12 percent. But even if a thief trades a multi-million dollar Picasso for, say, $500,000-worth of AK 47′s, he still comes out okay. Regional wars involving old tribes, new gangs have made it worst says Julian Radcliffe, citing the Balkan War of the 1990′s. Ellis then goes on to say that “art is often held as security at an arms deal. Then, once the guns are paid for, the art is gradually sold back to Western Europe through shady dealers or art fares”.
One of the most important characteristics of a tradeable commodity is standardisation. Gold is an excellent example of a tradeable commodity because of the fact that it is an extremely standardised good which makes it very easy to trade. One particular luxury good that has been the focus of much speculation due to differing opinions regarding the good’s status as a tradeable commodity is the diamond. Martin Rapaport, a highly regarded diamond dealer and advocate for the commoditisation of diamonds, says that diamonds are definitely a commodity because: “You buy and sell them for cash. They’re a natural resource with limited supply; they’re well defined; they’re certified; they’re analyzed, graded, tradable around the world”. The only artists whose work can be considered have the characteristics that Rapaport identifies, ie. are in: limited supply; well defined; certified; analyzed; graded, and tradeable around the world, are the Old Masters and some artists from more modern movements such as impressionism which still retain many of the characteristics of the movements associated with the Old Masters. The work of the Old Masters are also relatively standardised and are therefore the most likely candidates for being used as a tradeable commodity should an global economic collapse take place. My advice, therefore, is to have at least some positions in the work of Old Masters as a form of wealth preservation and a hedge against the likely economic collapse that is soon to take place.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications
