Sunday, January 14, 2007

Cartels Aren't Forever

The diamonds above are real - but they are cultured diamonds that were produced in a laboratory, and might cost up to 75% less than similar diamonds from the DeBeers diamond cartel, and some have fewer flaws than natural diamonds. From today's WSJ:

"The $143 billion jewelry business -- and the would-be fianc├ęs, Valentines and lovers of bling that it caters to -- are facing a shakeup. Lab-produced diamonds, once suitable only for industrial use, are being produced with color and clarity that match -- or exceed -- the quality of diamonds dug out of the earth. These lab-made diamonds have begun trickling into retailers at prices below those for natural diamonds of similar size and sparkle.

The long-term threat to established diamond producers: that mined diamonds could suffer the same fate as naturally occurring pearls. Cultured pearls, made when a small bead is inserted into a mollusk and grown, destroyed the natural pearl industry. Cultured pearls now account for more than 95% of all pearls sold globally, according to estimates by Gem World International, a research firm."

Read the WSJ article

"The larger question is whether lab-grown diamonds will gain acceptance with consumers....."

Prediction: Given the general acceptance, by both men and women, of breast implants, isn't the general acceptance of "fake diamonds" probably inevitable? After all, wouldn't it be irrational behavior to accept synthetic, artificial breasts, but reject synthetic artifical diamonds? Comments welcome.


At 1/14/2007 8:52 AM, Anonymous Robert Knutsson said...

If cultured diamonds are cheaper to make and have the same clarity and color as "real" diamonds they're bound to win the market over.

With breast implants you can tell the difference from the real thing (by a discerning eye, or if you knew the person pre-op), but with diamonds it will be practically impossible. Fake diamonds will, thus, be far more accepted (and more quickly too).

At 1/14/2007 3:54 PM, Anonymous Anonymous said...

Are you saying that breast implants are not accepted? You wouldn't know it by all of the Hollywood stars!

At 1/16/2007 3:50 PM, Anonymous lex gibson said...

I'd guess that with diamonds becoming cheaper, they'll become less useful for jewelry gifts - they will cease to be a signal of commitment. Diamonds are already fairly common now, and only the cartelization keeps the supplyas low and the prices as high as they are.

The question is then what will replace them for commitment signalling. At a guess, saphires - prettier, and, I think, rarer than diamonds. If it weren't for the long running ad offensive by deBeers, this would likely have already happened.


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