Diamond Disaster

The collapsing economy has led to a major drop in imports and exports of luxury items. Diamonds are at the top of that list. Diamonds are not mined in the US but the majority of them are cut here. There are only a few deposits in the US that have been discovered. The vast majority of diamonds are imported from other countries.

Where Diamonds Come From

Most diamonds are imported from Africa, but countries like Russia and Australia are beginning to give Africa a run for its money in the diamond mining industry. There are also some diamond mines scattered loosely around the globe in places like Canada and Brazil. In all diamonds are mined in about 25 different countries. Diamonds were once mined almost exclusively in India until they exhausted that resource.

Diamonds are formed at great depths inside the earth up to 90 miles deep to be precise. They are formed at temperatures that are close to 2000 degrees Fahrenheit by intense pressures in a process that takes millions of years. Made out of carbon the diamond is often forced closer to the surface by volcanic eruptions. Diamonds can and do travel with the current in the ocean with the current of a river. This allows them to be found in more far flung places like the mouths of river hundreds of miles from their source.

Diamonds are mined from both primary and secondary sites. When diamonds are formed underground, kimberlite is often also formed. Kimberlite is synonymous with the word lamproite. These deposits are called pipes and they are very good indicators that it would be wise to mine in that area.

Human Fascination

Humans have shown extreme fascination with the acquiring and keeping diamonds for hundreds of centuries. We have always coveted these beautiful stones. Our desire for them has led to their continued popularity today. Diamonds were first written about in India over 3000 years ago. Some speculate it may have truly been twice that long since humans have been fascinated by these glittering stones. They are valued as much for industrial use because of their hardness as they are for gem stone purposes.

Diamonds have been used in every type of setting imaginable throughout history. They have been used in necklaces, rings, bracelets and crowns. Royalty used to have diamonds tied into their hair during huge galas or special events a couple of centuries ago. Can you imagine losing a hair bow that was strung with diamonds?
The downward trends in the economy have continued over the past year and have now begun to trickle up and the resell market is being flooded with luxury items. It used to be nearly impossible to find high end items for resale but they are abundantly available now because the public has been feeling the crunch of this economic crisis. This crisis was originally confined to a few countries but as it progressed it became a global catastrophe.

Houses and Diamonds

You may be wondering what in the world houses have to do with the diamond market. At this point the housing market collapse in the US has caused a global pandemic of panic and even though diamonds aren’t sold as a commodity they are still being affected. The fluctuating price of the dollar combined with oil prices that soared over $110 per barrel this summer before plummeting to below $70 in November creates an unstable global market where all durable goods suffer.

Consumer spending is at a two decade low in the US with no end in sight. The American public suffered such severe loss in the financial markets as well as in their confidence that many people simply aren’t spending. They are the lucky ones. Many people cannot afford to spend. For example the millions of Americans who were foreclosed on and lost their homes in 2007 were calculated in the double digits. You aren’t likely to buy a new car when you can’t make your house payment.

You are also not very likely to go shopping for a new diamond when you can’t meet your needs. Diamonds are indeed luxury items and when a family can’t afford food then you can imagine they won’t be rushing out to emulate any current celebrity fashion trends. Right now it wouldn’t matter if Jennifer Lopez got a flashy new diamond in a bright color to spark envy across the nation. The average Jane can’t even afford to buy a good knock off.

The Change We Need

Now, half a year into the new president’s first term, we may be seeing the change we need. As everyone says, things aren’t going to change overnight, but there are certainly indications that the economy will recover. In the meantime try to hold onto to the precious jewelry pieces you have and don’t give in to the urge to sell off your diamonds to ease your financial woes. Ride out this storm with your precious stones kept safe. It is a guarantee that they will be worth more in the future than they are today.

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