I’m not sure if I’ve ever posted here, maybe a couple times, so forgive me if this has been asked recently or what not, but I got to thinking with all the things I’ve heard about diamonds in the past, things involving conspiracies, mafia, and all sorts of entertaining people being involved in large scale price hiking(or so it seems from what people make of it, really I’m just unsure) The most commonI’ve heard people say that theres absolutely huge amounts of diamonds and people simply ‘hide’ them for which people have no further detail to, just that they do, and through that make you pay absolutely ridiculous amounts of money for a somewhat above mediocre looking stone (to which I responded I’d seen a dilbert cartoon like… which shows how little I know on the subject I suppose)
Anyway… just wondering if I could get some clarification on it, since you all seem a bit smarter than I .)
Huh?
The world diamond supply is controlled to a large degree by the DeBeers corporation, which like all corporations, is dedicated to its own profit and survival. It’s not in their interest to produce diamonds in really huge numbers, since this causes the price to drop. Whether or not that counts as a conspiracy depends on your views of capitalism generally.
As for people hoarding diamonds… well, once you buy a diamond, you can do whatever you want with it, including burying it in your backyard.
I have a friend (two actually) who are certified gemologists. I am reliably informed that diamonds are not precious gemstones, but rather semi-precious, due to the fact that they are not nearly as rare as the gemstone buying public is lead to believe. They are much higher priced than they would otherwise be because DeBeers effectively controls a monopoly in the wholesale market, and apparently the UK doesn’t have laws against this sort of thing in luxury goods. NOVA has a nice documentary on how DeBeers works.
Diamonds are a form of crystalized carbon, and are difficult and expensive to make of gem quality artificially, and would probably be more expensive to make artificially than if DeBeers did not monopolize the price.
Interesting, a very rarely occuring natural gemstone, called Moissanite, has within the past several years been successfully grown in the lab (I don’t know how). It is silicon carbide, and very hard, like diamonds, but not quite as hard, being 9.2 or so on the Mohs scale, between corundum (sapphires and rubies and such) and diamond, a 10, and top of the scale. Moissanite (which I’ve been noddling on the web trying to find out about for about a week) has a higher refraction and brighter luster than diamonds, so it will sparkle more, and is not as brittle in some directions. Brittleness is different than hardness, as if you find the “grain” of the diamond, you can easily cut it. A Moissanite (named after its discoverer, Dr. Moissan) is very hard to cut, and basically has to be ground down (with diamonds of a cheap non-gemstone quality) to look like a gemstone. They are much less expensive than diamonds, about a tenth the cost when comparing carat weight.
I gave an answer on [this thread.
Despite what DeBeers has tried to convince everyone, diamonds have no inherent value and are not especially rare. The book [url=http://edwardjayepstein.com/diamond/prologue.htm]The Diamond Invention](http://boards.straightdope.com/sdmb/showthread.php?s=&threadid=108228) is available online and has some really interesting research about DeBeers.
I gave an answer on this thread.
Despite what DeBeers has tried to convince everyone, diamonds have no inherent value and are not especially rare. The book The Diamond Invention is available online and has some really interesting research about DeBeers.
I think there are a lot of diamonds and by far the vast majority aren’t gem quality. You can go to a hardware store and order as many diamond saw blades as you want. If the store don’t keep them in stock, a special order will be placed.
Do you see those guys sawing concrete? Diamonds. Do you see those guys sharpening tungsten carbide tool bits? Diamonds.
But, for gem stones De Beers is it, and there are a lot more of them, as stones, than might be thought at first glance. Of course, a lot of the cost is in the cutting and polishing. I sort of liken them to golf balls. It costs practically nothing to make them. The cost to the end user is mostly in packaging, transportation and advertising, with some profit thrown in at each step along the way.
Whoa, Crakmine. If your location wasn’t in Texas, I would have thought you’re in my econ class. We just talked about diamonds today and how un-scarce they are yet sell for so much.
I am Sparticus, I think an artificial diamond is cheaper to produce than buying one of similar quality from the controlled market of real ones. Numbers I’ve heard are $400 for an artificial one while up to $7000 for a real diamond.
Oh, and is there anything the US can do against deBeers for violating anti-trust laws. I know deBeers is in South Africa so is shielded by that but can the US (or any other country) block their diamonds from coming into the country?
Many countries are passing laws to block the importation of “blood diamonds.” It’s not clear whether the laws violate WTO rules. I haven’t looked very far into the issue, but based on WTO jurisprudence, my feeling is that such measures would be considered an unjustifiable restriction on trade (which shows why the WTO is screwy). A law that banned diamonds simply because de Beers has a monopoly definitely would be struck down by the WTO.
Well, now, wait a minute. This doesn’t make complete sense to me.
I saw a documentary on deBeers, and understood at the time that they were adjusting demand to maintain a high price. But they don’t produce all the diamonds. I think maybe it was 2/3 or 3/4 of the world supply that they produce. Which means that there are a great many diamonds that they didn’t supply. Diamonds would still have to be pretty rare to support the high price. If there’s a sizeable fraction of supply outside deBeers’ control, they can only inflate the price so far - diamonds are still expensive mostly because they’re rare.
