The threat of hyperinflation in Russia. Implications for art-рынка
ARTinvestment.RU   19 января 2016

Try to imagine the possible consequences for art-рынка rapid depreciation of the national currency with the attendant impoverishment of the middle class

In 2016, the experts of the Economic forum in Davos predict Russia and the CIS countries the increase in unemployment, a further decline in exchange rates of national currencies and hyperinflation, tells us RBC. We hope that country experts — participants of sanctions predict that without gloating. However, what difference does it make. It is important that such forecast looks quite convincing. So, it's time we, the participants of the art market, to prepare for hyperinflation. And to suggest the possible implications for art-рынка rapid depreciation of the national currency with the attendant impoverishment of the middle class.

Hyperinflation — trouble for Russia is not new. In 1992, money has depreciated by 2 500 %, and in 1993-м — by 840 %. State employees, the military, and all had very tight. In 1992-м I was a freshman, was not working, and gloomy thoughts about the welfare drove the traditional way for us. But the crisis of 1998, I met an employee of commercial structure and that hyperinflation remember well.

the Government turned on the printing press, and at the end of 1998, inflation was 84 % (previous year was 11 %). Will be much clearer to illustrate what is happening to the dollar. In January 1998 he was 6 rubles, in September — 16 rubles, and we finished the year with a rate of 20 rubles per dollar. From six to twenty rubles for the year, Carl! Not Germany 1920-х, as in Remark (there they have the prices doubled every 49 hours), but still more than three times per year.

the state Employees in that year came the Khan, it was horrible. They had no chance to react to the situation. And business any-то, but was. Many companies did so: salaries denominated in dollars (when that was not possible), cut immediately to twice or more, all non-production costs were cut, all of whom can be fired. The morning began with watching the news on RBC. And began to learn to work on-новому.

In General, the business conditions weekly of rewriting the price tags are not dead. On the contrary, in this inflationary mess even started a surge in business activity. The transaction was lightning fast — has been forced. Invoices were valid for three days. Today, the transaction will not pass — tomorrow will pay more. Accordingly, all management decisions were taken very quickly. The approval, which in mid-2000-х could drag on for weeks and months, in 1999 we did a couple of days. Forced reduction of staff in 1998 reduced the height of the verticals of management. That is, all issues are quickly resolved at the level of Directors and deputies, and not "Murailles" infinitely unenterprising managers subordinate chiefs bloated departments that started later in 2000-х.

what I'm getting at? In hyperinflation, certainly not anything good. But for art-рынка this is perhaps the least of the list of troubles related to the economic crisis.

What is likely to happen?

1. The dealers and organizers of auctions quickly remember how to rewrite the price tags.

2. Pictures of auction transactions will start to be fixed in the currency of the forgotten formula: "the Central Bank rate at date of payment plus 3 %".

3. Will increase demands on the speed of payment of bills. Pull weeks, as it is now, will not be profitable.

4. Prices in dollars will rise slightly, but in dollar terms will decline even stronger than it is now.

5. The demand will be to use the most expensive and the cheapest. The middle segment — is the most vulnerable in times of crisis.

6. The demand for art is increasing at best will remain at the same level. The fall in the dollar prices will attract new category buyers, but their number will offset the growing decline in the group still active collectors. In particular, newly emerging generation of customers who receive money in the defense sector, medicine and higher education, will experience a noticeable reduction in their capabilities.

7. The quality of the offer on the art-рынке will increase. Those who postponed the decision to sell their work waiting for better times, will realize that the best days were yesterday.

8. Art-бизнес will be forced increasingly to go into the shadows.

be that As it may, while under hyperinflation the art-рынок tune. Much more dangerous for him other things: the growth of social tension, growth of crime, fear of shocks and total frustration for the wealthy, the risk of restrictive state action, his desire that-то to prohibit, license and limit.

Which, by the way, was not in the late 1990-х.

In spite of external similarity the current crisis differs in nature from the events of 1998. Then it was clear that the problems are purely economic, which sooner or later will be overcome, and it is clear as. Now everything is different. This crisis is clearly a long — is largely due to political and ideological (generational) problems, as well as enormous structural changes in the economy. I recall that in 1990-е was not as bureaucratic machine, did not have such a high dependence on imports, a large portion of the population still went on "the Zhiguli" and even sweeter than carrots did not eat anything. In the late 1990-х occurred structural changes in the economy and energy. Then failed even to take seriously the changing role of oil as a fuel source, electric cars and hydrogen fuel presented than-то of science fiction, alternative energy has been in the role of hangers. The idea that banks in the usual form soon will become unnecessary and will share the fate of travel agencies or traditional taxis, seemed completely outlandish.

What to expect art-бизнесу from the state. The most harmful thing that it can do at this time, — to create an additional burden on business. In all its forms. For example, to introduce any-то form of licensing of antique activity. To push or not elaborated at the level of procedures the idea of collecting with vendors on "the right route". Or force to as raw certification of works of art. On the contrary, in a crisis it would be good to help the participants. For example, measures of market liberalization: the simplification of export and sale of Museum duplicates, and other similar steps (see AI: How are we to reorganize "iskren").

When there is no money taken to give freedom.

Still on the topic of:

the Experts Davos warned Russia about the threat of hyperinflation (RBC, 14.01.2016);

Art-рынок: surviving the crisis (AI, 18.03.2015);

When the oil will run out (AI, 28.10.2014);

How can we reorganize "iskren" (AI, 12.12.2012).



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Индексы арт-рынка ARTIMX
Индекс
Дата
Знач.
Изм.
ARTIMX
13/07
1502.83
+4,31%
ARTIMX-RUS
13/07
1502.83
+4,31%
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