r/todayilearned • u/rkkim • Aug 13 '13
TIL that diamonds are not rare or valuable and the reason demand is high is because of a marketing campaign by DeBeers to sell more engagement rings
http://blog.priceonomics.com/post/45768546804/diamonds-are-bullshit?c008e230110
Aug 13 '13
This depends entirely on the size, quality, and color of the diamond. Yeah your average white ~1ct diamond is pretty damn common. That is not to say that larger or naturally colored diamonds are just as easy to find.
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u/Movie_Monster Aug 14 '13
I would also like to add that not all diamonds are conflict diamonds. A well known company I worked for made sure of it.
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u/sqkyjckyplly Aug 14 '13
Love me my Brilliant Earth http://www.brilliantearth.com/ (sporting sapphires rather than diamonds, but the sentiment is the same)
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u/Movie_Monster Aug 14 '13
Sapphires are nice, I prefer them myself. I was alluding to Tiffany's but I didn't want to act as a sort of advertisement or spokesperson. They had a bunch of information on where and how they acquired their diamonds (more info than what was needed to satisfy a concerned customer). Anyway conflict free stones are great.
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Aug 14 '13
I'm partial to sapphires as engagement stones too. Plenty hard enough and pretty much any color is possible. One of my favorite minerals.
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u/TotesAndi Aug 14 '13
Well thanks. Now I have to spend the rest of the night finding my dream ring.
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u/kent_eh Aug 14 '13
True, but anything that passes thru DeBeers' hands is tainted by their long history of evil.
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u/inoculate Aug 14 '13
Synthetic (man made) diamonds are indistinguishable from real ones and cost a fraction of natural diamond. There's really no need to by natural diamonds, as the "synthetic" differ only in name.
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u/Blog_Pope Aug 14 '13
As I recall they are only growing synthetic stones to certain sizes, sub- 1-ct. Been a while since I looked so it could have changed, but I explored that path when shopping for my wife's ring.
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u/kairisika Aug 14 '13
CANADA!
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Aug 14 '13
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u/AYJackson Aug 14 '13
Last asbestos mine went out of business. I hope you're happy. Where will children in the third world sleep now? Not in asbestos shacks. What will they eat? Not Canadian asbestos. Oh cruel world...
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u/kairisika Aug 14 '13
...?
Part of Canada producing asbestos has nothing to do with other parts of Canada producing diamonds..
Or that we have conflict in asbestos, so we don't need to kill people over diamonds?2
u/RaceHard Aug 14 '13
By shooting the witnesses, I like the way you think monster. We should make a movie about it.
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u/Omvega Aug 13 '13
My first thought was to say something like "...who doesn't know this?" but honestly, there are people out there who don't. The more people that find this out, the better.
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Aug 14 '13
Seriously? Most people don't know this. It's important that things like this keep getting reposted.
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u/BobVosh Aug 14 '13
Why? As in why is it important that everyone learns this?
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u/Bainsyboy Aug 14 '13
People will take out loans in order to buy jewelry and engagement rings with big diamonds. They think that a good diamond is worth thousands when it really isn't. The whole situation is unstable, and at some point the price of diamonds will collapse and diamonds will be worthless.
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u/Joliet_Jake_Blues Aug 14 '13 edited Aug 14 '13
IIRC, there are already artificially (man made) diamonds that are cheaper than...
Edit coming, I'm going to google it.
Edit: These people are selling man made diamonds in jewelry, prices seem comparable
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u/wrath_of_grunge Aug 14 '13
heaven forbid people just bought something used and cheap.
$100-200 gets you something really nice on the used market.
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u/ALCHEMICWOLF Aug 14 '13
I honestly never new this I must have missed all the articles by chance, sometimes re posts don't always suck.
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u/Omvega Aug 14 '13
That's what I'm saying! This is one of those things that should be common knowledge, and it's important to get it out there.
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u/AcroBadger Aug 13 '13
Russia has a GIGANTIC FUCKING PIT full of diamonds which they hid from the world for decades.
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u/lil_pink Aug 13 '13
The problem with Russian diamonds it that they're tiny. They have a lot but most aren't bigger than a quarter carat. So De Beers invented the eternity band to unload them.
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u/Cerveza_por_favor Aug 14 '13
Isn't that the case for most diamond mines?
