The Diamond Racket

Modified said:
How hard would it be to make fake stones that are indistinguishable from natural?
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Apparently not that hard. But the illogical part, as alluded to earlier is:

Synthetic rubies may have no imperfections visible to the naked eye but magnification may reveal curves striae and gas bubbles. The fewer the number and the less obvious the imperfections, the more valuable the ruby is; unless there are no imperfections (i.e., a "perfect" ruby), in which case it will be suspected of being artificial.
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(I hope I'm not the only one who finds this hilarious)
 
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This is news? This has been known about for decades. De Beers created a monopoly and a slick advertising campaign to go with it. They also ruthlessly stamp on traders who work outside the system. The only longterm, guaranteed source of diamonds is by being a sightholder with De Beers, upset them and you lose the privilege, it's not a commercial risk taken lightly.

Steve
 
Apparently the brainwashing didn't take to me. When given the option, my wife preferred a roof over her head to a ring on her finger.

Go figure.
 
madurobob said:
And why isn't there a well established market for "used" jewelry diamonds? I would expect that something so valuable would be heavily traded in secondary markets at prices that reflect their scarcity. But, buy a new diamond and turn around and try to sell it for what you paid - you can't. They depreciate like new cars, yet we're expected to look at them as an "investment". Huh.
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Because:

But as Edward Jay Epstein uncovered in “Have You Ever Tried to Sell a Diamond?” (February 1982), the idea that diamonds make a good investment is a false one. Diamonds, he argued, are nearly impossible to sell once bought because “any gain from the appreciation of the diamonds will probably be lost in selling them.” He recounted one test conducted by a British magazine: the editor bought diamonds in 1970 and tried to sell them in 1978, but could not sell them for a price anywhere close to the one he had originally paid. Epstein also wrote of a wealthy woman who tried to resell a diamond ring she had bought for $100,000 from Tiffany & Co. in New York City. After shopping the jewel around in vain, she gave up. The problem with selling diamonds, Epstein noted, was that the buyers, not the sellers, control the price:

To make a profit, investors must at some time find buyers who are willing to pay more for their diamonds than they did. Here, however, investors face the same problem as those attempting to sell their jewelry: there is no unified market in which to sell diamonds. Although dealers will quote the prices at which they are willing to sell investment-grade diamonds, they seldom give a set price at which they are willing to buy diamonds of the same grade.

In fact, Epstein argued, the reselling of diamonds was discouraged by the diamond giant De Beers, whose livelihood depended on the perception of diamonds as “universally recognized tokens of wealth, power, and romance.” In order to stabilize the diamond market, De Beers needed to instill in the minds of consumers the concept that diamonds were forever—even though, as Epstein pointed out, “diamonds can in fact be shattered, chipped, discolored, or incinerated to ash.”
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That was in 1982.
I suppose that nowadays you could sell your used diamonds on E-bay?
(I've never used E-bay myself)
 
madurobob said:
Apparently not that hard. But the illogical part, as alluded to earlier is:



(I hope I'm not the only one who finds this hilarious)
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A news program once asked a bunch of women if they would object if they knew their diamond rings were artificial and not mined. Most said they would object and thought it meant that the man thought less of them if he got an artificial one even if it cost the same amount. I guess the way to a woman's heart is through something that comes from slave labor and genocidal warfare. Something that hasn't destroyed countless lives and created immeasurable suffering just doesn't mean as much to them.

Way to go ladies.
 
oggiesnr said:
This is news? This has been known about for decades. De Beers created a monopoly and a slick advertising campaign to go with it. They also ruthlessly stamp on traders who work outside the system. The only longterm, guaranteed source of diamonds is by being a sightholder with De Beers, upset them and you lose the privilege, it's not a commercial risk taken lightly.

Steve
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If the US government wanted, they could clamp down on them for "unfair trade practices." They did it to Microsoft after all. No political will?
 
Travis said:
A news program once asked a bunch of women if they would object if they knew their diamond rings were artificial and not mined. Most said they would object and thought it meant that the man thought less of them if he got an artificial one even if it cost the same amount. I guess the way to a woman's heart is through something that comes from slave labor and genocidal warfare. Something that hasn't destroyed countless lives and created immeasurable suffering just doesn't mean as much to them.

Way to go ladies.
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That's another thing that our culture has been brainwashed into. The words "natural" and "artificial" have strong positive and negative connotations, respectively. So it even extends to things like diamonds where the "artificial" one is objectively better.
 
