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Greater China-including Hong Kong and Taiwan-now Links of London Sale for 15% of global luxury demand, says Ms. Reyl. She believes that by the end of 2011 China will have overtaken Japan, once the powerhouse of luxury sales.Luxury companies that slashed costs during the recession, weeding out waste and closing down weak stores, are seeing the results flow through to the bottom line.It's not just about emerging markets, either. High-end consumers here in the U.S. are in much better shape than the rest, and they're spending again.Sales at Tiffany's flagship New York store are up 8%. Luxury giant LVMH, which has more than 500 U.S. stores, and whose brands include Fendi, Givenchy and Donna Karan as well as Louis Vuitton itself, says U.S. sales have jumped 15% this year. The Swiss watch federation says exports of Swiss watches to the U.S. are up nearly 15% through the end of November.And the blue blood's ultimate blue chip, Compagnie Financiere Richemont, which owns Cartier, Van Cleef & Arpels, Montblanc and a whole host of Links of London Necklaces brands, says strong U.S. sales to helped drive total revenue growth across the Americas this year by a thumping 37% in the six months to September.In its latest global survey on the luxury goods industry, consultants at Bain estimate U.S. luxury sales will grow 12% this year-including a remarkable 22% gain for fancy shoes and other branded leather goods.By contrast, total retail sales across the entire U.S. economy have risen by a more modest 6% or so this year.Who's buying? Hardly the middle-class. With unemployment high, home prices slumping and the economy sluggish, too many are either struggling or watching their pennies.But the elite have money. And they are starting to spend again.The rich and the very rich-the latter having more than $30 million to invest-have seen a sharp rebound in their fortunes following the crash, according to the most recent wealth report from Cap Gemini, the consultants.Pictet's Ms. Reyl notes that the Links of London Red Friendship Bracelet retailers seeing the biggest gains are often those at the top of the tree. We're not talking about "mass affluent" retailers like Saks & Co. or Neiman Marcus, but the kind of companies-such as those run by Richemont or LVMH-which have their own stores.Have luxury stocks risen too far? They're far from cheap. Ms. Reyl says that after the gains of the past year stocks in the industry are now, on average, about 19 times forecast earnings.Most value investors would steer clear. But these companies enjoy astonishingly fat margins and buoyant cashflow. (Tiffany makes 58 cents of gross margin out of each dollar spent there.) Many have strong customer loyalty and economic moats. I'd rather be in the business of selling $500 handbags than buying them. Especially if the rich continue to get richer.And of course these are growth plays. If you're looking for bets on emerging market consumers, they are cheaper than many sky-high emerging Links of London Red Heart Charm Bracelet stocks themselves. Ms. Reyl notes that consumer companies in China frequently trade for 30 times forecast earnings.It's always dangerous to jump on a bandwagon. But the underlying themes are exceptionally strong.