Hello, Alan Greenspan, we are channeling you. That’s because the spectacular result of an art auction last week reminds us that the ultra easy money policies you introduced upon your arrival at the Fed in August 1987 are now delivering the whirlwind of runaway asset inflation that you yourself predicted before you traded your gold standard virginity for power and praise in Washington.
We are referring to “No, 7, 1951”, the Mark Rothko painting depicted below which went for $82.4 million at a Sotheby’s auction last week. It happens that the sellers, New York real estate mogul Harry Macklowe and his estranged wife, Linda Macklowe, bought the work for just $35,000 in 1987. And that’s not urban legend, but the testimony of the big time art dealer, Arne Glimcher of Pace Gallery, who sold it to them.
No. 7, 1951 by Mark Rothko=$82.4 Million
We happen to be a great fan of Mark Rothko (although not especially of this work) and also free market capitalism. Therefore if something goes up by 2,354X in 34 years owing to its desirability, brand, scarcity or any other reason—we are inclined to say so be it. The market is entitled to any transaction consenting adults wish to effect.