6. Disinfectant says:

    But again, that concentration of wealth is supposed to be fabulous for all of us because of the virtually unlimited amount of hiring done by these “job creators”. I can only assume the true intent for these purchases is to hire more security guards to keep them safe, thus benefiting everyone in the economy.

  7. sherparick says:

    Peter, I see you have gone full Austrian here. Even as Gold, oil, and other commodities start to crash as the Chinese discover what the U.S. did in the 1920s and Japan in the 1990s, that when you produce more goods then you can consume, and loan money to foreigners to buy your surplus, it all comes to a very sorry end in a balance sheet recession/depression, you still exclaim about the double secret inflation in “assets,” pointing to the “inflation in the art market.” Meanwhile U.S. real labor costs continue to falls, and demand contractions across the world exert downward pressure both on finished goods and on the labor that makes them. In his world, cash, or its equivalent, is the most valuable thing.

    Meanwhile, there may be inflation in luxury goods and art since with so much money being firehosed into the elite .1%, they bid up the prices on items that aren’t being made anymore (such as estates in the Hampton and Edvard Muench’s “the Scream,” Muench now being dead over a 100 years the 4 versions that exist are not likely to be added too).

    You don’t need to be a Keynsian Democratic Socialist like me to see your obsession with tight money and bringing back high interest rates will end badly. See http://uneasymoney.com/ , in particular:
    http://uneasymoney.com/2012/05/14/inflation-expectations-are-falling-run-for-cover/

  8. Hurricaner says:

    jesse and gusgus – couldn’t have said it better.

    in a global crash…I don’t think a comic book or baseball jersey will be good currency to trade for some meat and potatoes…but I do think the absurd prices paid for those items is very indicative of how lopsided the world’s wealth is. Not saying we should sieze it and redistribute it to those in need…but it does get to the point of sickening to see these obscene gestures of wealth flaunted in our faces day in and day out. Like the two 23-year old daughters of the Formula One racing guy…buying $150MM in real estate…which wouldn’t be bad if it weren’t only two friggin’ houses!!!!!