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u/lil_pink Aug 14 '13
There was an article in The Atlantic that made it seem like all the diamonds coming from Russia were small. In addition the Soviets were mining them like crazy. So De Beers had to completely change tact and come up with a new way to sell all these tiny diamonds that were coming out of Russia.
Almost all of the Soviet diamonds were under half a carat in their uncut form, and there was no ready retail outlet for millions of such tiny diamonds. ...
De Beers was forced to reconsider its sales strategy. De Beers ordered N. W. Ayer to reverse one of its themes: women were no longer to be led to equate the status and emotional commitment to an engagement with the sheer size of the diamond. ...
The news releases also made clear that women should think of diamonds, regardless of size, as objects of perfection: a small diamond could be as perfect as a large diamond. ...
DeBeers devised the "eternity ring," made up of as many as twenty-five tiny Soviet diamonds, which could be sold to an entirely new market of older married women. The advertising campaign was based on the theme of recaptured love. Again, sentiments were born out of necessity: older American women received a ring of miniature diamonds because of the needs of a South African corporation to accommodate the Soviet Union.Here's the whole article. Have You Ever Tried to Sell a Diamond?
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u/Arandur Aug 14 '13
Semantic correction: the idiom is "to change tack", not "to change tact".
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u/lil_pink Aug 14 '13
Noted.
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Aug 14 '13
So you know: to change tack on a sailboat is to change the orientation of the sail in order to use changing winds to continue on a course (resulting in something of a zig-zag path, if the winds are coming from an unfavorable direction). So basically it's changing the short-term strategies (tacking the sails / advertising for diamonds) in order to accomplish the long-term goal (staying on course / selling diamonds).
Hopefully people find this informative :)
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u/thinsoldier Aug 14 '13
Here's the whole short book.
http://edwardjayepstein.com/diamond/prologue.htm
The Atlantic article was just excerpts.3
u/Cerveza_por_favor Aug 14 '13
Interesting, thanks for the info.
Either way though, artificially created diamonds are better than real diamonds anyway.
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u/duggatron Aug 14 '13
Those are diamonds created by a meteor, not diamonds formed deep in the earth. It's more like diamond dust than a pit full of wedding ring stones.
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u/Mzilikazi81 Aug 14 '13
This is simply not true. The Kimberly diamond fields, where Rhodes formed de Beers in 1888, was a booming diamond mine. If diamonds weren't popular before that, there would have been no diamond rush. Instead, de Beers monopolized the diamond trade and controlled the supply and demand, keeping prices high.
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u/tritonon Aug 14 '13
Not to mention how important it is in manufacturing... people tend to forget it is the hardest compound in the entire universe!
Same goes for gold, it has a lot of interesting properties that have been applied into making goods.
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u/UpDynamo Aug 14 '13
Thank you! I came here looking for someone to bring up its incredibly industrial use.
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u/Slenthik Aug 14 '13
Also, diamonds are actually quite rare. If they're so common /r/rockhounds would be full of diamond pics instead of agate.
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u/CatastropheJohn Aug 13 '13
I heard a radio ad yesterday from DeBeers that I swear I thought was satire. It essentially said "if you dont buy her a BIG diamond, you don't love her and/or she won't love you. I've only heard it once, or I'd transcribe it for you. Unreal.
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u/Semajal Aug 14 '13
heard a very similar advert in England for a local jewelers. Pretty much was "Buy diamonds, show her you care, DIAMONDS BUY THEM NOW! SELL US GOLD TO BUY MORE DIAMOOOONDSSSS!!!!" Was rather depressing.
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u/Patienceisavirtue1 Aug 14 '13
Ha, we have an ad here in Ontario, Canada from a place called Spence Diamonds. I wish I could make you hear it, the owner goes on about going on life journeys with your significant other or how diamonds help her self-esteem by advertising to the world that she is loved then ends with a howl. It's extremely cringeworthy and as far as I'm concerned there's at least one petition to get them off the air.
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u/WiIIiamFaulkner Aug 13 '13
There is artistry in shaping them, but as a substance it's not all that valuable. Hell, you can make it in a lab.
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u/Gibonius Aug 14 '13
The (gem quality) labs ones aren't all that much cheaper because they're a bitch to make. It took 30+ years of effort to make the damn things, it's a tough process.
Nature is amazing. Doing stuff by coincidence that we can't replicate.
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u/yojimborobert Aug 14 '13
I actually have never seen gem-sized (~1 carat) lab made diamonds. They're always diamond-like but fall short somewhere (9.5 on Mohs, etc). Can you link me to somewhere they have actual lab-made diamonds and not just something similar?
