Valuetainment - February 19, 2024


The TRUTH About How De Beers Manipulated Price of Diamonds

Topics
lab grown diamonds vs natural
Hosted by
Patrick Bet-David
Mentioned
Fellas Gentleman Prefer Blondes Marilyn Monroe Paul Zeminski Elon Musk Rothschild Einstein Johnny Mary VVS1
7 Signs You’re a Lone Ranger Entrepreneur The Childcare Crisis - Why Parents Are Going Broke Raising Their Kids

Episode Stats


Length

11 minutes

Words per minute

193.03

Word count

2,189

Sentence count

198

Harmful content

Misogyny

3

sentences flagged

Hate speech

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Diamonds are the most common gems in the world, and with the help of some incredible marketing strategies, they fooled you and me into thinking that diamonds are forever. Today we re going to break down the whole thing down.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.040 Ladies, you're not going to like today's podcast. Gentlemen, for some of you who have bought
00:00:03.880 diamonds, you're going to be very upset. Those of you that haven't yet proposed and haven't
00:00:08.600 bought diamonds, you're going to love this episode. Why? Because you know when you and
00:00:12.300 I think about diamonds, we're like, oh my God, the rarity of diamonds. That's why they're
00:00:16.680 worth so much. Did you know diamonds are the most common gems in the world? In the community,
00:00:22.340 the most common gems in the world. Do you know there's roughly a quadrillion tons of
00:00:27.440 diamonds in the ground? You know what that is? That's a thousand trillion tons. But Rothschild
00:00:34.800 financed the establishment of De Beers diamond mines in South Africa in 1887. And with the
00:00:42.400 help of some incredible marketing strategies, they fooled you and I to think diamonds are
00:00:47.920 forever. Today, we're going to break the whole thing down. Okay, so if you give value out of
00:00:51.860 this video, give it a thumbs up and subscribe to the channel. Let's get right into it. In 1902,
00:00:55.620 De Beers controlled 90% of world's rough diamond production and distribution. De Beers and its
00:01:02.540 central selling organization established exclusive contracts with suppliers and buyers, making it
00:01:06.840 impossible to deal with diamonds outside of De Beers. Can you imagine if you controlled 90% of any
00:01:11.960 industry? Isn't there a word for that? Isn't it called monopoly? That's exactly what they had. 90% of
00:01:17.620 it they controlled. This is when they began one of the greatest marketing and advertising strategies in
00:01:23.380 the history of business and everything changed on how you and I viewed diamonds. So here's what they
00:01:29.080 did. The first thing they did is they went to Hollywood and with proper encouragement, the movie
00:01:32.840 industry displayed its most glamorous actresses draped in diamonds. Diamonds became a top symbol
00:01:38.180 for the rich and famous until 1930. In the 30s, when the demand for diamond rings declined in the U.S.
00:01:45.300 during hard economic times, De Beers company began a marketing campaign using photographs of glamorous
00:01:50.040 movie stars covered in diamonds. Within three years, the sales of diamonds had increased by
00:01:54.440 50%. Here's a couple of things they did, which I think is brilliant. Number one, they convinced
00:01:58.680 everybody that the average engagement ring that you buy for your wife should be three times your
00:02:04.120 monthly salary. What do you mean? You make $5,000 a month today. The ring should be $15,000. If you
00:02:10.060 make $10,000 a month, you need to buy a $30,000 ring for your wife. Can you imagine the amount of 0.99
00:02:15.140 pressure they put on everybody? And on top of that, you know what they started saying in 1947?
00:02:19.140 Diamonds are forever. You ever heard that before? That was born in 1947. And on top of that,
00:02:23.940 enhanced with Marilyn Monroe's performance of the song, Diamonds are a girl's best friend in the 1953
00:02:29.860 film, Gentlemen Prefer Blondes. And gentlemen, you know what else they did? They convinced and pressured
00:02:35.740 you to start buying something every year during your anniversary. You should buy your wife. If you love
00:02:40.660 her, why don't you buy a band with diamonds on there? And this pressure was like, babe, Johnny bought
00:02:46.280 a bracelet with diamonds on it for Mary. Will you buy me one? And then you're sitting there saying,
00:02:53.420 how many times my salary is this? Props to De Beers for putting that kind of pressure on millions of
00:02:59.240 men to have to buy something they can't afford to buy. Now, let's talk about the monopoly aspect of
00:03:03.360 De Beers on what they did. As diamonds were discovered in other parts of Africa and South America,
