History of Diamonds part 3.

One of the really ugly stories that has surfaced in the last few years is in regard to what is known as “conflict diamonds” or “blood diamonds”. These are diamonds that have come from areas where civil wars are being waged to control the diamond resources of producing countries. The really ugly part is that there is such a nasty fight being waged for that control that local citizens are brutalized by the warring factions in order to maintain control of the area.

The brutality of these conflicts, particularly in Angola and Sierra Leone, has left many children without arms and legs…as one of the methods used by the various militias to control the local population is to sever the limbs of many of the locals to instill fear in everyone. The purpose obviously being to control them by fear so the local population will not assist legitimate government actions to control the problem.

There are many who believe that De Beers is complicit in this problem, mainly because for many years no diamond of any size could be bought or sold without De Beers being in control of the pipe line somewhere along the way. Given the De Beers total control of the diamond markets for many years, there was no way the conflict diamonds would find a market without De Beers being willing to buy them.

How much of this is true? There is a lot of speculation that common sense requires to be taken with a degree of credibility. Actual prima facie evidence is missing since most of the conflict diamond dealings are strictly clandestine purchases for which there are no records, and very few witnesses willing (and sometimes able) to talk. So the speculation continues.

One important note: At their greatest level, conflict diamonds are estimated to have included less then 5% of the diamonds on the market, and today account for less than 1% of the diamonds on the market. Meaning the chance of having a conflict diamond would be about 1 in 100. Taking into account the concern for those damaged by that 1%, it would also be wrong to throw out the whole diamond industry because of the bad deeds of a few disruptive factions. In order to protect the integrity of the industry many world governments met and created what is now known as the Kimberley Protocol, whose stated purpose was to help control this situation.

Kimberley Process

The Kimberley Protocol was an agreement by many nations that action was needed to stop the use of diamonds to fund wars and terrorism throughout the world. This protocol gave rise to the Kimberley Process, which are the regulations that have been adopted regarding the sale and distribution of rough diamonds around the world.

The Kimberley Process was implemented in January of 2003, and states that all rough diamonds must come with a certificate of verification, issued by a proper government authority to insure that they are from a non-conflict source. The diamonds must be packed in a specially marked container. All legitimately registered diamond dealers may only do business with other registered diamond dealers, and all must follow the above rules for all diamond shipments sent and received. The idea is that if the diamond industry only buys diamonds from known sources who are selling government approved diamond rough that has been legitimately verified, that the conflict diamond market will fade away.

Well….this looks good on paper, and it plays well in the media. However, many in the diamond industry know that this is going to have little impact on the conflict diamond issue. Currently there is no method available to identify a diamond as being from one source or another…as we can do with rubies, sapphire, etc. Small impurities in colored gemstones allow a certain level of identification as to their source if one has the proper equipment. Not so with diamonds. As of this writing there is no known method of identifying diamonds based on geographical origin. So it would be very easy for just one unscrupulous diamond dealer to do business with the bad guys and create an inroad into the legitimate diamond markets for conflict sellers.

While that scenario is probably closer to the truth than anyone wants to admit, it is still an extremely small part of the overall diamond market. So much so that the efforts to prevent the problem have almost created a situation where the fix is worse than the problem itself.

The compounded problem is that too many activists want to ruin the whole diamond market for the sake of a few problem diamond sources.

The reason is many activists wanting to blame the entire diamond industry for the actions of a few militias in diamond producing countries, which are beyond the control of local governments. Rather than solving the problem of the militias on a military level, all too many people want to blame the diamond industry for the illicit funds received by the conflict sellers, and try to control the problem through the diamond markets rather than through proper governmental and military action.

The end result is that diamonds and the diamond industry are being blamed for actions beyond our control, which should be dealt with by local governments rather than the world diamond industry.

We can only hope that the Kimberley Process will serve its intended purpose at some point in the future. The last chapter of that story is yet to be written, and probably won’t be for some time to come. Right now the Kimberley Process is about as well enforced as the Pirates Code in the Pirates of the Caribbean movie.
The Future of the Diamond Market

The future of the diamond industry is in limbo. While De Beers has controlled distribution and prices for over a century, the fact remains that diamonds are quite plentiful and De Beers is quickly losing that strangle-hold on the markets and prices. Yes, diamond prices continue to hold at fairly average levels, but that is due to a world wide effort to continue the monopolistic pricing structure of the diamond market, thanks in large part to RapNet and Rapaport and their undue influence on world diamond prices. Overall, however, it simply serves every diamond producer’s best interests to abide by the prices originally controlled and set by De Beers in order to maintain some form of market stability. Is that going to last? Only time will tell.

The other problem is compounded by a total lack of uniform standards or oversight of the diamond grading lab industry. The major diamond grading labs, who tout their grading reports as being some kind of certification of diamond quality, operate in a legal void. Total anarchy with no legal standards and no official oversight. As a result we have the GIA diamond graders selling higher grades to big dealers, same thing with the HRD, and a total Wild Wild West show throughout the diamond grading industry world-wide.

If consumers truly understood the anarchy that exists in the diamond grading industry, they would most likely go buy a new car or new 4k Res television.

While diamonds may be forever, as the famous N. W. Ayers advertisement for DeBeers claimed, the diamond markets may not be if things continue in the direction they are going.

Without any uniform standards or oversight regarding the diamond industry, this free-for-all concept running the diamond market may just turn into a free-fall reality for the diamond market. It is a fact that the world diamond industry is in deep, deep trouble.

Only time will tell……

Robert James FGA, GG
President, International School of Gemology Inc.
a 501(c)3 Non-Profit Education Organization

On a December day in 1866, a young man named Erasmus Jacobs found a transparent and very shiny stone on his father’s farm that was located alongside the Orange River. This turned out to be the first of what would become an avalanche of diamonds from the South African mines, and would start one of the world’s greatest monopolies that would last for over 100 years. There were two important events that combined to make this one of the most momentous events in world economic history.

First, it proved to be the greatest find of diamond deposits in the history of the world. According to many sources, the South African mines produced more diamonds in the next 15 years than the Indian deposits had produced in 2,000 years. The African diamond deposits proved to be extremely wide spread, and extremely rich.

The second event was the ending of the Civil War in the United States that ushered in a period of great prosperity and a resultant high demand for diamond jewelry. Plus…with the industrial age just now dawning, the demand for diamonds for industrial purposes was also growing. These were joined with an already healthy diamond market established in Europe. Together they all created a huge demand for diamonds, and many men got on ships of all shapes and sizes heading to the South African diamond fields to make their fortunes.

Until this time, the majority of diamonds found were in alluvial deposits, but with the South African diamond discovery the alluvial deposits could be traced up river until the prime source was found. These were called kimberlite pipes and were the remnants of ancient volcanoes that had discharged the diamonds from deep inside the earth millions of year earlier. More on that in a later lesson. For now it is important for you to know that the South African diamond deposits were traced back to their original source, and now diamonds could be dug from the earth…rather than just washed from a stream bed.

The problem became one of too many people trying to dig too many diamonds out of relatively small places in the ground. The main mining effort was at the Kimberley mine which at the time was the largest diamond mine in the world. Each miner was able to stake a claim measuring 31 feet or 9.44 meters square.Since everyone had different methods of mining, encompassing variable numbers of helpers and variable techniques, each claim was worked at different speeds. Different mining speeds meant that the claims dug into the earth at different rates. This allowed some claims to quickly be several meters deeper than the one next to it, allowing for a very dangerous situation as the higher would collapse onto the lower. Clearly something needed to be done to make diamond mining more uniform, more profitable and less dangerous.
Above and below you see the amazingly convoluted mining operations at the Kimberley Mine before the claims were unified into the DeBeers Consolidated Mining company. These claims were worked at different rates creating a very dangerous situation for the miners.

Enter Cecil Rhodes and Barney Barnato.

These two gentlemen arrived in South Africa in the early 1870s and separately began a process of accumulating claims from other miners in an effort to gain overall control of the Kimberley mine. The concept being that a single unified effort at mining would be more profitable, and bring the control of the distribution of diamonds under a single office. The market could then be better controlled as the supply of diamonds would be controlled by one man rather than a huge number of individual miners.

The ensuing battle between these two men has been the subject of many books, and is a story worthy of your continued research. The fight for control of the Kimberley mine was nasty in size and scope, encompassing many legal battles and bar room brawls. However, the necessity of a unified mining effort was further confirmed when the mine reached a particular depth and ground water began flooding vast areas of the mine. Many miners were quick to sell their claims as they believed there was no longer any reason to own that claim. The truth was, however, that Cecil Rhodes had a plan to pump the water from the deepening claims, thereby making them continue to produce profits far in excess of the bargain prices he paid the others who had given up on them.

