I think it’s a real shame that so many men and women alike are completely sucked into the concept that diamonds have any significant sort of intrinsic worth. Especially so when it comes to price paid and resale value.
De Beers has manipulated this single, highly lucrative market to such an extreme degree that the cost of goods and the sale price have no relevance to each other. As it stands, any De Beers officials that set foot in the United States are subject to arrest for monopolistic practices.
Even more disgusting is their sudden corporate stance that DeBeers is buying only “clean” gems that are not a product of the horrendous civil wars in Africa. What they fail to mention is that what they are selling can come from any country and any place. There is almost no significance in what they buy or do not buy as of now. Their current stocks could probably sustain internal sales for decades.
Their ability to co-opt huge finds in Australia and Russia comes from massive liquidity that they maintain in order to absorb any large fluctuations in availability. They recently obtained over a third interest in the Ekati mine and a majority in the Snap Lake project, both in Canada. Finds in the Northwest Territories represented one of the few chances to face off the De Beers machine. Instead, they too have been brought into the fold.
I have always maintained that high quality coloered gems like emeralds and rubies have greater investment value. Sadly, they are are probably mined under even worse conditions than the African mines. It’s just that they are fairly rare compared to decent grade diamonds. I find it especially ironic that the thrifty Japanese have been so taken in by the new pseudo-standard of the one carat diamond engagement ring.
Any comments on the ridiculous nature of the gem trade?