When Will The Art Bubble Burst?

An economic bubble is trade in high volumes at prices that are considerably above the intrinsic value of the product or service in question. In other words an economic bubble is the exchange of products or assets at inflated prices. Some of the more notorious economic bubbles in recent years have been in assorted property markets – with crashes in the value of property occurring from 2005 onwards in various markets around the world. The US property bubble in particular – and the sub-prime mortgages tied to it – sparked the current financial crisis and could also be said to have burst the banking and financial industries bubble.

Fearing that stocks and bonds are too volatile some investors have diversified into collectibles that range from old master paintings to expensive wines by way of rare coins and stamps. In a capitalist economy there is no safe investment – speculative investment works on the basis that what goes up must come down. Blue-chip art is currently over-valued and will deflate at some point – the question is simply when…

And while you’re at it don’t forget to check – www.stewarthomesociety.org – you know it makes (no) sense!