Eventually, Cecil Rhodes won the battle of control of the Kimberley mine and bought out his rival, Barney Barnato, for a price of what would be over US$25,000,000.00 in today’s dollars to consolidate the Kimberley mine into single ownership. This was the birth of the De Beers Consolidated Mines Company which exists to this day.
Central Selling Organization

Of course, for the De Beers Consolidated Mines to have real control of their distribution, it was required that they not have to deal with all of the small time diamond merchants in order to sell their production. So in true form to the legacy of Cecil Rhodes, a unified distribution network was established between De Beers Consolidated Mines in South Africa, and what was known as the Central Selling Organization in London. The CSO, as it was called, was established to serve as the distribution channel for the diamonds, and to help control the market and prices of diamonds. This organization served to control virtually the entire world production of diamonds…since virtually all came from the South African mines owned by De Beers…by withholding rough when prices were low, and selling more rough when prices were higher. This established De Beers as holding a monopoly on the world diamond markets, a matter of great concern to the US government since monopolies were against the law in the USA.

The result was that De Beers could not directly do business in the United States, in spite of the fact that the US had become DeBeers biggest customer. The US jewelers were by far the driving force behind the world demand for diamonds, and yet the De Beers organization could not participate in the market. So for many years the De Beers organization paid the US advertising company, N. W. Ayers, to handle their public relations and promotion of diamonds in the United States. In fact, it was N.W. Ayers who come up with the famous De Beer’s slogan: A Diamond is Forever.™ With the mines under their control, the distribution under their control, the prices under their control, and the marketing under their control, De Beers finally had a complete and utter monopoly on the world diamond markets. ………and here is where the story turned a bit ugly.
World War II

With the outbreak of World War II came a world wide demand for many commodities to power the war machines of the Allied and Axis powers. One of these commodities was industrial grade diamonds needed for grinders and cutting blades to speed up production of war machines. You guessed it…De Beers controlled the whole world’s production of industrial grade diamonds. Since De Beers was only interested in who was willing to pay the most for their products, and not so much on what their customer’s politics were, the scramble for industrial grade diamonds put great amounts of profits into the pockets of the De Beers owners regardless of who made the purchase.

Although this did not sit well with the US government, the US was stuck with competing against Germany for the South African diamond supplies controlled by DeBeers. The US needed an option to the situation and they relied on the US industrial complex to provide an alternative to De Beer’s strangle hold on this important war time commodity. Enter: General Electric.

The General Electric company set about to create the world’s first lab created diamonds. Many other gemstones had been created in laboratories for many decades, so it was only natural to believe that diamonds could also be synthesized. Success would remove the De Beers monopoly out of the production chain and save the US government millions of dollars. The GE company was successful…to a point. Although they were able to artificially grow diamonds, they reported that they were not able to do so in the volume and quality required for military and industrial purposes. This turned out not to be totally true….

What was later revealed was that De Beers had actually conspired with GE to keep the new synthetic diamonds off the market so that De Beers would not lose their monopoly. Long after the situation occurred, De Beers involvement was found out, and De Beers was charged with crimes against the United States by way of their monopoly over the diamond markets. For some reason, GE was never brought to task over this matter, or so it has been reported.

The actual events after the revelation of this situation are still up to interpretation as there are many stories surrounding the issue. One thing was certain, however, no officer of the De Beers company could enter into the United States without being immediately arrested. For many decades the Central Selling Organization had to do business in the US from a distance and through third parties because they could not set foot inside any US property for fear of arrest.

In 2004 De Beers finally pleaded guilty to the price fixing of industry diamonds that dated back to the World War II. De Beers paid a US$10 million dollar fine and cleared the way to enter into the United States market as a formal business presence. It was during this time that De Beers ceased using the name and structure of the Central Selling Organization and formed the Diamond Trading Company.

At this point, the DTC took over control of the sale and distribution of rough diamonds from many world sources. And what about De Beers?

