Diamonds are Forever

With the global economic slump, demand for diamonds is down which should mean falling prices but not if you cut supply too.  If you can believe it, Russia has surpassed De Beers as the largest diamond producer and with that has gained an ability to control prices through its significant control of the world supply of diamonds.  With demand down, the Russian diamond company Alorsa has cut its supply significantly - it hasn’t sold a single rough diamond on the market since December 2008.

With such control, one can expect diamond rings, necklaces, and everything else diamond to remain pricey.  It is economics 101.  If you control a significant amount of production, then you can be a price setter.  So for those of you who were/are waiting for diamond prices to fall due to the belief that the recession is demand driven you can stop waiting.  Prices will remain high and may even go higher.  Sorry to break the news.