Prices for Damien Hirst, Andy Warhol Artworks Are Laughable

Is the art market a leading indicator of this Global Bubble? Or a lagging one?

We don't know. We watch it for amusement, not for trading signals. And next week, another big art auction should set off giggles.

Would you like to spend millions for a big picture of a dollar sign? How about a big, telescoping geometric pattern? Well, then, get out your wallet, dear reader, because next week both Sotheby's and Christie's are set to make history - competing auctions will tell us not only how big bonuses in the financial industry have become, but how batty buyers in the art market can be.

Damien Hirst has a steel cabinet with 6,000 painted pills in it. He calls it Lullaby Spring. Don't miss that one, dear reader. It's expected to fetch US$8 million. Bacon, Freud - all of the hustlers of the art world will be on display. And it's too bad Andy Warhol is dead. Wouldn't he get a laugh out of seeing his portraits of Marilyn Monroe go on the block! His three prints of Marilyn - cleverly entitled "Three Marilyns" - are expected to bring in US$14 million.

It is merely laughable that someone would judge this kind of stuff so highly. But it is intriguing that they judge it so much more valuable than it was a few years ago. The inflation in contemporary art is breathtaking; it illustrates how nouveau and how riche the nouveau riche really are.

Indians, Russians, Chinese - not to mention Americans and Englishmen - they are all throwing their money around like people who just got rich...and got rich so easily they don't know the value of it. What to make of it?

Cash and credit is incredibly easy to come by, we conclude. There's so much of it around, people seem desperate to get rid of it.

We have a suggestion for them. Just hold on. A credit expansion is always followed by a credit contraction. And this credit expansion has led to the world's first, and biggest, planetary bubble.

When it corrects, it will be the world's first, and biggest, planetary bust. So keep your eyes on our Crash Alert flag, dear reader. We may be early. But we won't be wrong.

Bill Bonner
The Daily Reckoning Australia

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