After many decades of making billions of dollars from operating a monopoly of the diamond markets to wholesalers and retail jewelers, De Beers is now going into the retail business in competition with their own clients through their De Beers retail jewelry stores that recently opened in New York and other locations.

From rainstorms in India to the Jewish diamond connection

Diamonds. The very name conjures up visions of wealth, intrigue, and fortunes. Are they real or imagined? Is diamond really the “King of Gems” as claimed by many advertisements? And…is it really true that Diamonds are Forever ™, as claimed in the now famous ad slogan created by N. W. Ayers in the 1940s that has been voted one of the best ad slogans of the Twentieth Century?

The truth is diamonds have a rather shady past…and uncertain future. Why…because the entire diamond market has been based on a monopoly market system that has lasted for over 100 years. In fact, it is one of the only monopolistic markets that survived and flourished within the structure of the modern capitalistic world economy. Before we talk about the current and future status of the diamond markets, let’s go back in time a bit and understand just how these crystals of pure carbon became such a mainstay in the world economy.
Golconda Diamonds

India was the place of original discovery of diamonds dating back almost 2400 years ago. In fact, until the 1730s India was the world’s only known source of diamonds. The diamonds were first found in fields after thunderstorms had moved through the area of central India. The locals believed that the diamonds were formed by lightning strikes hitting the ground, and were therefore considered to be a gift from the gods. It was unknown to these early diamond gatherers that they actually lived over a colluvial deposit of diamonds, which is a deposit close to a diamond pipe where the diamonds were being re-deposited by wind and rain. When thunderstorms moved across the area, the rain would wash away a layer of the top soil thereby exposing the diamonds contained in the ground deposits. As these thunderstorms produced a lot of lightning strikes, it was therefore assumed that these lightning strikes actually created the diamonds.

It is important to know that the world’s most important diamonds came from the Golconda region of India. Names such as the Koh-i-Noor, the Orlov, the Hope and the Sancy diamonds all came from this region. To this day, these diamonds are considered the finest diamonds in the world. Virtually all of these diamonds came from the alluvial deposits in the Golconda region, and it was only with the find of the prime source at the Majhgawab lamproite diamond bearing volcanic pipe, that the true source of the Indian diamonds was finally known. To this day, the Indian diamond deposits produce almost 20,000 carats annually…after almost 2400 years of production!

The Golconda name is often used to refer to the finest quality diamonds since the deposits there produced some of the finest in the world. As a result, on occasion you may get a customer who requests a “Golconda diamond,” so you should be aware of this name and the history behind it. Be aware that some unscrupulous diamond sellers make claims of selling Golconda diamonds when, in fact, they have no idea of the origin or source location of the diamond. True Golconda diamonds command a premium price but must be accompanied by the proper papers to establish provenance.
Brazil and Fluctuations in the Diamond Supply

As the European demand for diamonds grew at a fast pace during the 1600s, the production of the Indian diamond deposits began to dwindle by comparison of supply to demand. A new source was needed, and was found by accident. In 1725 a group of gold miners working alluvial deposits in the mountains of Brazil stumbled upon an area that produced diamonds mixed in with their gold ore. A new diamond source had been found!

There were two aspects of the Brazilian diamond find that proved to be important. First, once formal diamond prospecting was begun, it was found that many areas of Brazil produced diamonds. In fact, no less than 12 regions encompassing the entire country produced diamonds in various qualities and quantities. These ranged all the way from the southern region outside of Sau Paulo, to an area that encompassed the entire Amazon River delta. Second was the fact that Brazil was able to produce a huge amount of diamonds from her many sources. So many, in fact, that there were more diamonds being produced than the European markets could absorb. The result? Diamond market prices fell by almost 70% shortly after the Brazilian diamond discovery.

With the availability of a huge source of diamonds at cheap prices, the demand for diamonds in Europe increased. Eventually, the easily mined alluvial diamond deposits in Brazil started to diminish as the deposits were worked out. This caused an eventual shortage of rough diamonds in a market of huge demand, which in turn caused prices to increase dramatically. As is the case in any economy of supply and demand, the sudden decrease in diamond availability in the late 1740s, and the ensuing dramatic increase in price, caused the diamond markets to virtually collapse, as only the very rich could afford to own diamonds once again.
The Age of Mercantilism

An interesting fact about 18th century European economies would make an impact on the diamond markets in the mid-1740s that lasts to this day. During this time the main economic theory was not one of capitalism, but instead one of mercantilism. Mercantilism was Europe’s first effort to establish international trading partners and build national wealth. The key was that certain trades, such as ship building and banking, were far more profitable than being a cobbler (shoe maker) or cartwright (one who makes carts). The result was that those who established themselves in ship building would want their children to also have the ship building business. Not just to carry on the family tradition, but to carry on the family wealth.

