How do diamonds (natural and high quality lab created) stay valuable when there are so many in circulation from things like estate sales, heirlooms, new for sale diamonds, etc? I wonder this about diamonds specifically because they are difficult to destroy or compromise but are ubiquitous.
In: Economics
The thing is, they don’t. Diamonds are far more plentiful than we think and, realistically, are intrinsically worthless. The demand is falsified through clever marketing and the only people who really make money selling diamonds are stores. If you ever try to resell a diamond, no one will give you much for them. The only exception being REALLY large diamonds, rare colors and clarities, and diamonds included in high end jewelry made by well known makers but even then the true value lies in the precious metals and the time put into creating it. That, and the name of the jewelry maker, not the diamonds themselves.
Diamonds stay valuable because the Debeers company stockpiles them and keeps an artificial scarcity on them at a global scale. Inherited diamonds do not lower value much because of population growth. This means that there are more people in “need” of diamonds every generation than those that become available due to older generations dying.
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Market value. Diamonds aren’t actually rare. But they have been marketed as though they are for a long time. Diamonds actually weren’t as expensive as other precious gems even a couple hundred years ago. Their value was artificially inflated, partially by marketing schemes/advertisement campaigns, including the engagement ring industry, which propped them up as *the* right choice. Those who produce and sell diamonds have a vested interest in maintaining that artificially inflated value, so they aren’t going to sell them for less.
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