Art and Wealth

This morning I ran across an article about Sotheby’s recent auction in Hong Kong. It sold half of the previous auction due to investor fears of the economy. Okay, so that’s not a surprise. What is interesting is the remark made by an economist talking about this story on his blog. To quote Mish, “Anyone who proposes that art is a store of value in this environment is either a fool or talking their book.”

As an example of talking their book, take this statement from the article
“Buyers are looking for value,” said Tian Kai, a Beijing- based art dealer who flew in to attend the auction. “Governments are printing so much money now. Fine artworks might be a better way to store value than currency.”

Mish has a point. Most art fails as an investment during economic depressions. In difficult times, the monetary value drops precipitously, particularly with contemporary art.

On the other hand, for those with wealth and power, building and maintaining that wealth is a relative thing. While not gold or silver, art holds a measure of recognized value in our cultural consciousness. Beyond monetary value, art plays an important role in our lives. It connects us to the past. Through art we learn about the thoughts and feelings of others.

I can experience boundless wealth while enjoying a lovely painting in my living room.

Since I haven't figured out how to do hotlinks on blogspot yet, here they are:
Sotheby article-http://www.bloomberg.com/apps/news?pid=20601088&sid=aJp6xS3eDiNM&refer=culture
Mish's blog-http://www.globaleconomicanalysis.blogspot.com/