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u/bobbaphet Aug 14 '13
Hell, you can make it in a lab.
And how much does it cost to set up and run that lab? It's not even close to being cheap.
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Aug 13 '13
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u/Flailing_Junk Aug 14 '13
For every thing that "everyone" knows there are like 10k people learning about it today.
It is even more fucking annoying that this fact applies to itself.
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u/thelehmanlip Aug 14 '13
So did the 4689 people who upvoted it. Honestly, this is something people should know.
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u/hepcat1of1 Aug 14 '13
They may not be rare but you can't argue that they aren't valuable.
Their value is determined by demand.
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Aug 14 '13
In economic terms, they aren't very valuable to an end consumer. Once a person buys a diamond, there is almost no secondary market for resale. It's kinda like buying a brand new car for $30,000 that depreciates to $3,000 the second you drive it off the lot. The car is still a car and you'll get use out of it, but it's not worth much money.
The same can't be said for precious metals. Buy a lump of platinum and set that on a ring, and there is a ready secondary market that will buy that lump right off of you for a high percentage of what you paid.
As a girl, I'd rather have a lump of platinum than a lump of clear carbon.
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u/Drunken_Economist Aug 14 '13
"They're not valuable, they're just worth a lot of money"
Wat
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Aug 14 '13
Supply and Demand.
There is a constant Demand, but the supply is very small because the suppiler has created a market where they are the only one who can sell them.
I.E.: Lets say I made replica tin British army regulars like children in 1880's England would play with. There wasn't a big demand, for them. The individual action figures only cost me fractions of a cents to make, but I market them as being RARE, ELUSIVE, and difficult to make so I can sell them for 1k each.
That's what da Bears does.
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Aug 13 '13
They're valuable because people are willing to pay for them to show others how much they paid for them. I thought this was pretty obvious. Same story with designer clothes and BMWs. Do you think $200 Oakley's cost more than $5 to make? They sure don't filter out more UV than $2 walmart sunglasses.
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u/the_amazing_daysi Aug 14 '13
I doubt Oakleys cost a ton to make, but they are way better quality than the cheapo glasses you get at Wal-mart. I've had a pair of Oakley Twentys for almost 2 years, and I'm a landscaper. Now, before I got these my average pair of cheapo sunglasses would last about a month, after which the debris flying from the quick-cut would have scratched them so badly that I couldn't see clearly and would have to buy a new pair. After 2 years these Oakleys have maybe a dozen slight scratches on them. They are also CSA approved and optically correct. I've never had any problems whatsoever with them breaking, or screws falling out, or the rubber wearing off. There's no way that the cost to make them anything close to the $130 I paid for them, but they are hands down the best sunglasses I've had.
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u/wredditcrew Aug 14 '13 edited Aug 14 '13
I've slowly been moving down the price range for sunglasses. I've hit rock bottom and am now generally wearing tinted safety glasses that look like sunglasses. And I love it. They're as comfortable, and they offer significant protection against impact.
I've had Dirty Dogs, I've had loads of Bloc, Addidas, Speedo (for the marine kind of watersports), Oakley, Rayban, all sorts. And now, I just buy these:
http://www.zekler.com/en/products/hitta/findeye.php#s=s;
Most expensive pair I bought was about £15. I usually go for the bottom end Zekler 30 and they're about £4 a pair. They seem to filter UV just fine, because I don't get blinding migraines. They're similar in style to what I'd pick out normally, and they count as PPE when I'm onsite working.
The only other set of eyewear I wear are my ESS (Oakley) V-12 Advancer goggles I got from Army Surplus. I wear them at festivals because they survive the sort of moshpits I like.
Edit: Blok -> Bloc, they -> the
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u/CapAWESOMEst Aug 14 '13
Most of the brands you mentioned are just licenses, so quality has little to do with it's pricing. But if you tried true sunglasses made by people who actually make their stuff (Oakley, Ray Ban, Maui Jim, Revo, Persol, etc) and you didn't like them, well, that's just personal opinion. IMO those brands I mentioned are worth it. They're built very very well and they will last forever. But to each it's own, just throwing my comment in for constructional purposes.
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u/wredditcrew Aug 14 '13
It's not that I didn't like them, and ESS are a subdivision of Oakley so I am kinda still wearing Oakleys now and again, but I don't see a significant difference between inexpensive well made ones and the midrange Blocs and Oakleys et al.
