The "art as speculation" fad is just a consequence of "inflation is good" economic theory, the same as "real estate as an investment".

If you don't let people hold onto cash, they will just find something else to replace it (and of course, it is always the lower classes that have to suffer the secret taxation that is money supply inflation targets).

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fluoridation 3 days ago | parent | next [-]

I don't think so. Speculative markets would arise even in a 0% inflation economy, for the same reason that casinos would. Speculation isn't about storing value, it's about gambling. You have a stronger point with real estate, but real estate isn't as volatile or speculative, usually.

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SchemaLoad 3 days ago | parent [-]

There would be very little reason to speculate on art. There's no reason to believe that the average painting would continually go up in value. In a zero inflation environment you'd expect the market to average zero growth. Some random pieces blowing up in value if the artist becomes famous later, but most would go nowhere.

	▲	fluoridation 3 days ago \| parent [-]
		>There's no reason to believe that the average painting would continually go up in value. If I had to guess, on average works of art go down in value, simply because of how much is produced. >Some random pieces blowing up in value if the artist becomes famous later, but most would go nowhere. That's exactly where speculation comes from. It's the same as any form of gambling. On average you're losing money, but every once in a while one lucky guy makes off like a bandit.

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pjc50 3 days ago | parent | prev [-]

It's only really in the latter half of the 20th century that inflation has actually been held to 0-2% by the active manipulation of interest rates to increase unemployment, and yet everyone acts like inflation is the end of the world.