NYT's article on Synthetic diamonds

WillyDiamond · Apr 20, 2014

I don't know if it will catch on, but anything to reduce the price of diamonds I am all for

http://www.nytimes.com/2014/04/20/business/when-diamonds-are-dirt-cheap-will-they-still-dazzle.html?ref=business&_r=0

denverappraiser · Apr 20, 2014

I don't expect much from the New York Times but you would think a self identified 'economist' would know better.

Where to start?

1) Colorless synthetic diamonds aren’t significantly cheaper than comparable mined stones, nor are they expected to become so without a quantum shift in technology. People have been sitting on the proverbial edge of their seats waiting for that shift since diamonds were first grown in the 50's. We're still waiting. Meanwhile the price of mined diamonds have skyrocketed. Cheap synthetic diamonds might happen, and it might even happen soon, but I'm not holding my breath. It also might be 100 years and it might be never. I've been reading articles like this for decades and the forecasters haven't done so well. Most, like this guy, don't even get the known facts straight before they leap into the bold speculation.

2) The price of mined diamonds is NOT a monopoly controlled by DeBeers, and hasn’t been for decades.

3) The ‘premium’ associated with type IIa diamonds is a hypothetical one. They tend to be white and clear stones, which command a premium for other reasons, but IIa is of no interest to anyone beyond the cutter.

4) Rather like the example he gives of autographed baseballs, the ‘value’ of the real thing isn’t all that connected to the availability of fakes or substitutes. It’s been solidly demonstrated many times in the gem business. Synthetic rubies of wonderful quality are readily available for a tiny fraction of the cost their mined counterparts. They have been for over a century. It takes an expert with tools to tell the difference. This in no way has tanked the ruby business. If anything, the opposite is true. The best of the best rubies go for stratospheric prices. What's tanked is the fakes. It's worth noticing that the most visible boon has been for the labs and the experts. People who buy the real thing demand paperwork. The same applies for sapphires, emeralds, spinels and a fair number of other stones. Why do these people think diamonds are different?

5) For those who haven’t noticed, wearing large diamonds isn’t a very good flag of significant wealth, and never have been. People have been wearing fake diamonds for as long as they’ve been wearing diamonds and, done properly, the fakes are really quite credible. Fooling even an experienced observer who isn’t using tools and who doesn't take the time for a careful inspection has been a piece of cake since at least the introduction of Cubic Zirconia in the 70’s if not before.