- Jun 8, 2009
Paul-Antwerp said:Hi Yoram,
I think that this initiative highlights the importance of securing a supply of rough.
Considering a future shortage, it is in the cutters' best interest to reach long-term-supply-contracts. For the suppliers-miners however, the opposite might be most attractive, a minimum of long-term-contracts and a majority of spot-transactions, possibly through tenders.
We are already..., no?Paul-Antwerp said:Most importantly, you stating this analysis as rosy is not correct. It is good news for miners, but it is very bad news for all other actors in this business, ranging from cutters to wholesalers and retailers. However, we cannot simply dismiss it because it is bad news. We have to deal with it.
Prices can go up 55% due to inflation but it is not a supply driven price increase they are talking about.Paul-Antwerp said:Karl,
Check the price of your groceries this week and imagine how many items will have gone up 55% by 2018. Considering past experience, I know that my groceries clearly cost about double of what I used to pay 8 years ago.
Your argument is in economic terms that the world will go through a decade of deflation. Let us all hope that this is not the case, considering that the world's population is continuing to rise and we will need economic expansion to simply feed more people.
There was a shortage of housing in many markets due to easy money.Paul-Antwerp said:Karl,
Your comparison to real estate is invalid. Looking at the number of vacated houses in the US, it is clear that there was an over-supply. Alrosa's analysis clearly shows supply declining and struggling to get back to the same level.
Sorry if I wasn't clear I was talking about the housing boom causing a shortage then exploded. The same easy money was driving diamond sales at that time.Paul-Antwerp said:Easy money is not driving diamond sales today. What are you basing your position on?
You seriously believe that easy credit and the wall street insanity before the crash didn't drive diamond sales higher?Paul-Antwerp said:Karl, your claim that easy money was driving diamond-sales recently up to two years ago has no basis.
I agree Neil.denverappraiser said:What drives the price of diamonds, at least on the demand side, is young men who want to get married and young women who insist on diamonds being a part of that deal. I see no signs that either of these is changing as a function of the recession and neither of these things is limited to the United States. Indeed, most of the growth in the industry is in other markets where the diamond engagement tradition isn’t so solidly ingrained. The world population continues to grow at an alarming rate and this too is very likely to continue. I think the world is a long way from getting a diamond into the hands of everyone who wants one, I think we’re a long way from people deciding that they aren’t really very useful, I think that we’re a long way from people deciding that some cheaper alternative would work just fine for the purpose, and I think we’re a long way from the supply ramping up to a level where the supply side becomes the primary driving force on prices rather than demand. As they get more expensive, we may see some changes in what people buy but I see the overall dynamic as remarkably stable.
True there are signs of some bubbles in China, but they are producers, so they will have mechanisms of compensations if the bubble goes bust (may be Australia needs to watch for the real state bust in China that will slow their exports) they do not need the west much since they can enjoy what they produce inside their emerging markets, on the other hand it is here in the states where we are consumers and the shelves of our stores will get less and less goodies but yet more expensive.Karl_K said:few points:
1: China's economy can't continue to grow on exports they have reached near saturation and the backlash has started to grow more intense. A conversion to a local based economy is going to be painful.
Everyone seems to assume they are going to keep growing at the same rate.... not going to happen, look at what happened to Japan when they switched to a more local market economy.
2: India is in the same boat but seems to be trying to grow local markets more than export at all costs.
3: real wages adjusted for inflation have been going down world wide.
4: economics 101: prices will only rise as far as the customer is willing to pay.
The huge question is will consumers pay 55% higher prices in today's money?
Honestly I doubt it.
When I hear overly rosy predictions the one thought comes to mind is:
"real estate prices are going to keep going up" we all know how that worked.
If you factor in inflation, the price now is cheaper than years back even if it is more. it will be nice if a graph shows the price of diamonds compared to Gold...it will be interesting data to look at!PS Admin said:Just wanted to let everyone know i have updated the Pricescope diamond chart with the latest info. It is showing an up trend as well.
Absolutely right, Doc,Doc_1 said:If you factor in inflation, the price now is cheaper than years back even if it is more. it will be nice if a graph shows the price of diamonds compared to Gold...it will be interesting data to look at!PS Admin said:Just wanted to let everyone know i have updated the Pricescope diamond chart with the latest info. It is showing an up trend as well.
Am afraid yes, wait until the Chinese realize that we will keep our reckless monetary policy despite their warnings and that they better turn to their own market rather than exporting to us and their appetite open to diamonds and platinum more than what it already is, they have a potential billion customer...lol.Paul-Antwerp said:Absolutely right, Doc,Doc_1 said:If you factor in inflation, the price now is cheaper than years back even if it is more. it will be nice if a graph shows the price of diamonds compared to Gold...it will be interesting data to look at!PS Admin said:Just wanted to let everyone know i have updated the Pricescope diamond chart with the latest info. It is showing an up trend as well.
In the past 10 to 15 years, the price of diamonds has been relatively flat and certainly cannot be compared to the huge leaps upward that other commodities made.
Are we at the dawn of a big catch-up-race?
Karl_K said:woops so much for no new mines.
Want to bet there are more in the area since they tend to be in groups?
Rio Says India Diamond Project Is Biggest Global Find in Decade
The article is about prices of rough diamonds being up at least 30% compared to last year, while the same is clearly not true for prices of polished diamonds. The latter are clearly up, but it is difficult to impossible to also bring them up 30% in one year's time. Nevertheless, prices of polished are clearly up, and will continue that upwards trend. It is clear that the market of rough diamonds is much more volatile, but nothing in this article contradicts any of the Alrosa-predictions, nor the content of my article.Karl_K said:demand based price pressure on polished:
"There is a message here to manufacturers. The "optimistic prices" didn't meet their full hopes. Prices, says a trader, "were a war" at the recent trade fair. The buyers, mostly Indians, couldn't afford the higher prices because they don't have the demands to justify these prices. The sellers couldn't budge because they need to cover their costs. "
I disagree with you that new diamond rich areas are not waiting to be discovered.Doc_1 said:Karl
As far as discoveries and natural resources we are hitting the hockey stick and we exploited our planet in the last 200 years...good luck!
As far as prices
The whole picture will be clear if we see it as dollar is going down rather than the price is going up, unfortunately it is not only the dollar but every fiat currency on the planet however they are falling at a less speed than the free falling of the dollar like a stone off the cliff.
So tell me how many dollars helicopter Ben is printing i will tell you how high the price of diamond is going, a reminder ...look at the price action of gold/silver.