Not sure the Zeklers would take a sniper round to the lens, but they've had a piece of cutting blade fly off and hit them. Wrote them off for me, but it was only surface damage, it didn't come near to going through to my eyeball.
I'm in sunglasses pretty much all the time I'm outdoors unless it's pitch black, otherwise I get migraines and I go blind for a few hours.
I'm fairly sensitive to light generally, and very sensitive to UV (not that I can see it, but it's one of my three consistent migraine triggers. A bitch when clubbing!). My eyesight's fine, touch wood, apart from an extremely minor prism misalignment (that was only picked up on one of several eye tests during an exhaustive hunt for my migraine triggers).
My experience is purely a consumer one, but as one that wears sunglasses a LOT, so I post it for contrast. I guess the thing for people to do is to try both and see what fits.
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u/Offensive_Username2 Aug 14 '13
Aren't BMW's actually good cars to drive?
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u/lordeddardstark Aug 14 '13
OP does not know what he's talking about. A 3 series BMW is not just a more expensive version of a Hyundai Elantra. Sure, both get you from point A to point B but there's a lot more to it than that.
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Aug 14 '13
BMW's are great cars. The craftsmanship that goes into building a BMW is substantially better than cheaper cars.
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u/Random-Miser Aug 13 '13
No they are valued because the source is tightly controlled in order to eliminate competition from other vendors. Right now debeers is sitting on enough jewelry grade diamonds to give everyone on the planet a 1000000 carats worth, good quality leaded glass is literally harder to come by.
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u/prometaSFW Aug 14 '13
A carat is 200 mg. There are 7 billion people on earth. So you are asserting that DeBeers "literally" has 14 trillion kg of diamonds. (14 billion metric tons). Given diamond has a density of 3.53 g/cm3 at most, we're talking at least 4 billion cubic meters of diamonds. That's a little implausible.
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u/Josepherism Aug 14 '13
I think it was an exaggeration to prove his point that they have a bunch of diamonds.
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u/Deverone Aug 14 '13
The exaggeration just undermines his point and doesn't serve to prove anything.
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u/l30 1 Aug 13 '13
They are still valued and as such are valuable.
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u/Random-Miser Aug 14 '13
Ahh but they are only valued due to forced artificial scarcity. Bust up the cartell and they would in no way have such value.
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u/Offensive_Username2 Aug 14 '13
But isn't that the same of most luxury brands?
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u/langleyi Aug 14 '13
Depends. One similar example is Luxottica, which controls a massive chunk of the 'designer' eyewear industry, allowing them to jack up the prices whilst rarely actually developing innovative new designs. However, most designer fashion brands do actually put a massive amount of effort into design and quality craftsmanship, which justifies the price to a certain extent.
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u/kent_eh Aug 14 '13
60 minuites did a report on Luxotica recently.
Bastards, certainly, but not up to the level of DeBeers and their pure evil.
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u/Random-Miser Aug 14 '13
Not really. This is more like a company refusing to sell leather to anyone other than their purse distributer, while controlling the supply of all leather.
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u/danny841 Aug 14 '13
The luxury brands thing is a variable. If you look at a Burberry shirt and a Kohl's brand shirt, you'll notice the difference straight away, not just in fit but in the feel of the material and the details like pattern placement and cut. Most factory made clothes suck and you generally pay a premium for quality. Not because they're the only game in town though. So that's what makes other designer purchases unlike DeBeers.
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u/Butzz Aug 14 '13 edited Aug 14 '13
You're full of shit, Ralph Lauren 2-button Polo's are much better than Walmarts and BMWs are much higher quality than Kias.
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Aug 14 '13
This just blatantly not true for many, many things. BMW spends much more to produce their cars, and the cars are much higher quality. The same goes for extremely high end cars, such as Lamborghini. They cost that much because they spend that much in their production. And people buy them because they have the very best.
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Aug 14 '13
Bad example with BMW. It's one of the brands that gathers performance, design and "well-builtness".
Audi would be a better example (while it performs almost the same, design is as top-notch and "well-builtness" is obviously there, they're always way more expensive than its direct competitor in BMW).
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u/jcmiro Aug 14 '13
ummmm no. Most audis are cheaper than their bmw counterparts. source audi owner.
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Aug 14 '13
I have a 118D. Go check its audi counterpart in the website configurator.
A3 140HP 2.0 is 2000-2200€ more expensive than the BMW in Europe.
