Bloomberg reports:
Don Wagyu, the first restaurant in New York devoted solely to Wagyu beef sandwiches, is located on South William Street in Manhattan’s Financial District, a five-minute walk from the New York Stock Exchange. When it opens on June 27, there will be three sandwiches (or sandos) on offer in the 1,000-square-foot space. Each is made from a different prized wagyu beef. The cheapest, made from a hybrid of Japanese and American cows, Washugyu, will cost about $25. On the other end of the spectrum is the A5 Ozaki, all sourced from a single farm in Japan. That sandwich will cost around $185.Owner Derek Feldman is, of course, wise to locate his restaurant near a Fed money spigot and the New York Federal Reserve Bank itself. A $185 steak sandwich is not for people who are last in line to get newly printed Fed money.
-RW
Robert, I know that you do this a lot, BUT the price of single products has no obvious connection to changes in the money supply.
ReplyDeleteDominick:
DeleteI'm not sure that is true. Considering Cantillon effects, those who get newly created money first receive unearned wealth ahead of others, and thus are in a position to spend this more readily on expensive items or bid up other items. Typically those who get the new money first include those in the financial sector, which is why their favored investments (e.g., art, real estate, etc.) and consumption goods (such as expensive food) get bid up or can be priced highly.
maybe not, but near the peak in the credit expansions we see similar types of things such as crazy priced art work, odd products priced at insane levels, odd services that make no sense on normal conditions. This seems to fall into one of those and could arguably not exist without the magic money machine spraying all over.
DeleteYep, and it's even linked to Greenspan's "wealth effect". You re-fi your McMansion for a couple of mil and suddenly those $185 sandwiches look mighty tasty.
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