A collection of Hermès Birkin bags once owned by a jailed Vietnamese property tycoon fetched £430,000 at a Paris auction today. The sale, occurring against a backdrop of sovereign bond market turbulence, says more about capital flight than fashion. When luxury goods start moving like liquid assets, investors should take note.
The Birkin auction was a convenient hedge for those fleeing risk, but it also underscores a broader anxiety about liquidity and the rule of law in emerging markets. Meanwhile, gilt yields have crept up by 12 basis points this week as the market prices in a higher risk premium for UK debt. The auction proceeds, while modest, highlight a troubling trend: when tycoons' handbags become a store of value, trust in traditional instruments is clearly eroding.
The Bank of England will be watching, but perhaps not closely enough.
