Jewelry is generally a very poor investment. It is essentially a fashion accessory, and while antique jewelry may accrue value after several decades, in the short term it is a dead loss. Most of the value in jewelry isn’t intrinsic but is the art and effort that goes into making the ring and setting.
Diamonds may be useful as an investment, but you should realize that the value of diamonds has long been artificially inflated by the industry and specifically the De Beers cartel. The intrinsic value of diamonds is essentially nil; diamond is a simple allotrope of carbon, and except as an industrial abrasive, heat sink, and (with certain impurities) a semi-conductor, has no practical use. As others have noted, the technology to produce gem-quality artificial diamonds has emerged in the past decade, and the natural gemstone industry has been scrambling to rationalize why these high quality stones are “not really diamonds” or otherwise unsuitable. It’s a marketing scam that exceeds even premium vodka manufacturers.
A little of both, methinks. The sense of entitlement was already there, of course, but has been fed and inflamed by the marketing arm of the diamond industry which has taken diamonds from being the product for the wealthy elite to something every guy has to shuck a few months of salary on if he even hopes for his proposition to be considered, and every woman should demand as a test of her suitor’s true mettle and earning potential.
I knew a guy who had to go back to get a bigger ring because the one he got the first time was not big enough. I recently went to his second wedding. So things started off on the wrong foot and did not get better.
I would just point out that in #55, Villa disagreed with me when I agreed with you. You and I both have said that money has a universally agreed upon value. He also said a couple of silly things, like “In particular, diamonds, unlike dollars, are indivisible - it isn’t easy to get your change back when you buy a pack of smokes with a 5 karat diamond,” and “Also I would think that diamonds as a currency are more susceptible to forgery, though I am not certain on that one.” Obviously, if your smokes cost a quarter carat, and you hand over a 5 carat diamond, you’d get 4-3/4 carats of diamonds as change. As far as forgeries, Interpol says, “[It] is wrong to claim that computer generated banknotes must be lesser in quality than offset printed banknotes; especially since criminal organizations possess enough financial potential and expertise to finance high quality equipment and to hire experts from the printing industry.” I’m just saying I wouldn’t point to that post for validation of my points if I were you.
I always thought the cultural diamond craze was intensely anti-woman by insinuating you could basically disconnect her intelligence and rational thinking by presenting her with a small, shiny stone. Little did I know…
Actually, I wasn’t really in disagreement with you. I am in disagreement, however, when you call the points that you cite “silly.”
One of the great advantages of money for exchange is its divisibility. When I say that diamonds are indivisible, that’s not an absolute, or at least it never was used that way in all the years I learned/taught economics. It refers instead to ease of divisibility. And it is a hell of a lot easier for a store to make change for a $10 bill than a 5 carat diamond. Especially because where diamonds are used as a medium for exchange, they are unlikely to be the exclusive medium used. It seems a lot less likely that the corner 7-Eleven will have a register with lots of different sizes of diamonds to make change. Obviously that would be different if diamonds were the sole medium for exchange, but I am not sure that has ever occured.
As for the forgery point, I was basing it on the fact that I have spotted forged bills while working retail. I would have no ability whatsoever to spot a paste diamond. Again, if diamonds were the exclusive medium of exchange, your average store owner would learn how to better pick out paste, but I doubt it would be as easy to do. I could be wrong there, however.
I don’t think either of those points count as silly - you seem to think different, obviously. Where I would agree is that I wouldn’t use my post to validate yours either. While I wasn’t attempting to dispute your points (more to develop) I was seeking to support them as such either.
Okay, I should’ve been more specific. THe part of villa’s post I meant to emphasize was where he said diamonds make a poor method of exchange, i.e., they are not like money.
*Cubic zirconia is so optically close to diamond that only a trained eye can easily differentiate the two. There are a few key features of CZ which distinguish it from diamond, some observable only under the microscope or loupe. For example:
* Dispersion. With a dispersive power greater than diamond (0.060 vs. 0.044) the more prismatic fire of CZ can be seen by even an untrained eye.
* Hardness. CZ has an 8.5 to 9.0 on the Mohs' hardness scale vs. a rating of 10 for diamonds.
* Specific gravity. CZs are heavyweights in comparison to diamonds; a CZ will weigh about 1.7 times more than a diamond of equivalent size. Obviously, this difference is only useful when examining loose stones.
* Flaws. Contemporary production of cubic zirconia is virtually flawless, whereas most diamonds have some sort of defect, be it a feather, included crystal, or perhaps a remnant of an original crystal face (e.g. trigons).
* Refractive index. CZ has a refractive index of 2.176, compared to a diamond's 2.417.
* Cut. Under close inspection with a loupe, the facet shapes of some CZs appear different from diamonds.
* Color. More precisely, the lack of color: Only the rarest of diamonds are truly colorless, most having a tinge of yellow or brown to some extent. By comparison, CZ can be made in most cases entirely colorless: equivalent to a perfect "D" on diamond's color grading scale.
* Thermal conductivity. CZs are thermal insulators whilst diamonds are among the most efficient thermal conductors, exceeding copper. This makes telling the difference between diamond and CZ quite easy for those with the right instruments.
In other words, by just a casual examination of a ring on someone elses finger- the two are impossible to tell apart.
If diamonds are used as a medium of exchange, they are indeed money. They would not be very good money, but they can function as money nonetheless. Many “consumer goods” have been used as money: silver, gold, beads, salt, ivory, tulip bulbs, those big huge rocks with a hole in them, etc. Unlike greenbacks, diamonds are not, and could not be fiat money. That is the difference, and I suspect is the source of our misunderstanding, as you say “Money has value for what it represents, not for what it IS.”
