Marilyn Monroe might not have known that her part in “Gentlemen Prefer Blonds” would be one of the leading roles in the most effective advertising campaign the world has ever seen! Even if she didn’t know it, you can be sure that the DeBeers Diamond Cartel did! 

Do you know why Diamonds are so expensive? Marketing got the word out, but real value goes hand in hand with rarity. The more rare something is, like a Rembrandt or Van Gogh, the more expensive it is! Diamonds were indeed very rare, that is until the 1870s. This was when a huge reserve of Diamonds was discovered in South Africa. 

The supply of Diamonds took a giant leap, jumping from a mere three pounds a year to hundreds of tons. If, Diamonds were no longer considered scarce, they would no longer be considered valuable. This created a huge problem for the financiers and the Diamond Syndicate. So what do you think they did? Well!

“The investors in the diamond mines realized that they had no alternative but to merge their interests into a single entity that would be powerful enough to control production and perpetuate the illusion of scarcity of diamonds.”  Feb. 1982 ATLANTIC, Edward Jay Epstein

The Machinations of this Cartel began in 1888, when the Cecil Rhodes first incorporated De Beers Consolidated Mines, in South Africa. What followed, over the next one hundred and twenty-one years, is a story of intrigue, manipulation and hellish deceit. 

Cecile Rhodes, the founder of Rhodesia, modern day Zimbabwe, cut a deal to supply the London Diamond Syndicate with a fixed quantity at a fixed price. If the market dipped they just reduced the quantity to maintain the price. This is a monopolistic arm twisting, market manipulation, that is not only dubious but highly illegal in the developed world.

“The diamond invention is far more than a monopoly for fixing diamond prices; it is a mechanism for converting tiny crystals of carbon into universally recognized tokens of wealth, power, and romance.“ ibid

Behind the wall of a labyrinthine web of corporations, by 1901 the De Beers  had taken control of 90% of the worlds Diamond trade. In Rhodes own words, the:

“only risk is the sudden discovery of new mines, which human nature will work recklessly to the detriment of us all.” wikipedia

They stopped at nothing to ruthlessly insure that this risk was kept in check. Today De Beers are estimated control between 40% to 60% of the global Diamond trade. Even though their slice of the pie has diminished they still hold an ironclad grip on the price of Diamonds.

Do you know what that means? The price of Diamonds is an absolute fallacy! Rubies and Imperial Jade are much more rare and actually a much better investment. 

Engagement rings and wedding rings were traditionally set with an Emerald, because Emerald is considered ‘the true gem of compassion’. 

But the De Beers had a problem! Now that they had the supply, they needed to hype up the demand for Diamonds. Their first target was the engagement ring. They figured that if Diamonds were associated with romance and love, it would be much easier to expand the market. They used really cheap stones and went after the working man’s wallet. 

 This didn’t go over so well in Europe but took America by storm. 

“In fact, in 1938 some three quarters of all the cartel’s diamonds were sold for Engagement rings in the United States.“  Ibid