Nicole Lapin

It's a liquid asset and the government doesn't get a cut.

Step three, reappraise the art.

Let's say our original buyer stored their $5 million painting in Geneva.

A few years later, they get it appraised again and this time it is worth $20 million.

who decides that well a private appraiser which can be hired by the collector or their family office in some cases appreciation of a piece of art is just about the legacy of the artist or the cultural significance of the work but in some shadier examples it's just the richest people in the world pulling strings and when it comes to art if you're a billionaire pulling strings is easy

There is no SEC, there is no NASDAQ for art, there's no central regulatory body that says what something is or isn't really worth.

Valuation in the art world is largely subjective, based on comparables, artist reputation, and you guessed it, how much somebody paid for similar work recently.

So if a few insiders coordinate purchases at inflated prices, they can essentially manufacture value.

And it is perfectly legal and incredibly lucrative.

Take the works of Rudolf Stengel.

His pieces were relatively unknown in the early 2000s.

But by 2017, one of his paintings sold for $7.3 million at Christie's.

Why?

Strategic placements in museums, carefully managed auctions, and collectors who had financial reasons to see his work appreciate.

Step four, use the art as a financial tool.

Now that the painting is worth $20 million, the owner has three options, none of which involves selling the work.

There's option A, borrow against it.

Banks and private lenders now offer art-backed

loans you can borrow up to 50 of the appraised value of your painting tax-free because remember loans are not income so they're not subject to income tax so if your art is worth 20 million dollars you might take out a 10 million dollar loan against it and use that money however you want you could buy real estate you could fund a startup you could fly to space

Whatever.