I confess: I’m biased. I love wine – almost
as much as I love craft brews. I get hung up on Californian wines; they
are awesome and grow in my back yard, so to speak. Actually, I lovedrinking wine,
not keeping it in a refrigerated vault as an asset class. So I don’t
get the gut-wrenching feeling that investors get who didn’t sell in time
and then ride out the implosion of a bubble. And their guts are being
wrenched.
Blame
China and
central banks.
Wine as an asset class became airborne during the pre-Olympics China
bubble when rich Chinese began plowing their money into it. From the
summer of 2005 through the Beijing Olympics in 2008, the
Liv-ex Fine Wine 100 index –
the “fine wine industry’s leading benchmark” – skyrocketed 152%. But in
the four months after the Lehman Moment, the index plunged 22%.
Frazzled by the seizing wine market, the Fed and other besotted central banks began to douse certain layers of the world with free money so
that Chinese wine buyers would re-indulge in the game. It worked. By
July 2011, the index had soared 76% to 365. The peak of the wine bubble.
Then all heck broke lose.
Please share this article
Martin Armstrong isn’t backing off of his prediction for a major stock market advance. The way he sees it, there’s no place left to put one’s money. He’s not buying the bear case for the market. Not that he believes that the economy is doing well, quite the contrary, but rather it’s a case of where else will the pension funds and big investors park their funds. There’s no alternative and that’s why the market is going to take off–big time!
Click Here to Listen to the Audio
