Sunday, December 17, 2006

More on the Economics of Diamonds

From an article in today's NY Times, Measuring a Diamond’s True Price:

"The lust for that glittering gravel, extending unbroken from African thieves to British royals to domestic Bridezillas — is manufactured. Hard carbon, as even Nicky Oppenheimer, the charming chairman of DeBeers, has admitted, has no intrinsic value except as grit.

DeBeers, which manages the cartel that has kept diamond prices up far more efficiently than OPEC ever did with oil, fosters that romance. It has run the “A Diamond Is Forever” ads since 1948 and still quietly advises gullible grooms that it is “customary” to spend two months’ salary on a ring.

I got married this month, and my long-suffering bride was kind enough to go along with my refusal to buy a diamond: she has an opal engagement ring and a sapphire wedding ring."

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