#187249 - 29/10/2003 15:52
How diamonds became valuable
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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This was posted recently on Fark, but I thought it was fascinating how a multinational corporation pulled the wool over the eyes of basically everyone in the US (and elsewhere, but mostly the US) in order to keep prices on diamonds artificially inflated. It also predicts (it was written 21 years ago) about why diamond prices dropped dramatically over the last fifteen years or so. I'd love to see a follow-up.
Have You Ever Tried To Sell a Diamond?
It's three big web pages of text, so, to summarize for those of you who might be interested but not enough to spend the time reading the whole thing, it talks about how DeBeers, the owner of and/or sole distributor for 99% (at the time, apparently) of all of the diamond mines in the world artificially kept the price of diamonds high by using advertising to convince the US populace that ``Diamonds are Forever'', despite the fact that the discovery of diamond mines in South Africa and Siberia means that there's a virtual glut of diamonds -- hardly the rare find of European Roylaty of yore.
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Bitt Faulk
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#187250 - 29/10/2003 15:57
Re: How diamonds became valuable
[Re: wfaulk]
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carpal tunnel
Registered: 30/10/2000
Posts: 4931
Loc: New Jersey, USA
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If you're into reading about diamonds and DeBeers getting screwed, read this Wired article.
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-Rob Riccardelli
80GB 16MB MK2 090000736
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#187251 - 29/10/2003 16:05
Re: How diamonds became valuable
[Re: robricc]
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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I just want to see all those people who bought into this whole diamond scam realize that they've been scammed, so that there can be a huge backlash against DeBeers. Unfortunately, I don't see manufactured diamonds having the desired effect. 
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Bitt Faulk
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#187252 - 29/10/2003 16:10
Re: How diamonds became valuable
[Re: wfaulk]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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People won't care. My wife has known about this for a long time, but you think she would have been content with anything but a real diamond on her engagement ring? De Beers has shaped public perception, and even when we know better we like the lie better than the truth. Such is human nature I suppose.
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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#187253 - 29/10/2003 16:15
Re: How diamonds became valuable
[Re: JeffS]
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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I think people will care when the diamond that was sold for $50,000 that is now sold for $25,000 is being sold for $100.
Of course, I don't think that will have any affect on the real heirloom stuff, but all those things that you bought in the last twenty years seem destined for getting dusty in a vault, still under the impression that they are inherently valuable.
Now, emeralds. There's something I can get behind. 
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Bitt Faulk
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#187254 - 29/10/2003 17:05
Re: How diamonds became valuable
[Re: JeffS]
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carpal tunnel
Registered: 27/06/1999
Posts: 7058
Loc: Pittsburgh, PA
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and even when we know better we like the lie better than the truth. "We" or "she?" Do you buy into her same mentality that, although you know it's a scam, you're okay with it? Or is it just a symbolism thing?
I'm certainly not commenting on your particular situation here, but if you ask me, this whole idea has its root in the concept that one party has to outlay a large sum of cash to another party as some kind of monetary symbol that it's true love. I would argue that one marriage isn't stronger than another just because Groom A gives his wife a 1.5 carat monster diamond and Groom B gives his wife a Diamonique ring from QVC. If that's the case, then the groom might as well just give the woman the cash, and line her pockets instead of supporting the most corrupt industry outside of professional boxing.
I personally welcome the fall of DeBeers, and hope that by the time I'm thinking about marriage, the whole concept of "who gets the biggest and most expensive diamond ring" has disappeared. Even if it was replaced by "who buys his wife the biggest and most expensive car," at least the car is something that's useful, sold at fair market value, and doesn't exploit workers in poorer countries.
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#187255 - 29/10/2003 17:48
Re: How diamonds became valuable
[Re: tonyc]
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addict
Registered: 24/07/2003
Posts: 500
Loc: Colorado, N.A.
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doesn't exploit workers in poorer countries. Guess you hadn't seen this.
