{"id":1506,"date":"2013-02-12T14:51:49","date_gmt":"2013-02-12T09:21:49","guid":{"rendered":"http:\/\/teekhapan.wordpress.com\/?p=1506"},"modified":"2013-02-12T14:51:49","modified_gmt":"2013-02-12T09:21:49","slug":"valentine-days-alert-why-diamonds-are-not-a-girls-best-friend","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2013\/02\/12\/valentine-days-alert-why-diamonds-are-not-a-girls-best-friend\/","title":{"rendered":"Valentine Day\u2019s alert: Why diamonds are not a girl\u2019s best friend"},"content":{"rendered":"

\u00a0\"valentine\"<\/a><\/b>
\nVivek Kaul<\/strong>
\n\u201cSo let\u2019s watch\u00a0Gentlemen Prefer Blondes,<\/i>\u201d she said the other day.
\nKnowing her taste in movies did not go beyond Salman Khan beating up the baddies, I was left wondering why did she suddenly want to watch a nearly 60 year old Hollywood film? But then her statements could be disguised questions at times and so I thought its best not to cross question.
\n\u201cYes, sure why not,\u201d I replied. \u201cLet me get the DVD out.\u201d
\nAs I tried searching for the DVD, it suddenly occurred to me, why she wanted to watch the movie. The movie had the sexy Marilyn Monroe crooning \u201cDiamond\u2019s are a girl\u2019s best friend\u201d\u00a0<\/i>and Valentine\u2019s Day was round the corner. So it was her idea of giving me a hint about the stone she badly wanted.
\n\u201cWell, I really can\u2019t find the DVD,\u201d I said. \u201cGuess you must have put it away when you cleaned a few weeks back.\u201d
\nNot the one to give up so easily \u201clet me look for it,\u201d she said, and found the DVD in a few minutes. \u00a0And at that moment I thought it was best to get to the point straight away.
\n\u201cSo you really want that stone?\u201d I asked.
\n\u201cDon\u2019t call it a stone, dear,\u201d she replied. \u201cIt\u2019s a crystal clear white diamond which is forever.\u201d
\n\u201cGuess you have been reading the entertainment supplements of newspapers a way too carefully over the last few days.\u201d
\n\u201cYes I need to get my sales pitch right,\u201d she replied rather blatantly.
\n\u201cBut you know\u00a0na\u00a0<\/i>there are problems with diamonds?\u201d
\n\u201cWhat problems?\u201d
\n\u201cWell, for one they are very easy to buy but very difficult to sell.\u201d
\n\u201cNow since when did something which is easy to buy become a problem,\u201d she replied, ignoring the more important part of the statement.
\n\u201cSelling gold or silver is very easy. But most jewellers do not buy back diamonds that they did not sell. Also, even if they do decide to buy they offer around 75-85% of the prevailing price.\u201d
\n\u201cOh, is that really the case?\u201d
\n\u201cYes. You see ascertaining whether a diamond is really a diamond is not a cakewalk and is an expert\u2019s job, especially in a day and age when artificial diamonds look as good as the real thing, if not better. This is something that cannot be easily ascertained as is the case with gold.\u201d
\n\u201cSo?\u201d
\n\u201cHence, the easiest way for a jeweller to operate is to simply not buy anything that he hasn\u2019t sold. At times jewellers agree to buy diamonds only if the customer agrees to buy a diamond of higher value from them.\u201d
\n\u201cSo what is the problem?\u201d she asked, not getting the point. \u201cWe can always buy a diamond of a higher value. I mean we need to move up in life.\u201d
\nNow that was getting into the realm of the deeply philosophical. \u201cSince when did moving up in life become equal to buying diamonds?\u201d I wondered. But then I wasn\u2019t the kind to give up so easily and decided to continue with more logic.
\n\u201cAlso, precious metals like gold and silver have a daily price, which is easily available. In fact these days most newspapers publish the daily price of gold\/silver right under or around their mastheads. So when you buy gold\/silver chances you are likely to be offered a price which is around that daily price,\u201d I explained.
\n\u201cHmmm!\u201d she said in a very non committal tone.
