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Tuesday, November 24, 2009

Stock Up On Jewelry and Gemstones !

If the fears of hiperinflation are realized, you'll look back with pride on your recent luxury jewelry purchases. All that money you've sunk into custom jewelry and top-of-the-line gemstones will make you look like an absolute genius to your friends. Agree or disagree, that's the position of South African billionaire Johann Rupert, and many will take the advice of a guy who can be described in that manner.
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According to Bloomberg News who has been advising investors, "If we enter a hyperinflation period, you're going to be so glad that you bought expensive stuff two months or six months ago." "If inflation picks up, you're going to see people running into stores, buying high cost jewelry." Will inflation cause a mob to form outside the Cartier store on Fifth Avenue? Well, probably not and you probably wouldn't have to worry too much about the pushing and shoving, but being ready to throw an elbow to protect your purchases probably isn't a bad idea.
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Of course, Mr.Rupert has something to gain – his company, Richemont, is the world's second largest luxury goods maker behind Mo√ęt Hennessy • Louis Vuitton S.A. (usually called LVMH). In Mr.Rupert's talk with investors in the company controlled by his family, he forecasted "normal growth" with luxury sales showing signs of recovery this month and next. What Rupert is worried about is quantitative easing ("queasing," if you will), which involves various governments' pumping money into their saging economies to attain some kind of short-term stability. But, this could lead to a nasty hangover in the form of significant inflation rates in a few years. To beat these problems, he suggests sinking your cash into the playthings of the rich (though not cars, since they don't hold their value all that well). Gemstones, in particular, will be more than shiny in a few years, of course along with Gold.
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Partial reprint from The Luxist news release and Bloomberg News.
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