Puppycow said:
If the US government wanted, they could clamp down on them for "unfair trade practices." They did it to Microsoft after all. No political will?
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De beers is not US based. In adition De beers control is at multiple levels (they own the mines, control the cuters and own/control the supply chains).
 
Puppycow said:
That's another thing that our culture has been brainwashed into. The words "natural" and "artificial" have strong positive and negative connotations, respectively. So it even extends to things like diamonds where the "artificial" one is objectively better.
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Can't really blame de beers for that one. It falls into much the same catigory as orginal work of art vs a copy.
 
geni said:
De beers is not US based. In adition De beers control is at multiple levels (they own the mines, control the cuters and own/control the supply chains).
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I know that, but they sell a lot of diamonds in the US. I suppose if they didn't want to do business in the US, the US would have no control over them, but the US is a huge market. Japan too.
 
Puppycow said:
I know that, but they sell a lot of diamonds in the US. I suppose if they didn't want to do business in the US, the US would have no control over them, but the US is a huge market. Japan too.
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I doubt they sell very many diamonds in the US. The US mostly buys cut diamonds from from the likes of Antwerp. Antwerp gets most of it's rough diamonds from de beers.
 
Value is determined by scarcity. Mined diamonds are much scarcier then mafactured ones, therefore they are worth more. That will never change.
 
dudalb said:
Value is determined by scarcity. Mined diamonds are much scarcier then mafactured ones, therefore they are worth more. That will never change.
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That is an oversimplification to the point of being misleading.

There are less of my toenail clippings than there are diamonds, but unless you want to prove me wrong, diamonds are still more valuable.
 
quixotecoyote said:
That is an oversimplification to the point of being misleading.

There are less of my toenail clippings than there are diamonds, but unless you want to prove me wrong, diamonds are still more valuable.
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Give me a decade and a few hundred million dollars for advertising and I'll have toenail clippings not only desired but expensive.
 
dudalb said:
Value is determined by scarcity. Mined diamonds are much scarcier then mafactured ones, therefore they are worth more. That will never change.
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Much of the scarcity is artificial however, due to the supply monopoly. If De Beers finds a new trove of diamonds, they don't immediately flood the market with them, but instead keep supplies steady at a rate that maintain the high price of diamonds and keep the rest in reserve for later.
 
dudalb said:
Value is determined by scarcity. Mined diamonds are much scarcier then mafactured ones, therefore they are worth more. That will never change.
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That's part of the myth. The reality is that everyday diamonds are not scarce, in parts of Africa they're almost lying scattered on the ground (OK an over simpliflication but in the "Blood" diamond areas you don't need expensive mining equipment to get them.) The very best diamonds (define "best" :)) are scarce because perfection is scarce but these don't end up on engagements rings in the local jewellers either.

Steve
 
Twenty years ago, I wanted an diamond engagement ring when I got engaged ... yeah, I know "boo, hiss, girls are dumb and greedy" ... whatever. Since he didn't have much money, I paid for it myself. It really didn't matter to me who paid for it. I figured that since we were getting married, "my" money would be turning into "our" money soon enough. I also would have happily gone without if neither of us had the money to spend on such a luxury.

Anyway, I ended up losing (stolen, we think) my rings. It was awful! So much money spent on something so little and easy to lose. While I was shopping for a replacement, I began to realize that a nice CZ in a good setting was way, way more appealing than a "real diamond". I picked out a tasteful and well-crafted CZ ring for a small fraction of what a "real diamond" would have cost. I absolutely love it ... and it won't break my heart (or the bank) to have to replace it, either. And, wouldn't you know, "fake" as it is, I get compliments on it all the time.

I think that the whole "natural is automatically better than synthetic" concept is ridiculous. From diamonds to drugs to boob jobs, if something man-made serves the same purpose and is of the same (and sometimes better) quality, should we really care that it's not "real"?
 
Okay, I'm a guy, but...

I just don't get it when people enthuse over a diamond's beauty. Sure, they're a bit sparkly, but beautiful? I just don't get it. I'd much rather look at a river stone, which at least has some marginal interest, and could even be very attractive if it has a different colored vein of rock running through it. Sure, a well cut diamond requires skill, I can see appreciating that, but skill != beauty. If you want sparkle I can break a coke bottle for you in your driveway, I guarantee more sparkle than that little 1 caret diamond on your finger.
 
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