Hey big spender

NEW TOWN, EDINBURGH – I’d been putting it off for so long…

Looked steadily more ridiculous as the months have gone by…

And been called a “pirate” (amongst other things) as a result…

But it was finally time to get a haircut.

I was going to get it done earlier, but we were in the middle of filming the 2021 Gold Summit and I didn’t want to look suddenly different from one interview to the next.

And as my favourite barber is here in Edinburgh, I thought I may as well wait until I was down here before getting my lockdown mane shorn off.

Nobody in Edinburgh is still rocking a lockdown haircut, so I’ve been getting plenty of funny looks the past few weeks. That might just have been my Enron cap though.

I arrived at the hairdresser in question to find that lockdown had left it significantly worse for wear. It wasn’t much of a surprise, but as there’s evidently so much demand for haircuts now, I thought it’d be on the up.

The kindly gentleman who attended me was the same man who had cut my hair when I was still a schoolboy. I have fond memories of my first visit, when he handed me a beer as I entered the premises for consumption as I waited my turn. It was a beautiful summer’s day – just like now. Good times. Simpler times.

Walking back through the familiar doorway, I found the man several stone lighter and several screws looser than the last time I’d seen him. While he made no admission of it, as he sheared away my unruly mop and told me how business was doing, it became clear that his mental health had suffered significantly over the past year.

It was yet another reminder that while things look better than they were, and there is plenty of room for optimism, some things will never quite be the same. On some matters, there will be no “returning to normal”.

A reader forwarded me an article recently on the phenomenon of “revenge spending”: folks blowing cash on luxury goods in an almost nihilistic fashion to make up for the year of confinement. As the reader describes:

To me, this is a perfect example of how inflation could run away with us and also how people are rushing to spend their fiat money – not for the sake of spending and consuming, but as an investment that may hold or increase its value over time vis-a-vis the diminishing purchasing power of fiat.

The article in question from the Telegraph focuses on luxury cars, noting how Lamborghini has been having a whale of a pandemic:

Tired of having spent much of the last year cooped up at home, customers are splurging cash on high-end items as they emerge from lockdown.

In scenes reminiscent of the carefree spending of the Roaring Twenties, some have decided that they deserve the iconic car as reward for enduring the pandemic.

Lamborghini announced it was set for “strong growth” this year, despite being forced to shut down for two months due to the coronavirus.

The Italian supercar brand had sold out 10 months worth of its annual supplies, Bloomberg reported.

“Despite a two-month shutdown due to the pandemic, Lamborghini ended 2020 as its second-best year ever,” said CEO Stephan Winkelmann at the Milano Monza Motor Show.

One should note that Lambos are a favourite of crypto investors, so the boom in Lambo sales may well be correlated with the boom in crypto. But I agree that we’ll be seeing a lot of revenge spending soon – and it’ll be a thin mask for the inflation burning behind it.

There will be no returning to the pre-WuFlu era. Some of the changes we’ve seen take place over the past year won’t be unchanged. Some restrictions won’t be reversed. And some new trends will only accelerate.

Wishing you a good weekend,

Boaz Shoshan
Editor, Capital & Conflict

PS I’ll be working more with Nickolai Hubble and the team over at Fortune & Freedom in the near future – sign up here to keep abreast of the latest developments.

Category: Economics

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