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-- DLF
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#187256 - 29/10/2003 17:52
Re: How diamonds became valuable
[Re: DLF]
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carpal tunnel
Registered: 15/08/2000
Posts: 4859
Loc: New Jersey, USA
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Oh, diamonds have also been discovered (in abundance) in Canada as well...
And cultured diamonds...
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Paul Grzelak
200GB with 48MB RAM, Illuminated Buttons and Digital Outputs
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#187257 - 29/10/2003 17:58
Re: How diamonds became valuable
[Re: tonyc]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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"We" or "she?" Do you buy into her same mentality that, although you know it's a scam, you're okay with it? By "we" I meant humans in general. It's not hard (though a bit uncomfortable) for most people to look at their lives and see areas where they continue to operate as if something were true, even if they know (or at least have good reason to believe) that it isn't. I think that DeBeers is a good example of that. I would argue that one marriage isn't stronger than another just because Groom A gives his wife a 1.5 carat monster diamond and Groom B gives his wife a Diamonique ring from QVC. In fact I paid 0$ for my wife's ring; it belonged to my mother. I think (contrary to the second article) that most women would rather have a tiny "real thing" than a large "fake". Of course "real" and "fake" are totally arbitrary, but that's the way it is. It's not really about the money; it is about the comitment. A "fake" ring says, "I think I can get by with this," where a "real" diamond says "you are worth it." As for me, I don't really care either way. I'd have been happy to invest a great deal of money on a perception, because I wasn't spending money on a diamond; it was a token of affection. If one token is worth more than another for whatever reason, then that's what I'm going for (if I can afford it). Personally I think flowers, diamonds, and the like are dumb. They serve no real purpose in my life, and I'd rather get something with a practicle benefit. But for my wife, if those things are what she likes then I have no problem getting them for her because it shows her that I love her. I think Bitt is right though: one day dimonds will become pretty much worthless. However, even then I think wedding rings are going to have value, simply because of the spirit in which they were purchased.
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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#187258 - 29/10/2003 18:32
Re: How diamonds became valuable
[Re: JeffS]
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old hand
Registered: 14/04/2002
Posts: 1172
Loc: Hants, UK
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most women would rather have a tiny "real thing" than a large "fake"
Hmmm.....
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#187260 - 29/10/2003 18:42
Re: How diamonds became valuable
[Re: pgrzelak]
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old hand
Registered: 14/04/2002
Posts: 1172
Loc: Hants, UK
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Oh, diamonds have also been discovered (in abundance) in Canada as well...
They've just discovered more oil round here too - it's likely to become Europe's largest onshore oilfield.
Gareth
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#187261 - 29/10/2003 19:27
Re: How diamonds became valuable
[Re: JeffS]
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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In fact I paid 0$ for my wife's ring; it belonged to my mother. Which, to me, says a hell of a lot more than spending a wad of cash on something without any personal history.
At the same time, it was the DeBeers corp that put the idea to give her a diamond in your mind in the first place.
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Bitt Faulk
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#187262 - 30/10/2003 00:58
Re: How diamonds became valuable
[Re: tonyc]
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carpal tunnel
Registered: 08/03/2000
Posts: 12338
Loc: Sterling, VA
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I have friends who are dating and pretty much going to get married eventually. I remember when he was saying that if he had to spend over a thousand on a ring, he wanted some king of present in return 
It certainly doesn't make too much sense to me. I know why it's important to the recipient, but the cost shouldn't matter. I hope women aren't putting stock in the cost on the diamond over the symbolism. If that's how you prove the standing of your groom, that's a tad depressing.
That said, I know some guys who got other arrangements. The first had a girlfriend who loved rubees. I don't know how much they cost, but aren't they a little less, at least?
The other guy I know had an odd arrangement. Since the girl knew he couldn't afford a ring, she made him do 100 hours of community service instead.
