In the New York Times of June 28, 2010, columnist and Nobelist Prize-winning economist Paul Krugman chides the world leaders at the G-20 summit in Toronto for instituting a number of belt-tightening measures which Krugman feels will accelerate deflation and bring on what he calls "a Third Depression."

Classic deflation stems from a lack of available money in a given market and the subsequent drop in prices as consumer demand dries up. A vicious cycle of job loss followed by shrinking demand and incipient poverty follows. Vice-President Joe Biden warned last weekend in a speech that American jobs lost in the 2008 recession would never return, a classic marker for a deflationary trend.

Deflation as a phenomenon in the art market would look slightly different. Concerns about such a deflationary trend were raised by last week's London sales, not by the ultimate totals achieved by the auction houses, but by the behavior of bidders in the face of classic offerings such as the Édouard Manet self-portrait consigned by hedge-funder Steven A. Cohen (who has been allegedly rumored to be on the verge of a wholesale deaccesioning of his art collection of Saatchiesque proportions), which was previously owned by Steve Wynn.

The deflationary behavior of the megarich was indicated by a tendency not to bid on work, however blue chip, which, like the Manet, had been recently brought to market. This nakedly indicates that the wealthiest collectors do not foresee endless increases in the prices paid for evening-sale art and thus cannot count on such holdings as a future profit center. Like small boys in a game of musical chairs, each collector does not wish to be left standing with a body of art holdings decreasing in value under world deflationary pressure and thus useless as collateral or cash cow.

In a way, this new skittishness at the top end is the natural consequence of one of the more curious phenomena in the recent art-market downturn: the apparent wish of contemporary collectors with wide holdings in a basket of up-and-coming artists of the Dana Schutz and Barnaby Furnas variety to NOT sell.

Some have speculated that sales have taken place under the radar, but the probable explanation is fear that lowered valuations of such work, purchased at the top of the last decade's contemporary art boom, would lead to a spiraling down of prices should a lot of work be simultaneously dumped on the market. It was also felt that such collectors still had enough cash, in spite of the shrinking of their investment portfolios, not to have to raise funds through the sale of art holdings, which number in the hundreds, if not thousands, per collector.

Now the top end of the market is signaling that it, too, foresees a general deflation in value for the priciest art. The connoisseur's dream of a stiff market correction followed by multiple bargains for those with the daring in cash (a phenomenon experienced partially after the Japanese bubble burst in 1989, but not felt long term since the early 1970s) may finally be upon us.

CHARLIE FINCH is co-author of Most Art Sucks: Five Years of Coagula (Smart Art Press).