Valuetainment - The TRUTH About How De Beers Manipulated Price of Diamonds

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.

Valuetainment - February 19, 2024

The TRUTH About How De Beers Manipulated Price of Diamonds

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