As Spirits Soar, Two Bubbles Worth Watching

Tyler Durden's picture

And now for something off the beaten path. As the title implies, while the rest of the world is transfixed on the usual bubble candidates in traditional asset classes, two of the bubbles currently brewing well beneath the radar are a second derivative on the uber-wealthy class in China and Hong Kong, which appears to have a very disproprionate impact on spending patterns for ultra luxury goods, in this case cognac and Swiss watches. Not only that, but investing in these up and coming bubbles has some useful externalities: one can drink cognac, while a Swiss watch can be melted into its constituent gold or platinum once the inevitable hyperinflation finally hits. Alternatively, as these are some of the most marginal products available, any changes in consumption patterns here will be the first indication that the Asian party is ending...

Source: Goldman

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Larry Dallas's picture

Asians have traditionally showed an insatiable thirst for luxury goods and bling bling.

Id rather see something that speaks of the average table earnings in Macau. Some of these whales are limitless. Some aren't.

Doña K's picture

Talking about Macau, my Japanese friends tell me that the banks are pushing loans (with newly printed money) with the proviso that they invest in foreign companies. No collateral needed, no personal guarantee. So two of them took these loans out and opened gift shops in Macau. I was told: Free money no risk. I guess Japan bets in exports by force win or lose. 

Dane Bramage's picture

Peak Opulence!  (I has it).   Now we just need to track dwarf giraffe and gold grape sales!  ;)




Maos Dog's picture

You can order your giraffe here:


I am still waiting for mine to arrive.

fonzannoon's picture

Today was whacky. I wonder if this treasury selloff has legs.

GovtMediaLiars's picture

It was an interesting day to be a market watcher. The last few years have been and I'd be a liar if I said I didn't love it.


Vampyroteuthis infernalis's picture

Dammit, my $350,000 salary won't afford this after my kids go to private school along with my fancy cars!

Fluffybunny's picture

Did you read how that one guy experienced Deep Paralyzing Fear of the thought of not being able to afford his $30,000 gold club membership?

Either way, funny how Finland only ever appears in alcohol (as above) and school shooting statistics.

Schmuck Raker's picture

The death of Kim Jung Il is a black swan?

Poor Grogman's picture

Trade-able items that you can carry on to an aircraft, hmmm.

mayhem_korner's picture



Just a thought...if you're bartering swiss watches and brandy, what kind of air travel you doin'?

arsenal009's picture

If u want to carry tradeable items on an aircraft, just put some gold coins with the rest of ur change.  When ur wallett passes through the metal detector, the security won't be able to tell the difference between the gold & ordinary coins.

Bobbyrib's picture

Living in Jersey, I'm sure they won't be able to tell gold from the modern day quarter at Newark International. /sarcasm.

superflyguy's picture

Actually the cool russian accented customs guy I spoke to when I was taking my gold out knew everything about all different kinds of bars and coins (even the face value of the coins!).


MrSteve's picture

This is terrible, wrong information. Security won't be able to tell the difference between gold and ordinary coins. BULLSHT! Those scanners read density at the atomic scale (note paper currency doesn't show) so your gold will be opaque (highly visible) to the scanners and trip an indicator, just like uranium would. If you are serious, try using some lead slugs mixed in with your quarters the next time you board a plane. The minders will closely check your change. Tell them you are a plumber with working pocket change! 

The best tradeable items are registered share certificates of blue chip stocks. (can you say bearer bond-like) You could have a registered 10,000 share certificate of DuPont in your pocket when you board the plane and no one would know nor would it trigger an alarm. Any broker would research your registered shares, verify your registration with the database, your ID with your passport and thumbprint and then buy the shares. All perfectly legal. VOILA, you are in Canada with a small fortune. Or do you want to go from Greece to Costa Rico? In any language, voila, you are here!

Milestones's picture

Have you actully used this tactic? I am interested in this as well as any other thoughts along these lines.                 Milestones

vato poco's picture

Not that I would ever do such a thing - because it would be **wrong** - but it has been suggested in print another way to move assets across borders invisibly involves high-value collector-grade stamps. But then, I read a lot of trashy novels.