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Matt
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#187263 - 30/10/2003 04:09
Re: How diamonds became valuable
[Re: Dignan]
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pooh-bah
Registered: 09/08/2000
Posts: 2091
Loc: Edinburgh, Scotland
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We did something similar - I bought her a ring and she bought me a nice watch (probably because she hated my geeky touchscreen digital watch with drop down menus and the like )
Now I must say I hate the whole inflated pricing scam, but I do like the way my wife's engagement, wedding and eternity rings look, and she enjoys wearig them - so they were well worth the money. Neither of us were keen on large diamonds, so we went more for the shape and colour of the rings (white and gold) than the sparklies.
More amusingly she has started discussing the possibility of a 3rd child. I have started discussing the possibility of trading in my Impreza Sport for a turbo model, and implied there may be a connection
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Rory
MkIIa, blue lit buttons, memory upgrade, 1Tb in Subaru Forester STi
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#187264 - 30/10/2003 04:13
Re: How diamonds became valuable
[Re: Dignan]
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carpal tunnel
Registered: 13/07/2000
Posts: 4180
Loc: Cambridge, England
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100 hours of community service That's a good result! The usual sentence for marriage is more like 25 years to life -- have you got the number of the guy's lawyer?
Peter
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#187265 - 30/10/2003 06:03
Re: How diamonds became valuable
[Re: wfaulk]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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In fact I paid 0$ for my wife's ring; it belonged to my mother. Which, to me, says a hell of a lot more than spending a wad of cash on something without any personal history. It does, but not everyone has a family ring to use. The only reason I was able to use it was that my parents got divorced, certainly not a desirable condition. At the same time, it was the DeBeers corp that put the idea to give her a diamond in your mind in the first place. It sure was, but that didn't make her want it any less. However, she wasn't one who really cared how much I spent on it; If I'd had to buy her a ring, she would have been excited for whatever I could've afforded at the time.
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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#187266 - 30/10/2003 06:20
Re: How diamonds became valuable
[Re: Dignan]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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It certainly doesn't make too much sense to me. I know why it's important to the recipient, but the cost shouldn't matter. I hope women aren't putting stock in the cost on the diamond over the symbolism. If that's how you prove the standing of your groom, that's a tad depressing. If they are then they're headed for a miserable marriage. If a person makes money the central issue for day one, that's headed for disaster right away. That said, I know some guys who got other arrangements. The first had a girlfriend who loved rubies. I don't know how much they cost, but aren't they a little less, at least? Funny you should say this, because my wife loves rubies. In fact her wedding ring (that complements her engagement ring) has rubies. I've actually heard women say things to her like "I don't like mixed stones on a ring." She just looks at them and says, "it's a good thing this isn't your ring then." She's very proud of her ring! The other guy I know had an odd arrangement. Since the girl knew he couldn't afford a ring, she made him do 100 hours of community service instead. My mom and her second husband bought each other stock! But then, my mom has always been very un-"girly"!
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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#187267 - 30/10/2003 07:49
Re: How diamonds became valuable
[Re: JeffS]
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pooh-bah
Registered: 16/04/2002
Posts: 2011
Loc: Yorkshire UK
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Yea, I tried my wife to be on a moulinex blender, a sandwich toaster and a Nakamachi cassette deck, but she looked distinctly iffy when the vicar handed them over at the altar.
If it was today I'd try: "With this Empeg I thee wed", but for some reason, only diamonds cut the ice, despite the fact that they don't play MP3's or plug into a network!
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Politics and Ideology: Not my bag
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#187268 - 30/10/2003 07:51
Re: How diamonds became valuable
[Re: boxer]
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carpal tunnel
Registered: 13/07/2000
Posts: 4180
Loc: Cambridge, England
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a Nakamachi cassette deck, but she looked distinctly iffy One of the ones with mechanical auto-reverse? Ingrate!
Peter
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#187269 - 30/10/2003 07:57
Re: How diamonds became valuable
[Re: boxer]
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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But wedding rings don't have diamonds, traditionally. It's the engagement ring that does, and it created from whole cloth by DeBeers.