And another thing… Industry has lots of use for diamonds. So if large ones were easy to make artificially, they’d be available industrially. And they’re not. All those saws and other industrial products use very tiny diamonds, too small to mount in jewelery (and of who knows what gem quality). There are some industrial uses of large diamonds, like diamond jaw vises used in the study of extreme pressure, but I think these are expensive and use natural diamonds.
What say you?
Quoth I Am Spartacus:
This seems odd to me. Silicon carbide has the same crystalline structure as diamond, so it seems to me that it ought to have the same fracture planes, or “grain”. Why doesn’t it?
It’s true that diamonds have no inherent value. But then, no physical thing has any predetermined “inherent” value. What price an item commands is due to the interaction between the supply of that item and the demand for it, and not due to any inherent “usefulness”, the amount of labor an item incorporates, etc.
Economists call this the diamonds and waters paradox. Water is necessary to life, yet it’s very cheap. Diamonds are comparatively useless, yet they command a high price. Why? Because in this case the supply of water is vast, while the supply of diamonds (aided and abetted by the de Beers cartel, of course) is not.
In fact De Beers is not really a monopoly of diamond extraction. They function more like a cartel in that respect, i.e. although they themselves mine diamonds they represent other miners and dealers who sell through them. The really astute part of the De Beers business model is that while they control more or less all of the mid to heavy carat gemstone purchase of raw diamonds they severely limit how many clients they take on and set an upper limit on how many carat of diamonds each client gets to purchase. A De Beers client will have no say in exactly which stones are contained in the lot they have been assigned and it’s a take it or leave it deal. They release just so many diamonds each purchase cycle that they are constantly supplying just below demand levels. It’s De Beers good name and fair dealing out of the lots that lets them get away with this behavior. Really high carat diamonds (extraordinary large) are usually traded as single items outside of De Beers.
Sparc
There are a number of diamond siteholders that operate outside the DeBeers cartel, notable in Canada and Russia. However, it remains in their interest to keep diamond prices high as well, so don’t expect a price war. De Beers has attempted a “branding” program as a pre-emptive response.
You can call it a conspiracy if you want, but the bottom line is that no one is forced to buy a diamond ever (unless you count your fiancee’s domineering mother). So these accusations of collusion, trust, monopoly, etc, really don’t apply in legal terms. Diamonds are only as valuable as people think they are, just as with all gems. So value is tightly monitored, a process which inevitably involves some supply control.
It is true though that rubies and certain sapphires are considerably rarer. If you’re looking for a truly rare gem you may wnt to consider Tanzanite or Alexandrite or even some rare colored beryls (like emeralds). Again you’re only paying market value based on perceived worth, but at least you end up with something interesting. Diamond-buying has really become a crass mass culture, as classy as cheeseburgers (IMHO).
Another triumph of brilliant marketing.
Diamonds are a hoax. A con game foisted upon the gullible public by the PT Barnums who sold us pet rocks and beanie babies. There is indeed a sucker born every minute.
There was a song in the mid 70s that went:
Sally B. White - You with your diamond ring.
How many Africans died so you could wear that thing?
I just gave you 2 good reasons to boycott diamonds.
Hi Opal.
Diamonds are a hoax. A con game foisted upon the gullible public by the PT Barnums who sold us pet rocks and beanie babies. There is indeed a sucker born every minute.
There was a song in the mid 70s that went:
Sally B. White - You with your diamond ring.
How many Africans died so you could wear that thing?
I just gave you 2 good reasons to boycott diamonds.
Hi Opal.
Diamonds are a hoax. A con game foisted upon the gullible public by the PT Barnums who sold us pet rocks and beanie babies. There is indeed a sucker born every minute.
There was a song in the mid 70s that went:
Sally B. White - You with your diamond ring.
How many Africans died so you could wear that thing?
I just gave you 2 good reasons to boycott diamonds.
Hi Opal.
ARRRGGGGGHHH! Triple post! Not my fault. Damn hamsters go nuts this time of the morning.
Funny, I can’t see even one reason in P’s postings, thrice repeated though they were. A lot of consumer products are a “hoax” in the sense that they’re fairly useless and/or priced well above the expense of production (even with a reasonable markup).
As for dead Africans; Africans were killing each other in large numbers before colonialism, and they seem happy to continue doing so even after after colonialism.
One important element. . .
People (particularly women) hoard diamonds. This plays right into the cartel’s objectives and keeps the price artificially high. How often does and individual sell a diamond that was given to them? The last thing that a woman will dispose of is her diamond engagement ring.
If diamonds were like cars and people disposed of them regularly the price would drop dramatically because diamonds don’t wear out and there would be massive oversupply.
He didn’t mention colonialism. The issue with diamonds is that their extraction funds many civil wars in Africa (or that many civil wars are fought over the control of the extraction of diamonds…it’s usually unclear).
Doesn’t the De Beers have now some sort of code of good conduct concerning the origin of the diadmonds it buys?