MrSteve's picture

The sale premium added into a Swiss watch of whatever high cost will not fund a getaway from an Asian contagion- only gold will do that, or diamonds. What if the heavy watch is just a knock-off, a sad joke gone full circle? Go gold or stay at home. There is no alternative. Nobody ever fled the evil empire wearing Phillip Patek. Give us a break, this analysis is so weak.



You mean to tell us to flee with registered share certificates, so we can sell, say, 1000 shares of IBM to any registered broker anywhere in the world, for the local currency? That's a great way to move money anytime you move, with no ringing metal detectors.

Poor Grogman's picture

"Nobody ever fled the evil empire wearing Phillip Patek"

As "official records" clearly show....

Death and Gravity's picture

NOT diamonds, which are artifically inflated in price by the De Beers cartel.


PM only. Period.

mayhem_korner's picture



I've taken in a hectolitre or two of cognac in my time...and I've got four guitar-shape bottles of Henessey X.O. that will be the very last thing I defend when the zombies come knockin'.

i-dog's picture

+1. Obviously junked by someone who's never tried it...

FWIW, consuming anything beyond a simple home-cooked meal, or wearing anything beyond a simple loincloth, is indulging in luxuries. To each his own.

Gromit's picture

Lafite Rothschild vintage wine prices off the boil....that was the leading indicator for me.

VelvetHog's picture

Then your head is in your arse.  No offense.  Just sayin'.

arsenal009's picture

Gold swiss watches are sold at over 1000% premium.  Do u really think that when gold doubles or triples ppl are going to sell their watches back into the market for a fraction of the cost?  O_o

Jendrzejczyk's picture

A world where a bowl of hot soup is a fair trade for a gold watch is not inconceivable.

Piranhanoia's picture

As we are often reminded,   "In Philadelphia it's worth 50 bucks".

The4thStooge's picture

Bottoms up bitchez!

bgilliam83's picture

lmfao, if you buy this crap you are waiving the white flag.  What could the price elasticity possibly be of a fucking watch when SHTF?  Sun dials, my friends.

VelvetHog's picture

Sun dials are way too expensive where I am headed when the SHTF.

non_anon's picture

ah, drinking the spirits

my thoughts are soaring

but, alas , my posts are boring

VelvetHog's picture

Your posts may be boring, but mine flat suck.  +1


6 Old Chubs do no t a scholar make.

tickhound's picture

Oh cheer up sports... You both maybe small, but you're slow too.

bgilliam83's picture

Since shit is hitting the fan in a big way within about 2 months (obviously), I would advise rechargeable batteries and a pocket inverter.   I mean, since were gonna have a full blown trade war and everything...

tobinajwels's picture

Tyler how come you dont have any articles on Andrew Breitbart he was a really Good Guy!!

Rogier's picture

I did try melting my Swiss Swatch watch into gold. Didn't work. Tried it again. Didn't work the second time either. I think I'll go Bernanke on this one, 'cause sooner or later it's got to work!

cnhedge's picture

the pattern is not going to change, as china's inflation and bipolarization is not ending.

slewie the pi-rat's picture

the 'swiss watches' are knock-offs and the 'cognac' is from ernest&julioGallo, modestoCA&theWorld

how much you want?

q99x2's picture

Made in China to return to former self. Chinese showing up for work both late and drunk.

jonjon831983's picture

Well, you could also keep the watch as a heirloom and pass it down the generations.

VelvetHog's picture

See Pulp Fiction.  .....up his ass.....

Rogier's picture

Sorry, wrong article.

streetcrawler's picture

What's the symbol for the 2x short swiss watch ETF?

Diogenes's picture

Drunk as a fart but they know what time it is.

VelvetHog's picture

Drunk as a fiddler's fart.......

VelvetHog's picture

This Tyler, in particular, skeeves me out.  The degree of insight keeps me up at night (literally).