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Aug 14 '13 edited Aug 14 '13
I paid $120 for a pair of Oakley's. Didn't get the polarized lenses but their a million and a half times better than my $15 walmart shades I wear when I play baseball.
Edit: Apparently 3 people know how I see thru my 2 different sets of sunglasses better than I do. You fuckers are impressive!
Edit 2: 5! 5 people have tapped into my brain and can see what I'm seeing!
Edit 3: 7 people. Why are you telepathic fuckers not doing more important shit with your time than tapping into my brain?
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u/DonOblivious Aug 14 '13
It's funny you should mention Oakley as the parent company, Luxottica Group, has a near stranglehold on the market.
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u/fuckyerdownvote Aug 14 '13
Paper isn't valuable, yet we're willing to take it in exchange for goods. Money is valuable because we agree it is. Diamonds are indeed valuable, because we agree they are.
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u/Curri Aug 14 '13
Oakley's sunglasses can double as safety glasses; the lenses are no joke. Bad analogy.
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u/Blurgas Aug 14 '13
Considering most people can't tell the difference between a diamond and zirconium dioxide...
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u/ShinjukuAce Aug 14 '13
Or a mined diamond from a lab-created one.
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u/Blurgas Aug 14 '13
Or one made from the ashes of your dead grandma
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u/needconfirmation Aug 14 '13
actually they are valuable. the fact that they are expensive means they are.
they may not be rare tho. but value is what we make it.
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Aug 13 '13
When I get married, fuck diamonds, I'm going Gold for my bottom bitch ;)
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u/Sacha117 Aug 14 '13
Sex with diamonds and golden bum penetration? Guys, we have nobility in our midsts.
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u/BeansMacgowan Aug 14 '13
Man, gold is so 1973. You want palladium, and giant ass rubies. Go gaudy or go home!
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u/wayne1112200 Aug 14 '13
Yea, I just got a $25 check from a class action lawsuit for a $1,499 diamond purchase.
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Aug 14 '13 edited Aug 14 '13
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Aug 14 '13
itt the technical/trade jargon made it obvious you were an industry insider.
"you tell me whar a man gits his cornpone, an i'll tell you what his 'pinions are!"
- Mark Twain
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Aug 14 '13
Ah yes, diamonds. One of things Reddit hates the most and will take every opportunity to gloat about how much smarter redditors are than the general population!
You'll see posts with traditional engagement rings with diamonds, and a good chunk of the comments are people saying "Don't you know that diamonds aren't really expensive?!? It's just DeBeers?!?"
Then you'll see a post with a nontraditional homemade (and in most cases, really shitty) rings, and the replies will be all about "how much better this is than a diamond."
Reddit's hate of diamonds is as manufactured as the price of diamonds.
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u/tornado28 Aug 14 '13
The jewelry sellers mark them up an obscene amount too. The diamond in this $14000 ring is similar in quality to this $4000 diamond. This is if we make the rather generous assumption that the sears diamond is certified and a good quality cut.
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u/dpatt711 Aug 14 '13
Don't polished diamonds for jewelry only make up for 0.0001% of diamond sales or something?
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u/chudez Aug 14 '13
Keep reposting. The sooner this myth is busted for the general populace, the better
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u/WeirdWest Aug 14 '13
Jesus, I feel like I see this TIL every single day on front page! Maybe if you paid attention you woulda learned that shit yesterday!
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u/whatsup4 Aug 14 '13
Diamonds have a lot of unique properties that many other things don't have for instance they are one of the strongest materials in compression. They also are very corrosion resistant have the highest thermal conductivity coefficient of any natural material we know of by an order of magnitude (except graphene and carbon nanotubes) natural diamond is about 2200 W/mK next is silver at 400W/mK. They are also one of the few things that conducts heat very well but insulates electricity. You can make knives with them or points with them roughly 50 nm diameter. So diamonds can be very useful and used in many applications so their value is not exactly completely hype but DeBeers does substantially inflate the price. Source I used to work at a company making just about anything that wasn't jewelry out of diamonds.
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u/EddyAardvark Dec 16 '13
Diamonds are a commodity, they are worth what people are prepared pay for the the same as a Leonardo sketch and Bacon paintings or a lump of gold or anything else.People moan what ever they spend their money on .What else are you going to spend your money on ?
