The diamond is the only gem whose sale has been more or less systematized throughout the century.
The monopoly that created this market is a thing of the past, but the system founded by it continued to streamline the balance of supply and demand by inertia until finally the inertial forces were stopped by the resistance of the environment, well, almost stopped - in any case, we are witnesses of this process.
The diamond cartel was certainly the product of a reasonable will, and not some kind of “market” element. Taking advantage of the human passion for possession of a precious stone, the creators of the monopoly derived a key formula for the sustainability of the new industry: the formation of a strong need for a diamond as a symbolic value among the wealthy part of humanity, with strict centralized control over the supply of diamonds.
Without this gigantic investments in production cannot take place. The life cycle of one project exceeds half a century, and it must be protected by sustainable demand, regardless of the windy nature of world politics.
A reasonable will and a wild uncontrollable environment are an eternal dichotomy. The will is not an abstract thing, but a very practical one; in a figurative expression, it has a name and a surname, it has its goal and a life end. The wild environment is unsystematic, naively democratic and irresponsible. Its formula was derived by Leo Trotsky: "the movement is everything - the ultimate goal is nothing".
The diamond industry has been called the last vestige of the industrial age because it offered a product that most people buy once or twice in a lifetime. Therefore, the key components of the value of this product were its detailed quality characteristics, and the reputation of the ability to remain almost "timeless".
Actually, this is how the old industry worked, where the buyer demanded almost “eternal” quality even for everyday items, not to mention real estate, cars and household appliances.
However, later it began to contradict the philosophy of constant economic growth as the greater good by itself. Who needs food processors that last 30 years and consumers who think it's great.
Moreover to produce such an appliance is a costly business. It's easier to make something cheap and sell it to someone who won't be too upset by throwing away plastic garbage in a year or two, which was called a food processor when they bought it, and will buy a new one, made in the same factory, but under a different brand.
As incomes grow, habits do not change, and now a wealthy consumer in a jewelry store is paying several thousand dollars to buy white gold wire in the form of a smile, sprinkled with cheap, very small stones, but having the value of the word “diamonds”. He/She buys this because of the box, which has a hundred-year history of its name or just because it’s made creatively.
That is, internally, our respected consumer strives for constancy, but the formed habit is the second nature of a person, and he buys cheap wire because it is unusual, in the form of a smile, which captured his attention and ensured the flow of funds from him to the seller.
Immediateness, simplicity in making a decision for the lower middle class can be satisfied with cheap goods that are “as good as expencive”, and for those of the same mentality, but wealthy, with a brand and a trend.
And there is nothing wrong with that. There is nothing wrong with a young girl wanting to wear synthetic blue stones on Monday and lab-grown pink diamonds on Tuesday. They are beautiful and simply chip. Easy to receive, easy to leave. There is nothing wrong with a successful young businessman buying a multi-million dollar orange stripe painting because he wants to show that he paid that money for the stripe. But this is the wild social environment - brutal and cheerful. The concept of preciousness is impossible without reasonable will, labor and time. This concept is not always equivalent to a high cost, but still it protects this cost with its own significance.
The current price crisis in the diamond market is due to a noticeable drop in the standard of living of the middle class in the United States with a huge supply of artificial imitations of diamonds. An lab-grown is convenient for the manufacturer due to its cheapness and availability: it can be sold cheaply while maintaining marginality as an ordinary piece of jewelry, or it can be sold expensively as a branded and “unordinary” designed.
Over time, this can finally turn seasonal price volatility into a free fall in demand for natural diamonds, and, consequently, deprive large mining companies of oxygen.
The scenario that someone will take advantage of what happened and one of the largest investment banks will repeat the Oppenheimers' trick of the early 20th century to establish control over supply and reincarnate the cartel now in the 21st century is not excluded, but is not yet obvious. Although there are no problems with sufficient financial and marketing efforts to further increase the value of natural diamonds, favorably shading their brilliance by comparison with laboratory “broken glass”.
More realistic, however, is the option of polarizing the diamond market for super-premium goods, whose cost will grow in proportion to the decrease in the price of lab grown and melee. This is an obvious pattern in the market for other gems and semi-precious stones. In this case, the premium market will become a market of highly professional consumers who know the value of themselves and the product they buy.
Here, a set of gemological platitudes, traditional marketing will give way to aesthetics, rarity and internal consumer professional communications, which will determine the price movement for each type of stone.