Consumption or Investment?

Am visiting London once again and continue to be astounded. Astounded not just by the top-sliver of the St. Chelseaberg real estate market, not just by the confidence in future prices despite the most obvious signs supply running headlong to meet demand, not just by foul $6-dollar cup of motorway "coffee", but by the ability of the median to live and consume amidst breathtaking prices-relative-incomes. But more to the point, my spouse, too was aghast at the prices upon picking the latest catalogue from design-doyen Sir Terence Conran. With both sterling and Euro at records vs. Asian mercantilst currencies, why aren't prices for such offerings falling? After my spouse finished, I started leafing through it and raised an eyebrow or two at their audacity and sheer cheekiness to vaulting current prices outside the tether of all prior price sensibilities. Be it the Russians, insensitive as they seemingly are to the effects marginal price rendering a completely horizontal demand curve in relation to price, or City chaps aspiring to emulate good taste, the Shoppe is seemingly not for want of custom.

But what Cassandra found most interesting was the "Thank You" letter from Sir Terence to his customers where amongst other things he tersely recounted some of the firm's history and the joy (and fortune it brought him). He went on to say, attempting to justify the near-ludicrous numbers of digits in his current catalogue (and I apoligize for not quoteing him verbatim) something resembling:

...prices paid for modern furniture designs have been increasing at an incredible pace. There is a strong possibility that this ocurance is a result of changing perceptions of design in the eye of consumers, and perhaps their justified belief that such designs represent not just an increasing appreciation of design, but an excellent investment for future.

I must admit that I was somewhat surprised when I read this. Having multiple offspring, I know that the half-life of an GBP8000 sofa is almost certainly less than immortal, no matter how well-behaved one's brats are. And while I do not wholly dismiss the possibility of such an occurance (being the beneiciary of a smattering of objects d'art handed-down from prior generations), I tend to believe that the real reason is the most obvious one: high Common Inflation in anything other than Asian Mercantilist-sourced goods or services undertaken by low-wage immigrant labour, and that attempts to attribute it otherwise are the embodiment of mere behavioural finance flaws not to mention wishful thinking.