\n\u201cDiamonds on the other hand have no standardised pricing, though there is something known as the Rapaport Report which is issued to jewellers. This puts out the price of diamonds based on 5Cs of a diamond i.e. carat, , clarity, colour, cost and cut. But this list is not available to an average customer. And more than that grading diamond becomes very difficult once they have been cut and set in jewellery. The best time to grade a diamond is when it\u2019s lose.\u201d
\n\u201cBut what is the point you are trying to make?\u201d she burst out, sounding very hassled.
\n\u201cWell, the point is you really don\u2019t know what price you are going to get for a diamond when you try to sell it.\u201d
\n\u201cBut who wants to sell it?\u201d
\n\u201cI\u2019ll get back to that question. Let me explain to you how the diamond trade actually works.\u201d
\n\u201cOkay, go on,\u201d she replied.
\n\u201cThe diamond trade has had a monopoly of a single South African company called De Beers. As Edward Epstein points out in his brilliant article\u00a0Have You Ever Tried to Sell a Diamond?<\/a>\u00a0<\/i>\u201cDe Beers took control of all aspects of the world diamond trade, it assumed many forms. In London, it operated under the innocuous name of the Diamond Trading Company. In Israel, it was known as “The Syndicate.” In Europe, it was called the “C.S.O.” — initials referring to the Central Selling Organisation, which was an arm of the Diamond Trading Company. And in black Africa, it disguised its South African origins under subsidiaries with names like Diamond Development Corporation and Mining Services, Inc. At its height — for most of this century — it not only either directly owned or controlled all the diamond mines in southern Africa but also owned diamond trading companies in England, Portugal, Israel, Belgium, Holland, and Switzerland.\u201d\u201d
\n\u201cSo, what is your point?\u201d she asked.
\n\u201cAs Barry J. Nalebuff and Adam M. Brandenburger write in their book\u00a0Co-Opetiton<\/i>\u00a0\u201cDe Beers, a South African company, has a monopoly over the world\u2019s\u00a0diamond\u00a0market. Most of the world\u2019s\u00a0diamond\u00a0produce is sold through the Central Selling Organisation of De Beers.\u201d The control that De Beers has over the diamond market has come down over the years, but it still remains reasonably strong.\u201d
\n\u201cSo?\u201d
\n\u201cDe Beers operates like a cartel, deciding on the supply of diamonds every year and thus ensures that the market is not flooded with them. In recessionary years it cuts down the supply of diamonds dramatically thus ensuring that they don\u2019t lose value. Diamonds over the years have been found in countries like Angola, Australia, Nambia and so on. In 1960s, huge diamond reserves were found in Siberia, making Russia a big supplier. Hence, diamonds are not scarce as they are made out to be,\u201d I explained.
\n\u201cThanks for giving me a crash course on diamond economics,\u201d she said saracastically, hoping that I stop.
\nBut I was in no mood to. As Nalebuff \u00a0and Brandenburger point out \u201cPeople value\u00a0diamonds\u00a0highly because they perceive them to be scarce. They\u2019re not, but it\u2019s the perception of scarcity that counts.\u201d
\n\u201cHah!\u201d
\n\u201cAnd let me come to the bit about not selling a diamond.\u201d
\n\u201cWhat about that?\u201d
\n\u201cA perception has been created over the years about diamonds being a permanent part of a couple\u2019s life. As Epstein points out \u201cBoth women and men had to be made to perceive diamonds not as marketable precious stones but as an inseparable part of courtship and married life. To stabilize the market, De Beers had to endow these stones with a sentiment that would inhibit the public from ever reselling them. The illusion had to be created that diamonds were forever — “forever” in the sense that they should never be resold.\u201d This perception has been created by a long running\u00a0diamonds are forever<\/i>\u00a0advertising campaign.\u201d\u201d
\n\u201cYes it\u2019s a perception. But then have you ever heard the phrase\u00a0perception is reality?<\/i>\u201d
\n\u201cWell, you can maintain that reality by buying fake diamonds i.e. man made diamonds. Essentially there are two kinds of fake\u00a0diamonds: moissanite and cubic zirconia (CZ).\u00a0\u00a0As Geoffrey Miller, a consumer behaviour expert, writes in\u00a0Spent \u2013 Sex, Evolution and Consumer Behaviour<\/i>\u00a0\u201cThere is a rationale behind not spending the amount on real\u00a0diamonds. Casual observers can’t tell them apart, nor can most pawnshop owners using the standard thermal conductivity tests for distinguishing CZ from\u00a0diamond. Only experts may notice the subtle double refractions (birefringence) caused by Moissanite’s\u00a0\u00a0hexagonal crystal structure.\u201d\u201d
