The Wall Street Journal wrote an article recently about the rise of the $200 million (and more) home sales that have emerged in our world. No, they are not mainstream, but they are indeed happening, in New York, Florida and California mostly. While this indicates that those with extreme wealth have the means and the desire to pay whatever it takes to get what they want, it highlights a societal issue that is certain to impact future elections and who our future policy-makers and leaders will be.

Extremes almost always lead to alternative extremes. While the past several years of elevated inflation have reduced the buying power of a majority of consumers as wage growth struggles to keep up, a smaller percentage of owners (not just earners) of homes and other assets have seen their wealth surge. Combine this with lowered taxes (either via federal policies or moves to lower tax states, or both) and this acts as a form of ultra-stimulus that has not-so-quietly spurred another extreme..... extreme luxe-flation. While the rich have certainly gotten richer, their dollar too buys less. Almost everything they buy is more expensive than 10 years ago. And the extremely rich have the means to pay up. What is another $50 million to someone worth $50 billion? We see this in the art world too (and other sectors). A Gustav Klimt painting recently sold for a historic $236.4 million making it the world’s most expensive modern artwork at auction and the second-priciest work of art ever auctioned overall. The previous Klimt sold in 2023, just 2 years ago, for less than half!

While the rest of us roll our eyes and think this won't impact the rest of the world, think again. These massive price increases in the ultra-luxe sector fuel overall inflation, not just luxe-flation. These spending excesses fuel red meat for those politicians and median entities fueling anger against the have's. Never forget the stupidity of our world that loves averaging things. Those huge sales prices at the top end sway averages. 

So today, more than ever, I'd encourage you to view any average with skepticism. Look at the details. Medians are often much better barometers.