Reply With QuoteFrom the Coutts website.
There’s an interesting article in the Times this morning, though it tells us something we all know. The posh bank Coutts has created a ‘Luxury Price Index’, which looks at a basket of luxury goods and shows that price inflation for luxuries is far higher than the consumer price index (CPI), the usual index quoted. In fact, more than twice as high, at 5.9% as compared to 2.4%. That may not sound huge over a year, but consider the effect of compound interest - the price of luxuries will pull away exponentially over time if that trend continues, or may already have done so for some time.
Of course, this ‘basket of luxury goods’ certainly includes high end watches, but includes many other things too. Given the increase in the Swiss Franc exchange rate since the financial crisis (the last one, not the one we seem so determined to create for ourselves now), I’d expect watches to be leading the way. But as I said, we already knew that, didn’t we?
*I’ll try to add a link to the article later, but currently the app has an ‘unexpected error’.
** edited due to the input of Guycord in post 8
Last edited by Itsguy; 13th December 2018 at 15:48.
From the Coutts website.
The poor rich.
Things are only going to get more polarised over the next few years
Good luck everybody. Have a good one.
Poor people on average salaries who used to like the odd treat once in a while if they worked hard for it. Poor watch collectors!Originally Posted by Passenger
Sad that health's on there
Private health care is a luxury product.
It's just a matter of time...
I would like to politely disagree with the article and the OP.
The article is there to typically condition us as how think of what inflation is. i.e. an increase in costs.
To paraphrase: -
1. Inflation is an increase in the supply and circulation of a Nations currency (not money – which has amongst other tangible properties, a specific property of being a true store of value and therefore by definition cannot inflate or deflate). Currency does not have to be a store of value and therefore can inflate or deflate as a result.
2. Deflation is a decrease in the supply of currency in circulation
Inflation occurs when a Nation is forced to either borrow or print currency and place into circulation.
The optics to the average layman is that prices seem to “increase” whereas the truth of the matter is that the currency is less rare and special and therefore buys less.
Govt/politicians/Bankers >>>> print money >>>> decrease currency value >>>>> prices go up >>>> Hoi Polloi blame greedy Capitalist fat cats for putting the prices up >>>>>> Govt/politicians/Bankers laugh and get away with it. Rinse and repeat.
In terms of the article, it says to me either; some specific luxury goods retain their value better than others or that some industries are able to compete by decreasing their costs (race to the bottom) and hence their specific inflation appears to be lower.
Divide and conquer. Narrative: Rich can afford luxuries (i.e. buy items that retain value)….so we have an excuse to tax them some more. Stopping the printing of money stops inflation, which stops the Us and Them polarisation.
Now why would anyone in a position of power want to do that?
Last edited by Guycord; 12th December 2018 at 16:52.
You're right, I shouldn't have described it as the 'rate of inflation' of luxury goods, and Coutts only claim that it's a 'luxury price index' that measures the price of a different basket of goods to the consumer price index. Arguably part of the reason for this inflation of prices is not just inflation itself, in terms of printing money. However if this printed money disproportionately ends up in the hands of the already rich, or at least those with assets, then you could see how that might allow watch brands to raise prices if the supply remains the same, or doesn't increase fast enough to meet demand. So it seems that while inflation causes rising prices, it doesn't necessarily cause all prices to rise equally.
Exactly. Our existing system should be good enough that there’s no need for private.
In some parts of the world, any health care is a luxury product
Good luck everybody. Have a good one.
Makes me wonder how they've defined luxury for this because to me a luxury is something that is not a necessity; wheras healthcare is always a necessity - it's just that some cannot afford it or live so remotely that it's not easily accessible.
They will mean private healthcare and the cost of Harley Street consultants. Healthcare is a necessity, jumping the queue is a luxury.
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