this post was submitted on 20 Aug 2023
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Diamonds.
This is pretty common knowledge these days.
I didn't know it.
For my enlightenment, can you tell me how a diamonds monetary worth is properly established so I can check if I'm to pay overprice?
They're all overpriced, diamonds are a scam that's so normalized most people don't realize its a scam.
I have bad signal so I can't find the sources for you, but if you look up something like "diamonds artificial supply limiting" you should find it.
Basically the diamond industry has a stranglehold on the supply of natural diamonds (which are also notoriously mined under horrid conditions - i.e. "blood diamonds") and they artifitially alter the supply/demand ratio by limiting what goes onto market to jack up the price. Naturally, diamonds are actually a very common gemstone, and they can be easily created in a lab. They're just hyper-compressed carbon, after all, and carbon is abundant on earth. Rubys, sapphires, and the like are much naturally rarer, but don't fetch as high a price because of the market manipulation around diamonds.
Not only are blood diamonds mined under bad conditions, they are mined in mines owned/controlled by insurgents and terrorist groups, and then the sale of these diamonds is used to fund the activities of these groups. Watchdog organizations are a lot more careful about blood diamonds these days than they were 20 years ago, but it's still possible to accidentally get ahold of one. That's why it's so bad to buy one and it's why people all over the world made a fuss about them back around 2000 - 2003, because buying one directly funds atrocities in central Africa. They're usually sold cheaper than the monopolized diamonds too.
Don't forget that there used to be literal assassins that would kill you if you tried to sell (as a retailer, obviously the resale by individuals was so small-time they didn't care and hard to track) under the price you were told to sell it.
You as a normal person can't really sell a diamond for anywhere near the price it cost you. Even though almost nothing can damage them.
Gold has a spot price and you can generally sell gold to a jeweller for spot minus a small margin. Not so for diamonds.
Just avoid buying diamond jewelry. They dramatically lose value as soon as you walk out of the jewelry store.
Here's an informative video on the subject: https://youtube.com/watch?v=PYUMKRwJzNg&feature=share9
The short answer is, diamonds are controlled by a cartel with literal warehouses of diamonds kept off the market to maintain artificial scarcity, compounded by very successful marketing to increase the perceived value above actual value, raising demand. If you are buying new diamonds, you are always paying too much, although how much extra varies.