Thursday, June 13, 2013

De scam?

Most people think the reason diamonds are so expensive is because the supply is so small. Standard economics: if the supply of a desired product or service is limited or restricted, the price goes up.  And so it is with diamonds, right? Well, an interesting post at Carpe Diem today suggests that the reason diamonds are so expensive is not due to a lack of physical supply; rather it's
because in 1938 De Beers decided that they would like us to. Prior to a stunningly successful marketing campaign 1938, Americans occasionally exchanged engagement rings, but wasn’t a pervasive occurrence. Not only is the demand for diamonds a marketing invention, but diamonds aren’t actually that rare. Only by carefully restricting the supply has De Beers kept the price of a diamond high.
Read the entire post here.