Here's How the Ultra-Wealthy Feel about Fiat Currency

Mont Sainte-Victoire, by Paul Cezanne, 1902-6, French Post-Impressionist painting, oil on canvas. The artist worked on this proto-cubist landscape for over four years. By Everett Collection @ Shutterstock.com

If you want to know how the ultra-wealthy feel about the value of fiat currencies, take a look at the recent auction of the art collection of late Microsoft co-founder Paul Allen. The ultra-wealthy are turning their less-valuable, inflated fiat dollars into hard assets like great works of art. Kelly Crow reports for The Wall Street Journal:

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Microsoft co-founder Paul Allen’s estate made auction history on Wednesday when a group of 60 artworks from his estate sold for $1.5 billion, smashing the record for priciest collection ever sold at auction.

Lush landscapes and rare examples by artists like Paul Cézanne, Georges Seurat, Sandro Botticelli and Jasper Johns anchored a sale at Christie’s in New York that reaffirmed the depth of the trophy-hunting art market at a time of broader economic uncertainty.

“He changed the way we live our lives,” Alex Rotter, Christie’s chairman of 20th and 21st century art, said of the personal-computing pioneer. “Now, he’s changed the art market.”

Mr. Allen’s trove surpassed the previous, $922 million record set in May by New York real-estate developer Harry Macklowe and his ex-wife, Linda Macklowe. Whereas the Macklowe holdings were packed with midcentury masters and pop icons like Andy Warhol, Mr. Allen amassed a museum’s breadth of pieces, from old masters to impressionists to American modernism. The sale had been expected to reach $1 billion, the house said.

Seurat’s $149.2 million “Models, Ensemble (Small Version),” proved to be the night’s star. The placemat-size painting of three women from 1888 hints at his larger, earlier scene of the same trio that belongs to Philadelphia’s Barnes Foundation. It was only estimated to sell for $100 million, but four bidders pushed it higher.

The winning telephone bid was fielded by Christie’s specialist Xin Li-Cohen, who often represents bidders from China and the U.S.

Rather than being the sale’s highflying outlier, the Seurat was merely one of five works that topped $100 million. These included a $137.8 million mountaintop vista by Cézanne from 1888-9, “La Montagne Sainte-Victoire,” that sold following a single bid to an anonymous telephone bidder.

Vincent Van Gogh’s 1888 “Orchard with Cypresses” also sold for $117.2 million to a different bidder fielded by Ms. Li-Cohen. Botticelli’s “Madonna of the Magnificat” sold for $48.4 million, well over its $40 million estimate.

Even for the seasoned art establishment, the domino effect of so many big-ticket pieces one after the next lent a surreal atmosphere to the proceedings, with well-heeled collectors holding their cellphones aloft as auctioneer Adrien Meyer or Jussi Pylkkänen brought down the gavel. (In a rare move for an evening sale, the men each took turns at the rostrum.)

Action Line: Protect your money from inflation. If you need help, let’s talk.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.