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Bitt Faulk
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#187270 - 30/10/2003 08:20
Re: How diamonds became valuable
[Re: peter]
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pooh-bah
Registered: 16/04/2002
Posts: 2011
Loc: Yorkshire UK
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One of the ones with mechanical auto-reverse
I've gone this way in the past with objects of desire before the Empeg, naming a Revox and a Citroen DS19, but watching one of those decks turn the cassette over was distinctly worth a round of applause - but then, so is watching the tin roof come down on a Mercedes Coupe, but that creates no desire with me at all!
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Politics and Ideology: Not my bag
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#187271 - 30/10/2003 08:49
Re: How diamonds became valuable
[Re: wfaulk]
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old hand
Registered: 17/07/2001
Posts: 721
Loc: Boston, MA USA
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I had this whole 'what are diamonds really "worth" to you' discussion with my best friend. He just got married and I was his best man. When I found out that he spent more than $15,000 on her engagement ring, I almost crapped myself. It is a one carat flawless, rare yes, but I told him that $15K was kind of hard to justify. "wont she still love you even if you gave her something less?" I asked. He told me that the purchase was just as much for him as it was for her, he wanted to give her the symbolism of a flawless diamond, just as much as she liked to receive it.
I suppose if that is your definition of real value, then DeBeers has done a fantastic job.
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//matt
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#187272 - 30/10/2003 09:01
Re: How diamonds became valuable
[Re: wfaulk]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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Well, I just finished reading the article, and I have to say I don’t really begrudge De Beers as much as you seem to, at least as far as creating value for diamonds by altering the public’s perception; in my opinion that’s just good marketing. All marketing is, after all, is trying to create a need in the consumer that the consumer didn’t have before the advertisement. Seems De Beers did that very well (or at least their advertiser did).
We’d probably agree about their strong-arm tactics though, especially where they worked with banks to bankrupt people. It seems to me two things were going on there: 1) a big corporation stomping out the little guy & 2) the little guy investing in something that has only perceptive value, which isn’t a good investment.
Diamond investments are a bad idea, but I still think they’ll hold value for a while in the romantic realm of things. After all, women don’t like them solely because they are rare; they are also pretty to look at. I just spoke to my wife today and asked her about manufactured diamonds. If I could get a superior gem for the same or less money if only it was manufactured, what would she think? She said basically, “I’d love it on anything but my engagement ring.” But since she already has an engagement ring, that’s good for me!
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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#187273 - 30/10/2003 09:03
Re: How diamonds became valuable
[Re: JeffS]
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carpal tunnel
Registered: 25/12/2000
Posts: 16706
Loc: Raleigh, NC US
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I don't have any problem with people thinking they're pretty. But $15,000 pretty?
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Bitt Faulk
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#187274 - 30/10/2003 09:11
Re: How diamonds became valuable
[Re: wfaulk]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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I don't have any problem with people thinking they're pretty. But $15,000 pretty? Yea, that's pretty insane (I think). I can't imagine wearing anything that costs 15K. Not a suite, a watch, or a piece of jewerly. But I'd feel that way regardless of the "real" value of the piece anyway. There are a lot better places that 15K can go.
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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#187275 - 30/10/2003 13:08
Re: How diamonds became valuable
[Re: JeffS]
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addict
Registered: 24/07/2003
Posts: 500
Loc: Colorado, N.A.
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All marketing is, after all, is trying to create a need in the consumer that the consumer didn’t have before the advertisement. And hence you've proven the point: Marketing and advertising are inherently evil.
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-- DLF
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#187277 - 30/10/2003 13:35
Re: How diamonds became valuable
[Re: DLF]
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carpal tunnel
Registered: 14/01/2002
Posts: 2858
Loc: Atlanta, GA
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And hence you've proven the point: Marketing and advertising are inherently evil. No real argument there! You probably detected a slight bit of distain in my phrasing to begin with. However, I do understand it as a normal course of operation within our society, and therefore DeBeers behavior is not unexpected. If we routinely accept psychological manipulation (read: advertisement), it's hard to be too upset with DeBeers for doing it exceptionally well. However, I suppose the reason many of us have empegs and Tivo's is to avoid that kind of psychological manipulation in the first place!
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.
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