While the rest of the world is struggling through the financial crisis, the rich are back with a vengeance. They are buying up luxury goods and demand is running higher than anyone expected.
The Financial Times reports that Louis Vuitton and Ferrari can hardly keep up with demand after last year's slump. Italian fashion label Prada's profits have quadrupled in the first half of 2010.
The significance of this story is that it highlights the shift in geopolitical power. While Europe and America are struggling and are unlikely to emerge from the crisis for many years, Asia is booming. As Reuters points out, massive economic growth in Asia and in particular China is fuelling demand for luxury cars like BMWs and Daimlers. That's also true for clothes and jewellery.
So the demand for luxury goods is not really a sign of recovery. Rather, it points to a significant change that's now transforming the global economy.
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