00:03:07.140 De Beers gained control of the rough diamond supply. Allegedly, the tactics used to gain
00:03:11.500 control included murder and kidnapping. Structure of the business remained the same for much of the
00:03:15.700 20th century. Now, keep in mind, De Beers knows that diamonds are not very rare. They're actually
00:03:21.320 very common, and there's a quadrillion tons of diamonds in the ground, but they would release it
00:03:26.720 in a limited amount of supply to show rarity of it. That's how it was rare. It wasn't really rare.
00:03:32.600 The company made the way they released diamonds to be rare, which increased the value.
00:03:36.540 They maintained a large warehouse of uncut diamonds in London. As a result, they weren't allowed to do
00:03:41.700 business in the United States and a few other countries. So this can't be real, right? I mean,
00:03:45.700 Pat, we've been told diamonds are rare, right? I mean, there should be a lot less limited supply
00:03:51.140 of diamonds than gold. No? I mean, yes, I guess. What do you think? Let me just show you some numbers
00:03:57.420 here. When you look at numbers on what the cost per gem is, according to Yahoo Finance, here's what you
00:04:03.740 would find. Platinum is ranked number 18 at $33 per gram. Number 17 is palladium at $46.52. Then you
00:04:12.020 have gold at only $62.26 per gram. By the way, there's only enough gold to fit three and a half
00:04:19.760 size of Olympic swimming pool. Didn't you visually go there? Only that much, yet we got quadrillion
00:04:26.460 tons of diamonds and diamonds are more expensive than gold. That can't be, right? Let's continue.
00:04:32.800 Number 15, iridium is $162.14. Rhodium, $228. Number 13, plutonium costs roughly $4,000 to $11,000
00:04:41.540 per gram. Number 12, tafite, that's $12,500 per gram. Number 11, benitoite, $8,000 to $21,000 per gram.
00:04:49.800 Number 10, tritium, $30,000 per gram. Number 9, red barrel, $50,000 per gram. Number 8,
00:04:56.460 diorite is $100,000 per gram. Number 7, red diamond, $25,000 up to $150,000 per gram. Putting
00:05:05.080 it at number 7, even though there's more diamond than gold. But these De Beers, got to give it to
00:05:10.440 them. Props for convincing us that diamonds are rare. Number 6, pinite, $300,000 per gram. Number 5,
00:05:18.380 red diamonds, $5 million per gram. Number 4, serendibite, $100,000 per gram. Number 3,
00:05:25.700 californium, $252,000 per gram. Number 2, this is so rare that I don't even know how to pronounce
00:05:33.380 this name. So let's butcher it together. Ready? Look at the words on the screen. Endoheterol
00:05:37.760 fullness, $167 million per gram. Okay? That's how rare it is. And last but not least,
00:05:44.220 anti-matter, $62.5 trillion. Is this serious? $62.5 trillion of gram. It's considered to be the
00:05:56.120 most expensive substance on earth because it requires an incredible amount of energy to
00:06:00.040 generate. According to CERN, it requires several hundred million pounds just to create one billion
00:06:05.600 of a gram of anti-matter. It also happens to be extremely dangerous as it annihilates any matter
00:06:11.280 that it may come into contact with in a huge explosion, the size of which is determined by
00:06:16.320 Einstein, famous for E equals MC square equation. We learned something together. Ladies, if you can 1.00
00:06:22.660 convince your man to buy you an anti-matter ring, you better keep that guy. I mean, that's $62.5 trillion.
00:06:28.480 Even Elon Musk can't afford to buy that. But lab-grown diamonds. Fellas, let's sell the ladies on 1.00
00:06:34.340 getting some lab-grown diamonds. Let's go through it together, ladies. Hang tight. The primary
00:06:39.400 difference lies in their origin. Lab-created diamonds are grown in controlled environments,
00:06:43.980 while natural diamonds from naturally in the earth's mantle. They are chemically, physically,
00:06:48.760 and optically identical to natural diamonds. With the same hardness, brilliance, and fire,
00:06:53.640 synthetic diamonds cost 30 to 40 percent less than natural diamonds. And growing consumer interest
00:06:59.340 and ethical diamond sourcing makes these stones an appealing option to mine diamonds. Global sales
00:07:05.500 for lab-grown diamonds increased to $12 billion in 2022, up 38 percent year-over-year, per an analysis
00:07:11.820 by New York-based Paul Zeminski, a diamond industry analyst. So now, diamonds may be forever, but the
00:07:17.620 market for diamonds surely isn't. That is the news in the latest global diamond report from 2019 from
00:07:22.380 Bain & Company in association with the Antwerp World Diamond Center. Throughout the mined diamond
00:07:27.180 supply chain, sales are falling. With rough diamond sales expected to decline by 25 percent,
00:07:33.680 and polished diamond sales to fall off by 10 percent by the end of the year. And this next data I'm going
