Why, if we keep on hearing about cutbacks and economic misery do we see people standing in queues to buy top end products at the likes of Louis Vuitton, Burberry, Hermes etc? And expensive property is experiencing unprecedented demand. Why does the taxi driver to Heathrow tell us that he and his children will never be as well off as his parents? He says his children will probably never own a house, a car or even have a permanent job. Well, the explanation from our investment-banker dinner guest last night is that everyone in Europe is hedging against the "inevitable" collapse of the Euro. The UK offers what is perceived to be a refuge. So people with Euros are buying hard assets like property, jewelry and even expensive handbags! All as insurance.
But there is another factor. People in in China, Japan and other Eastern countries are so driven by the prestige of top brands that they will sacrifice living conditions to be seen with a Patek Philippe watch or Hermes Kelly handbag. Young people working in modest office jobs spend a disproportionate part of their income on prestige brands. The ultimate consumer society is self-sustaining.
But there is another factor. People in in China, Japan and other Eastern countries are so driven by the prestige of top brands that they will sacrifice living conditions to be seen with a Patek Philippe watch or Hermes Kelly handbag. Young people working in modest office jobs spend a disproportionate part of their income on prestige brands. The ultimate consumer society is self-sustaining.
Those with money will spend money, and those, like the taxi driver,and his children, will not have money to spend. The archaic rift between rich & poor will exist, always, no matter what.
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