World Economy Turns Exotic Cars Into Gold

By Admin • June 27, 2010

World Economy Turns Exotic Cars Into Gold

As the U.S. dollar slides and concerns about rising inflation and recession grow, gold and oil prices are surging. And with spot gold hitting a record high of US5.00 a troy ounce recently, and oil reaching 0 per barrel, some analysts say the dollar is going to continue to decline and the Euro and other foreign currencies will strengthen.

Investors and consumers tuned in to Congressional testimony by Fed Chief Ben Bernanke. On Feb. 27, 2008 Bernanke hinted that future rate cuts were on the table. He conceded the following day that he does not predict a return to 1970s-type Stagflation. However, he did mention the credit and sub-prime mortgages crises could cause some banks to fail. In addition, the Labor Department announced initial jobless claims jumped 19,000 to 373,000 and the Commerce Department revealed the economy came to a near crawl in the fourth quarter, growing just 0.6%. The Dow Jones Industrial Average dropped 113 points to 12,581.

So what does all this have to do with luxury and exotic cars? Allot!

Let us examine some historical prices and facts as a comparison to market prices today.

2002 Porsche Boxster: MSRP: ,600 – ,600 2008 Porsche Boxster: MSRP ,800 – 59,000

2002 Ferrari 360 Spider Convertible: MSRP: 0,724 – 0,290

2008 Ferrari F460 Spider Convertible: MSRP: 6,063 – 6,375

2002 Gold per oz. Low: 7.80 High: 9.30 2008 Gold (March) per oz. 8.00

2002 Silver Low: .23 High .05 2008 Silver (March) per oz. $ 19.81

2002 Oil Price per barrel: .13 2008 (Feb) Oil Price per barrel: $ 103.00

Let us start with the Porsche. The increase from 2002 to present March 2008 is: 16%

The Ferrari is slightly skewed because of an upgraded spider model. Nevertheless the increase from 2002 to present March 2008 is: 27%

The percentage increase of Gold is: 180%

The percentage increase of Silver is: 292%

The percentage increase of oil is: 294%

Now let us look at the value of the dollar as compared from 2002 to the present. The U.S Dollar as compared to the Euro in 2002 was about 1 to 1 ( = 1 Euro). Today = 0.66 Euro. That is a decline of approximately 51% to the Dollar. That means that today you are getting a bigger bang for the Euro than the almighty buck Which is precisely why people from overseas who use the Euro as their currency are flocking to the United States to buy our goods at much cheaper prices than they would have to pay for the same goods in their native country.

Therefore when you compare the price increases of the commodities above with a foreign luxury/exotic car, the increase in costs for the cars are substantially lower thus making the purchasing power of the car more economically plausible.

Many economists are saying that the value of the dollar will eventually stabilize and potentially once again gain in value. When that will happen is anybodies guess. So what does this all mean to the purchasing power of a luxury/exotic motor car? The answer very simply is, buy a foreign luxury or exotic car here in the United States while the percentage difference of the weak Dollar vs. the strong Euro continues to be an issue. As long as the price increases of the luxury/exotic cars remains lower than commodity values listed above, the cost of buying a new or used Ferrari or Aston Martin, etc. is like buying gold bullion at prices of gold from 2002 (in my opinion).

Victor Martel is an expert in buying and selling luxury/exotic cars on the Internet. He is also a former Commodities Trading Advisor. To learn more about luxury/exotic cars you can visit his website http://www.finestmotorsports.com or visit his blog http://www.finestmotorsports.com/blog

This is an in-car video with me driving my 2002 Corvette Z06 at NASA’s HPDE at Monticello Motor Club in New York. I am running in the HPDE3 & 4 group (blue and red). Unfortunately, my car’s 3rd and 4th gear synchro in the transmission decided to break in the first session, making it difficult to shift into 3rd and 4th ( you’ll hear the grinding in the video), and it would sometimes pop out of 3rd gear, and get stuck in 4th gear. I was having such a good time on the track, I kept driving through the entire 2nd session like that, but called it quits after 1 lap on the 3rd session, as I had to drive the car 110 miles back home. I made it fine. Sound is by stock LS6, running through StainlessWorks long tube headers, Bassani X-pipe, stock cats, and Corsa Indy mufflers.
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