\n\u201cAh! Should I say I am impressed?\u201d
\n\u201cIn fact the quality of so called fake diamonds has gone up dramatically gone up over the years. As Miller writes \u201cThe arms race between real and fake has also undercut the De-Beers\u00a0diamond\u00a0cartel for more than a century, as ever-better imitation\u00a0diamonds\u00a0have been developed: titanium dioxide (synthetic rutile) in the 1940s, synthetic strontium titanate (Fabulite) in the 1950s, yttrium aluminum garnet(YAG) in the 1960s, gadolinium gallium garnet (GCG) in the 1970s, cubic zirconia (CZ) in the 1980s, and silicon carbide (Moissanite) in the 1990s. CZ makes for an excellent imitation diamond…Moissanite, introduced in 1998, is even closer to\u00a0diamond, with a similar hardness, density, and luster, yet more brilliance (a higher refraction index) and more “fire” (a higher dispersion index).\u201d\u201d
\n\u201cBut fake at the end of the day is fake\u00a0na.\u00a0<\/i>I won\u2019t be able to carry it off with the same panache and confidence as the real thing,\u201d she said.
\n\u201cHmmm!,\u201d I replied, ignoring what she had just said. \u201cDid you know that every time you buy a diamond you might be supporting a dictator or a rebel movement in Africa?\u201d
\n\u201cYou\u00a0 won\u2019t stop! Will you,\u201d she said in an exasperated tone.
\n\u201cAs Alan Beattie writes in\u00a0False Economies –\u00a0A Surprising Economic History of the World<\/i>\u00a0\u201cDiamonds, in particular, are a near-perfect mineral with which to fund freelance rebel movements or alternate governments. They act almost like a global currency, being small and light and holding their value well. Despite the attempts of an international campaign, the Kimberly Process, to register their source, they are very hard to trace. The Sierra Leone civil war dragged on for a decade from 1991 after the Revolutionary United Front, the main rebel movement, gained control of diamond mines and used the wealth to fund their operations,\u201d\u201dcame a long wielding response from my side.
\n\u201cOkay. Now that you have said so many things let me just say one thing. My sister\u2019s husband is buying her a big diamond or stone as you call it, this Valentine\u2019s Day. And I guess that makes it very clear that you will have to do the same,\u201d she said, having the last laugh.
\nMy mind went back to a line that the short story writer Hector Hugh Munro better known by his pen name Saki, once wrote \u201cA woman and an elephant never forget an injury.\u201d And with that I started making a mental calculation of what the damages would be.
\nThe article <\/a>originally appeared on www.firstpost.com on February 12, 2013
\n(Vivek Kaul is a writer. He can be reached at\u00a0vivek.kaul@gmail.com<\/a>)<\/i>
\n 
\n 
\n 
\n 
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0 Vivek Kaul \u201cSo let\u2019s watch\u00a0Gentlemen Prefer Blondes,\u201d she said the other day. Knowing her taste in movies did not go beyond Salman Khan beating up the baddies, I was left wondering why did she suddenly want to watch a nearly 60 year old Hollywood film? But then her statements could be disguised questions at … <\/p>\n

Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"qubely_global_settings":"","qubely_interactions":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,14,33],"tags":[894,972,3895],"qubely_featured_image_url":null,"qubely_author":{"display_name":"Vivek Kaul","author_link":"https:\/\/vivekkaul.com\/author\/vivekkaul\/"},"qubely_comment":0,"qubely_category":"Analysis<\/a> Business<\/a> Firstpost<\/a>","qubely_excerpt":"\u00a0 Vivek Kaul \u201cSo let\u2019s watch\u00a0Gentlemen Prefer Blondes,\u201d she said the other day. Knowing her taste in movies did not go beyond Salman Khan beating up the baddies, I was left wondering why did she suddenly want to watch a nearly 60 year old Hollywood film? But then her statements could be disguised questions at…","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/1506"}],"collection":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/comments?post=1506"}],"version-history":[{"count":0,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/1506\/revisions"}],"wp:attachment":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/media?parent=1506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/categories?post=1506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/tags?post=1506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}