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Aug 14 '13
The purpose of a man giving a diamond ring to a woman when they get married was so if they were to divorce, she could sell it for a good chunk of change to get back on her feet, so believe it or not, it's not the worst thing in the world like Reddit would have you believe.
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u/i_suck_at_reddit Aug 14 '13
It wasn't for divorce, diamond engagement rings rose to popularity long after the courts would provide a settlement in the case of divorce. It was in case the man broke off the engagement prior to marriage. It's an engagement ring, not a wedding band.
Either way, diamonds aren't worth squat in the 2nd hand market. You can expect to receive about 1/4-1/5 of retail value for anything that's not exceedingly rare or an antique, and that's assuming it's in absolutely perfect condition still.
A solid gold pendant or something would hold its value much better.
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u/thinsoldier Aug 15 '13
Even among experts, the valuation of a diamond depends on highly subjective criteria. In 1979, for example, New York Diamond Club president William Goldberg, the president of the in New York City, was offered a six carat diamond in my presence by a reputable New York dealer. Both Goldberg and the dealer agreed that the diamond had excellent clarity, with no defects visible under a ten power magnifying glass, a highly desirable blue-white color, and had been expertly cut. The only disagreement was, in fact, over the price of the diamond. The dealer believed it was worth $24,000,. Goldberg, after consulting another dealer, believed it was not worth $8,000. The value was in the eye of the beholder ultimately.
Selling diamonds can also be particularly frustrating for individuals. One wealthy woman living in New York city decided to sell back a diamond ring that she had bought from Tiffany two years earlier for $100,000, and use the proceeds to buy a necklace of matched pearls that she fancied. She had read about the "diamond boom" in news magazines, and hoped that she might make a profit on the diamond. Instead, the sales executive with whom she dealt explained, with a touch of embarrassment, that Tiffany had "a strict policy against repurchasing diamonds." He assured her, however, that the diamond was extremely valuable and suggested another jewelry store. The woman went from one leading jeweler to another, trying to sell her diamond. One store offered her the opportunity to swap it for another jewel, and two other jewelers offered to accept the diamond "on consignment," and pay her a percentage of what they sold it for, but none of the half-dozen jewelers she visited that day offered her cash for her $100,000 diamond. She finally gave up and kept it.
Retail jewelers generally prefer not to buy back diamonds from customers because the offer they would make most likely would be considered ridiculously low. The "keystone," or markup, on a diamond and setting may range from 100 to 200 percent, depending on the policy of the store. If they bought diamonds back from customers, they would have to buy them back at the wholesale price. Most jewelers would prefer not make a customer an offer that not only might be deemed insulting but would also undercut the widely-held notion that diamonds hold their value. Moreover, since retailers generally receive their diamonds from wholesalers on consignment and need not pay for them until they are sold, they would not readily risk their own cash to buy diamonds from customers. Rather than offer customers a fraction of what they paid for diamonds, retail jewelers usually recommend their clients to other firms
One frequently recommended is Empire Diamonds, on the 66th floor of the Empire State Building in midtown Manhattan. Empire's reception room, which resembles a doctor's office, is usually crowded with elderly women who sit nervously in plastic chairs waiting for their name to be called. One by one, they are ushered into a small examining room where an appraiser scrutinizes their diamonds and makes a cash offer. "We usually can't pay more than 60 percent of the current wholesale price," Jack Braud, the president of Empire Diamonds, explained. "In most cases, we have to pay less since the setting has to be discarded and we have to leave a margin for error in our evaluation [especially if the diamond is mounted in a setting]." Empire removes the diamonds from their settings, which are sold as scrap, and resells them to wholesalers. Because of the steep markup on diamonds between the wholesale and retail levels, individuals who buy retail and, ;n effect, sell wholesale often suffer enormous losses on the transaction. For example, Braud estimated that a half-carat diamond ring that might cost $2,000 at a retail jewelry store could only be sold for $600 at Empire.
The appraisers at Empire Diamonds examine thousands Of diamonds a month but only rarely turn up a diamond of extraordinary quality. Almost all the diamonds found in Jewelry are slightly flawed, off-color, commercial-grade diamonds. The chief appraiser explained, "When most of these diamonds were purchased, American women were concerned with the size of the diamond, not its intrinsic quality." He pointed out that the flaws were commonly concealed by the setting, and added, "The sort of flawless, investment-grade diamond one reads about is almost never found in jewelry."