Fiat money is very useful, but can easily fail, which is why I brought up Zimbabwe. This is also the reason some people keep a bunch of silver dollars around. I honestly don’t understand what you’re getting at with the pound of bricks v. pound of feathers analogy.
Of course I realize that the international diamond trade is manipulated, although probably less so today than 20 years ago. I even co-authored a paper on industrial organization in the diamond trade back in my grad school days. I never said diamonds were good money, but they aren’t money because, “Diamonds are not money because their worth is artificially manipulated and inflated,” as you say. Many, many, fiat currencies around the world are artificially manipulated and inflated, but they are still money. Think, “official exchange rates.” When the U.S. was on metal standards, no doubt the metals market was medaled with; does that mean our grandparents weren’t using money?
Utility and enjoyment are indeed the same thing in economics. (Well perceived enjoyment, if that caveat is were the disagreement lies, my apologies) This is purely definitional from any econ text, I don’t see the argument. Value is a function of aggregate utility in a market. Again, I don’t see the argument. Something without a practical use can indeed provide utility and have value, obviously.
Using the word “good” was perhaps a poor choice of words on my part. However, money has no universally agreed upon value, and I think this is where a lot of non-economists run into trouble. If money had an agreed upon value, there would be no inflation, and no currency exchanges. You may value $5 US at 1 hour of labor, where I might value it at 2.
I don’t think we disagree here, but quite a few of my students when I was teaching had trouble with the inherent reason teachers made less then football players.
I think it bears pointing out that diamonds are not linearly divisible like bullion is. If I cut a 5 carrot diamond into 5, 1 carrot stones, what I have left is much less valuable. Such is not the case with bullion, one reason why bullion would make better money than diamonds.
You asked if I would rather be paid in “Zimbabwean diamonds or Zimbabwean dollars.” My point was that I would be paid the same amount regardless of which method would be used to pay me, so this example doesn’t mean anything. Maybe you were trying to say something about the instability of Zimbabwean currency compared to diamonds, but this was a poor way to make that point. If I am owed 100 Zimbabwean dollars for work I performed, I am paid the same whether the method of payment is cash or an equivalent amount in diamonds. Perhaps the currency isn’t as stable as the diamonds are, but that’s a different matter, and I can circumvent that by just exchanging the cash for something more stable, such as American dollars or gold right away.
You can value 2 hours of labor at $5 all day; that doesn’t mean you’ll get more than 1 hour of labor out of me for that price. If you need me to work, then my labor is the commodity that is for sale, and it’s price is determined by the market, not by what you or I think or what $5 will buy elsewhere. What $5 buys might vary, but it is still $5 wherever you go.
Oh, that’s easy. Tell them there are 1,700 roster spots in the NFL, and 1.5 million teaching jobs in the U.S., and the same amount of money to pay both professions. Tell them if they don’t like that they need to stop watching football and pay higher property taxes. I think they’ll grasp the essence of the issue.
then the next phase, mounted chunks of Coal… a.k.a. “Raw” Diamonds
actually, diamonds (well, diamond dust, really) are very useful for sharpening bladed tools, nothing restores a damaged edge to shaving-sharpness better than a few passes on a diamond whetstone…
I would like to indicate that I agree with the OP on the notion that being taken to fucking Paris for a month sounds a lot better than a ring. Mind you, in a month I think I’d like to leave the room for some fresh air at least once.
Like many of the female posters here, I’m not a fan of diamonds or roses. (Irises are more my style.) My engagement ring is a little modern and unusual–titanium with a round cut white sapphire-- but it looks close enough to a diamond with enough size that I haven’t gotten any sneers or nasty comments from the “must have a giant rock” club. It wasn’t what I expected, but I still love it; in just the right angle, it’s a pale glacial blue, but at every other angle, it’s clear.
If I have stone settings in my wedding band, I’ll more than likely go for black sapphires or something else interesting, unique, and strong enough to withstand being set in titanium. Too bad Iolite is just too soft; it’d look great in a titanium jewelry piece if it had a greater Moh’s hardness rating.
I don’t dislike diamonds in an aesthetic sense, but I certainly don’t want any. I have a philosophical objection to engagement rings in the first place (I just hate the whole wave-it-around-under-everybody’s-nose “I got me a may-un and he’s willing to spend himself into debt for me!” mentality. I’m not saying that’s the way it is, just the way I personally perceive it, and I find it objectionable). The spouse did not get me one (I asked him not to). My wedding ring is titanium, as is his (we thought it would be cool and geeky, not to mention spiffy-looking). If he ever got me flowers, I would look at him like he just grew a third arm. I don’t like “girly” things much in general, and the whole “I spent a lot of money on something that’s just there to die/look pretty/make your friends jealous/dust” thing has just gone right over my head.
I’ve told him many times that if he wants to get me a gift, I’d much rather have electronics than sparklies. We’ve been married coming up on 18 years, so we must be doing something right. He says it with iPods, computer equipment, and hockey stuff.
Oh, and we got married right out of college. My parents gave me $2,500 for the wedding. We had the wedding and spent over $1,000 of the money on our first apartment. I would have been just as happy going to Vegas, but he wanted a church wedding so we had a small one.
(Sung to the music used on the Debeers Commericals)
“I want a diamond
I really do
I think that you
Should give me one
Then you can prove
Your love is true
And that the gift giving
Has just begun
I want that diamond
I want that thing
A tennis bra-
Celet or ring
It better shine
It better cut
I know it is expensive but
What other way
Can you make four months
Of your measly salary
Last a lifetime?”
Rasputina - Diamond Mind
(full lyrics not shown per board rules. do a search fer crying outloud.)
