The money-printing from the Federal Reserve is seeping into everything. From vintage cars to social media, the freshly created money has been funneled into a lot of areas of the economy, and the art market is certainly one of them.
A painting by the legendary artist Pablo Picasso is expected to smash auction records. The painting entitled “Les femmes d’Alger (Version “O”)” will be auctioned at Christie’s and many believe it will be sold for as much as $140 million. However, since Picasso’s artwork is in high demand, observers say it could exceed the initial estimate.
Today, the most expensive piece of art that has been sold at an auction is Francis Bacon’s “Three Studies of Lucian Freud.” This was auctioned off for $142 million in 2013, and it was estimated to be sold for $85 million.
“Les femmes d’Alger” has been auctioned before: in 1997, it fetched just over $30 million. It was painted in 1955 as an homage to Henri Matisse, his friend and rival, who died the previous year.
Indeed, the Picasso painting is at the center of the auction, but what is even more telling is the fact that approximately $2.5 billion worth of art is projected to be sold Monday at Christie’s.
Thanks to Bernane and Co., there is a bubble everywhere. The art market is just one of them. The easy money from the United States central bank is prompting the super-wealthy, particularly in Asia, the Middle East and Russia, to bid on these expensive works of art.
The trillions of dollars in the U.S. – not to mention the additional trillions of dollars from central banks worldwide – are still making their way into every corner of the economy and marketplace. We’re likely to see these bubbles form and grow for a longer period of time. Eventually, it’ll pop.
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