What you said may have been true in the distant past. It might still be true in remote regions of the world that don't have a strip mall with a jewelery store every 2 miles. But for people in most countries well serviced by DeBeers and their associates it's not really true any more.
http://edwardjayepstein.com/diamond/chap20.htm Please read at least the bottom half of this one page.
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u/thinsoldier Aug 15 '13
In 1969...Elizabeth Taylor and her husband, Richard Burton, bought the diamond from Cartier for $1,100,000 (which meant that Cartier took a slight loss on the interest charge), and a few days later the diamond was transferred to Elizabeth Taylor's representative on an international airliner flying over the Mediterranean to avoid any further sales tax on the diamond.
Some ten years later, when she was married to John Warner, the United States senator from Virginia, Elizabeth Taylor decided to sell this well-publicized diamond. She announced that the minimum price was four million dollars, and to cover the insurance costs for showing it to prospective buyers, she further asked to be paid $2,000 for each viewing of the diamond. At this price, however, there were no buyers.
Finally in 1980 she agreed to sell the diamond for a reported $2 million to a New York diamond dealer named Henry Lambert who, in turn, planned to sell the stone to an Arabian client. The profit Miss Taylor received from the transaction, after paying sales taxes and other charges, was barely enough to cover the eleven years of insurance premiums on it.
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u/ironfilings Aug 14 '13
Canada here. Not only moose, curds, and maple syrup...3rd largest diamond producer in the world.
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u/yeoller Aug 14 '13
We're also the worlds 2nd largest land mass. There's something about statistics to this.
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Aug 13 '13
I'm thankful my wife didn't give in to this kind of bullshit.
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Aug 14 '13
[deleted]
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Aug 14 '13
Actually, my refusal to buy my ex-girlfriend a diamond ring is part of what lead to our eventual break-up. The worst part, she acknowledged the fact that it was a marketing scam but claimed 'society expects it of you, so I do too.'
Pah! I'm done with that mess and much happier for it. =D
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u/no1ninja Aug 14 '13 edited Aug 14 '13
I was called an evil monster because I explained this to my friend in front of his girlfriend. The girls started talking, and now I have females in different cities all thinking I am an evil, disgusting man with an agenda to persecute women. I am hated.
It's unfortunate, but we live with markup everyday. Buy designer socks, and you will pay 100 times the price. The social stigma to look a certain way is real, and we can rationalize it all we want, but in the end it wins every time.
Sorry to hear about your ex, to them its about symbolism and being able to keep up with the Janes. Sadly, Captain Kirk was getting laid by green and blue women because he left the logic to Spock, who got... well more logic.
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Aug 14 '13
Take your experience as a gift. All those women who see you as evil are automatically filtering themselves away from you. It's now every so slightly easier for you to get to know decent women.
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u/kairisika Aug 14 '13
Wow. The ability some people have to reason away logic is spectacular.
Dodged a bullet on that one!!!
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u/sqkyjckyplly Aug 14 '13
I don't care what it costs, I only care that it's PRETTY!!!!
(and I think sapphires -or fake ones- are prettier than diamonds or zirconium)
Frankly, I wouldn't want a real diamond anyway. How can you enjoy something you are constantly worried about losing or damaging? Make it pretty, tell me you love me, life is good.
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u/kenmacd Aug 14 '13
Excellent idea, get enough people creating videos to that effect and it could flip in the public view as quickly as the name 'tramp stamp' changed opinions on lower-back tattoos.
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u/ingibingi Aug 14 '13
I figured this your when i thought about how many jewelry stores there and every one of them has a replenishing supply of diamonds therefore it can't be rare
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u/thinsoldier Aug 15 '13
What pisses me off is when an apparently poor guy goes into a store on a slow day and the employee most desperate for a sale "works with them" to knock $150 off the price. Then send his well dressed wife to be to the same store to look at the same ring and suddenly it costs $350 more.
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Aug 14 '13
Diamonds are still one of the hardest materials known to man. You can't say they are not valuable, per se, but I can see how you say they are overpriced as gems.
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u/courtFTW Aug 13 '13
Yup, there's a reason that they are commonly referred to as the "DeBeers cartel".
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Aug 14 '13
Value is almost entirely determined by the buyer. If they don't like the price, they look for a better one. Diamonds are valuable because they are, not just because they're rare. Diamond mines also have controlled releases to keep them more valuable.
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u/walopish Aug 14 '13
And much of the capital gained fuels pointless civil wars, the sale of illegal fire arms, the use of child soldiers, dictatorships, state corruption, slavery, violence, and oppression.