00:07:38.400 to give you is from September of 2023, so just a few months ago. So watch this here. De Beers has
00:07:42.800 cut prices in the category by more than 40 percent in the past year, including one cut of more than 15
00:07:50.000 percent in July. In June of 2022, De Beers was charging about $1,400 a carat for the select
00:07:55.280 makeable diamonds. But by July of 2023, that had dropped from $1,400 to $850 a carat. Fellas,
00:08:01.760 this chart you're going to like. Watch this here. This is looking at the price of a generic one
00:08:06.480 carat round VS Clarity in your colorless and VGI deal cut diamond. You have the dark blue on the
00:08:11.600 bottom being lab and the light blue being at the top with natural. Do you notice a trend? Both of
00:08:16.560 them are going down. Lab is obviously going down dramatically, but look what's happened from 2016
00:08:21.520 to now. And according to Bloomberg data, watch this here. The diamond standard index price recently
00:08:26.480 hit lows they have not seen since 2004. That's 20 years ago. Look at that. The high was roughly in
00:08:33.920 2008, 2009, 2010. But look at the lows today. Obviously, this isn't good for De Beers. This is
00:08:40.160 why their diamond sales is down 37 percent year over year. And on top of that, one of the greatest signs
00:08:45.600 here is the traction being made by lab grown diamonds in their share of diamond export from India,
00:08:50.480 where about 90 percent of global supply is cut and polished. Lab grown accounted for nine percent of
00:08:55.680 the diamond exports from the country in June compared to only one percent five years ago.
00:09:00.880 That's a growth of 900 percent in five years. So if you just want to look at a chart to kind of
00:09:06.240 compare the prices, this will be an easier one for you to do. If you look at this right here,
00:09:09.440 it tells you at the top, furthest one to the left is the natural diamond. Then you have the middle
00:09:13.920 one is a lab grown diamond. Then the furthest one to the right is lab created moissanite,
00:09:18.320 right? Which is becoming very popular lately. And then all the way to the left is number of
00:09:21.760 carats. So let's look at one carat. If you wanted to get a carat of a natural diamond,
00:09:26.400 a VVS2 clarity cut or VVS1, you're looking at $8,900. But if you do a lab grown diamond,
00:09:32.880 it's only $3,000. But look at the moissanite, $595. Big difference. So for some of you that are
00:09:40.080 watching this, you're sitting there saying, oh my God, the pressure's packed. You want me to spend
00:09:42.880 three months of my salary to buy a ring fork? Because that's absolutely insane. I agree with you.
00:09:46.960 Well, my wife and I got married. This is what I said. She got me a $400 ring. I don't care,
00:09:51.600 $400 is cool. This isn't the one because I've lost God knows how many rings. But she got me
00:09:55.440 a $400 ring and I got her a $3,300 ring. You know what she wears still today? Still a $3,300 ring.
00:10:01.040 I said, if we're together for 10 years, I'll get you a $30,000 ring. We were together for 10 years.
00:10:05.040 We went to the store. She said, babe, honestly, I don't want a $30,000 ring. Can we go to Monaco for a
00:10:09.200 week and enjoy the memories? We went to Monaco. I said, why put so much money into a ring? We can invest
00:10:14.000 into a business. We can invest into something else. So if you're watching this and you're about
00:10:18.080 to get married and maybe you don't make a lot of money. If you come from a rich family, your family
00:10:21.680 wants to pay for the money. It is what it is. Don't fall for the trap of buying a big ring for no
00:10:26.800 reason. Sit down and have the conversation with your spouse and explain what we're really solving
00:10:32.800 for. Is it really about a ring so you can brag in front of your friends and all this other stuff
00:10:36.320 because the beers has done a great job marketing to you. They need a big ring. Or do you actually want to
00:10:41.920 build your relationship on substance, on investments, because life's going to be
00:10:45.920 very expensive. Raising a kid is very expensive. Cost of living is very expensive. Do you really
00:10:50.000 want to spend that kind of money on a ring today? Maybe, maybe not. My suggestion would be to take
00:10:54.160 that money and invest it into something else. Business, real estate, stocks, other places,
00:10:59.680 not a diamond ring. If you have value out of this video, give it a thumbs up and subscribe to the
00:11:03.040 channel. And if you enjoyed this video, maybe you'll enjoy the video, Men Indating Certain Crazy
00:11:08.080 stats that you've never seen before. Click here to watch that video. Take care, everybody. Bye-bye, bye-bye.