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    Here’s a question that might have you pondering: Is gold a commodity? More importantly, are we doing a disservice to the gold industry by calling gold a commodity? These may sound like silly...

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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Thu, 03/01/2012 - 21:16 | 2215332 Larry Dallas
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.

Thu, 03/01/2012 - 22:40 | 2215514 Doña K
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. 

Fri, 03/02/2012 - 01:54 | 2215957 Dane Bramage
Dane Bramage's picture

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





Fri, 03/02/2012 - 02:55 | 2216051 Maos Dog
Maos Dog's picture

You can order your giraffe here:




I am still waiting for mine to arrive.

Thu, 03/01/2012 - 21:17 | 2215335 fonzannoon
fonzannoon's picture

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

Fri, 03/02/2012 - 03:12 | 2216072 GovtMediaLiars
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.


Thu, 03/01/2012 - 21:17 | 2215338 Lady Heather...UNCLE
Lady Heather...UNCLE's picture


Thu, 03/01/2012 - 23:37 | 2215732 Vampyroteuthis ...
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!

Fri, 03/02/2012 - 04:12 | 2216126 Fluffybunny
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.

Thu, 03/01/2012 - 21:18 | 2215339 Schmuck Raker
Schmuck Raker's picture

The death of Kim Jung Il is a black swan?

Thu, 03/01/2012 - 21:18 | 2215342 Poor Grogman
Poor Grogman's picture

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

Thu, 03/01/2012 - 21:27 | 2215362 mayhem_korner
mayhem_korner's picture



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

Thu, 03/01/2012 - 21:29 | 2215365 arsenal009
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.

Thu, 03/01/2012 - 21:35 | 2215384 Bobbyrib
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.

Thu, 03/01/2012 - 21:42 | 2215394 superflyguy
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!).


Thu, 03/01/2012 - 21:51 | 2215414 MrSteve
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!

Fri, 03/02/2012 - 02:45 | 2216038 Milestones
Milestones's picture

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

Fri, 03/02/2012 - 06:57 | 2216253 vato poco
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.

Thu, 03/01/2012 - 21:29 | 2215366 MrSteve
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.

Thu, 03/01/2012 - 22:35 | 2215500 Poor Grogman
Poor Grogman's picture

"Nobody ever fled the evil empire wearing Phillip Patek"

As "official records" clearly show....

Fri, 03/09/2012 - 10:01 | 2239320 Death and Gravity
Death and Gravity's picture

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


PM only. Period.

Thu, 03/01/2012 - 21:22 | 2215350 mayhem_korner
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'.

Thu, 03/01/2012 - 21:53 | 2215416 i-dog
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.

Thu, 03/01/2012 - 21:25 | 2215357 Gromit
Gromit's picture

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

Fri, 03/02/2012 - 02:09 | 2215982 VelvetHog
VelvetHog's picture

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

Thu, 03/01/2012 - 21:26 | 2215359 arsenal009
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

Thu, 03/01/2012 - 21:53 | 2215415 Jendrzejczyk
Jendrzejczyk's picture

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

Thu, 03/01/2012 - 22:00 | 2215425 Piranhanoia
Piranhanoia's picture

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

Thu, 03/01/2012 - 21:32 | 2215376 The4thStooge
The4thStooge's picture

Bottoms up bitchez!

Thu, 03/01/2012 - 21:35 | 2215379 bgilliam83
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.

Fri, 03/02/2012 - 02:07 | 2215980 VelvetHog
VelvetHog's picture

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

Thu, 03/01/2012 - 21:37 | 2215389 non_anon
non_anon's picture

ah, drinking the spirits

my thoughts are soaring

but, alas , my posts are boring

Fri, 03/02/2012 - 02:06 | 2215977 VelvetHog
VelvetHog's picture

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


6 Old Chubs do no t a scholar make.

Fri, 03/02/2012 - 02:17 | 2216001 tickhound
tickhound's picture

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

Thu, 03/01/2012 - 21:41 | 2215393 bgilliam83
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...

Thu, 03/01/2012 - 22:17 | 2215461 tobinajwels
tobinajwels's picture

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

Thu, 03/01/2012 - 22:23 | 2215477 Rogier
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!

Fri, 03/02/2012 - 02:04 | 2215973 VelvetHog
VelvetHog's picture

I get it!

Thu, 03/01/2012 - 22:28 | 2215484 cnhedge
cnhedge's picture

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


Thu, 03/01/2012 - 23:52 | 2215487 slewie the pi-rat
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?

Thu, 03/01/2012 - 23:00 | 2215591 q99x2
q99x2's picture

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

Thu, 03/01/2012 - 23:04 | 2215608 jonjon831983
jonjon831983's picture

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



Fri, 03/02/2012 - 02:03 | 2215972 VelvetHog
VelvetHog's picture

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

Thu, 03/01/2012 - 23:21 | 2215631 Rogier
Rogier's picture

Sorry, wrong article.

Thu, 03/01/2012 - 23:18 | 2215667 streetcrawler
streetcrawler's picture

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

Fri, 03/02/2012 - 00:42 | 2215858 Diogenes
Diogenes's picture

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

Fri, 03/02/2012 - 02:12 | 2215989 VelvetHog
VelvetHog's picture

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

Fri, 03/02/2012 - 02:01 | 2215967 VelvetHog
VelvetHog's picture

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

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