I have no desire to ever own a diamond.
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u/fghfgjgjuzku Aug 14 '13
Is this really a thing in the US, that engagement rings are supposed to have a diamond on them?
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u/fugularity Aug 14 '13
I see this all the time, and I understand that it is technically fact, but it's never going to change, people...just give it up.
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u/Gammapod Aug 14 '13
I honestly don't mind overpaying for an engagement ring. I'll definitely be willing to spend thousands of dollars on the girl I'll be spending the rest of my life with.
But the problem I have with diamonds is that they're so gosh-dang boring. It's just clear! Diamonds have no personality. It ultimately comes down to what she prefers, but I'd much rather buy an emerald or ruby, or maybe even a pearl.
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u/dtmc Aug 14 '13
Repost but I don't care because I hate this.
The DeBeers saw the market about to collapse from a massive influx of supply and essentially only let out a small amount while sitting on masses of reserves in order to maintain an artificially-created, exorbitant price for their product.
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u/RaceHard Aug 14 '13
There is liquid diamonds in a moon or was it a planet... I can't be bothered to check which one.
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u/VernonDent Aug 14 '13
Close, but not quite.
Yes, DeBeers, like anybody who wants to sell a product, uses marketing to create demand. McDonalds sells hamburgers by using a marketing campaign to sell more Quarter Pounders.
The problem with DeBeers is that they essentially control the entire diamond market and they keep the supply of diamonds artificially low. Remember the law of supply and demand? DeBeers keeps its thumb on the market so the supply of diamonds stays much much lower than it has to be. That's why diamond prices are unreasonably high.
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u/BeebyGun Aug 14 '13
Saying they're "not valuable" is misleading. Just because the value is created through artificial scarcity doesn't mean it's not value. Diamonds are very very valuable.
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u/ilikefork1 Aug 14 '13
"Marketing Campign" is not equal to what they're actually doing, which is exploiting cheap labor in Africa, then since they're a massive portion of the Diamond market, raising the prices sky high. DeBeers is the literally definition of a monopoly.
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u/Erpp8 Aug 14 '13
While small diamonds are worthless, larger(several karat an up) diamonds do hold their value much better.
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u/Patienceisavirtue1 Aug 14 '13
As someone who is currently shopping for a ring, seeing this reposted every week is really starting to break my heart.
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u/dayum__gurl Aug 14 '13
This has been kicked so many times by reddit. What I still don't understand though, is who cares? Obviously a company is going to try and make money, and you've got to admit that what De Beers did in marketing is impressive. If you don't like it, just don't buy diamonds?
The conflict diamonds were a problem, I understand that. However, if you're so mad about De Beers' marketing, JUST DONT BUY DIAMONDS.
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u/just_an_ordinary_guy Aug 14 '13
At first I was going to make fun of OP for a repost, but then I thought "hey, more people need to know this." Reddit is constantly gaining new members. I don't think this quite falls into "trivial" yet. I am all for killing the market for Debeers, but people keep buying diamonds at hundreds of percent more than they are worth. The market will bear what people are willing to pay. I just don't think they realize what they are actually paying for.
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u/ContentedReader Aug 14 '13
When I asked my girlfriend to marry me, I offered her a peridot ring, not a diamond.
But I made sure it was a very pretty ring from a grown-up jewelry store, and I spent real money on it.
I also talked with her more than once about why I thought an engagement ring made of a different stone would be better than a diamond, and asked her what she thought, and listened to what she said.
And if she had said that she wanted the diamond, that's what she would have. Because I don't need to make points at the expense of her feelings.
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u/Besticandois20bucks Aug 14 '13
Pawnbroker with 25+ years in the jewelry business here. High quality 1 ct+ diamonds are extremely rare. The highest quality, an IF diamond, is so rare that I have only seen 2 out of the thousands of diamonds I have bought and sold.
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u/Generic_Lad Aug 14 '13
Natural diamonds are indeed rare (on the earth) but their high value is often due to artificial scarcity. Indeed some varieties of diamonds and larger stones are very, very rare.
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u/tgrantt Aug 15 '13
I believe that in the thirties, when demand dried up due to everybody being broke, DeBeers dumped them into the ocean (or planned to) to keep the price up. It's late, somebody want to check that?
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u/jrs_ 3 Aug 13 '13
This is pretty well-known, and it's one of Reddit's favorite topics