It seems the end of cheap money bulging out the Chinese wazoo have put the kibosh on the decade-long rally in the price of fine wine. Confirming what we initially noted back in November [3], it appears that we have a clear winner in the 'best wealth-preservation investment' game as Gold has gone on to dominate fine-wine (and equities) in the last year. As Bloomberg's chart-of-the-day points out, the rapid rise in wine prices - on the back of Chinese demand for French reds - came to an abrupt halt when the PBOC started to put the inflation brakes on - and as is clear - wine is now tracking the Shanghai Composite almost perfectly (down) as the 'asset grab' phase ends. While ironically, wine is (apparently) illiquid - accoridng to Hao Hong of Bocom, the outperformance of Gold in the short- and long-term reminds us of the Monty Python line as Chinese investors appear to have been promised 'all the gold they could eat', since, of course, man cannot live on iPads alone.
Longer-term is it is clear that as China tightened the high correlation between fine-wine and gold started to breakdown - and has snapped now...
[4]
and close-up, the path of fine-wine prices is incredibly correlated to the Shangahi Composite (Chinese stocks) - while Gold and US equities appear to best buddies since the end of LTRO2...
[5]
Charts: Bloomberg