The result of mercantilism was that many trades of the day became family heirlooms. The knowledge and trade would simply be passed down from father to son, and it was understood that the son of a cobbler would be become a cobbler. The son of a banker would become a banker. The problem was that if you were born into a cobbler’s family…you were stuck. That was what you were expected to do. That was the trade you were taught because you spent your growing up years learning the trade from your father, who learned it from his father, and so on. Therefore, you were expected to carry on the tradition and teach it to your son.

One of the facts about mercantilism was that once your family was involved in a business, you were pretty much there the rest of your life. As in any economic structure, there were trades that no one wanted to do…either because they were demeaning, or because they did not make much money. In 1740 Europe, diamonds did not make any money, or at least very little money. The supplies were gone, the cutting ability was not well advanced due to lack of technology, and the future of the diamond markets was quite glum as both the Indian and Brazilian deposits were virtually wiped out with no more known sources on which to draw.

It was also during this time that most European countries were monarchies, meaning the king or queen wielded a lot of power. So much that they could decide who was awarded what level on the mercantilism ladder of respectability and profitability. Since the Jewish communities of most European countries were considered of low status, it was determined to limit the Jewish ability to enter into a profitable trade. So….the Jews were severely limited as to what trades they could enter in an effort to insure that they had the lowest economic potential of the day. In 1740 Europe, one of the most unprofitable trades you could work in was….diamond cutter or diamond merchant. So, one of the few mercantile trades that Jewish workers were allowed to work in was…diamonds.

What the mercantilism system did not anticipate, however, was that in 1850 another major diamond discovery would be made in the Bahia region of Brazil. Once again the diamond markets flourished as both supply and demand increased significantly. Of course, by this time the only people who were involved in the diamond markets were members of the Jewish communities…everyone else abandoned the trade as it had become something of a low status trade. It was with few exceptions that only the Jewish diamond cutters knew how to properly cut diamonds, so they flourished along with the new diamond demand throughout Europe. Something quite the opposite of what the governing powers expected at the time. In spite of a depressed market in the early 1860s, the theory of mercantilism ensured the Jewish community a thriving trade, now centered in the Belgian town of Antwerp, as the art of diamond cutting was passed down father to son within their families. Due to many years be required to learn how to properly cut a diamond, this system served quite well as master diamond cutters were able to start their training at a very young age as sons helped and learned from their fathers and grandfathers in the family diamond business.

We just had a new customer comment on our appraisal and he was upset at how different our appraisal value was from a local jeweler in Canada. This is understandable because most people think that values are the same no matter where you live in the world. The truth is that appraisals will be different in the same appraisal office depending on the person doing the appraisal, their experience and examination of the gemstone and or jewelry. The value differences from town to town, state to state and country to country can differ greatly do to the amount of gem grading labs, appraisal organizations and grading value indexes. All the gem labs have differing ways of communicating quality and therefore the value, which is based on the quality parts of the jewelry. Sometimes the differences will be very significant and it does not mean that anyone is automatically wrong. It just means each company has its own way of doing appraisals and establishing values and there is no internationally or nationally uniform way for appraisals to be done. We hope that there is one national or even state-wide way to do appraisals some day in the future. Until then, we will just try to help everyone understand the fine jewelry industry and its many variations.

The appraisal training we experienced here at Merritt Jewelry, with our value index, are some of the best in the world regarding insurance replacement appraisals and we are very honored to share them. Any company that says, “our appraisals are the only correct ones and the only appraisals you will ever need” are just not worldly in their jewelry industry knowledge. It is possible that a local insurance company will ask for a local appraisal, especially for the $3,000.00+ dollar appraisals that they will have to pay for if the jewelry is lost. So, understand that there will likely be a difference in value of the appraisals and you should not necessarily insure for the full value because it will cost more for the insurance. With the internet shopping we have today the ability to find replacement jewelry at great prices has never been better. Talk to your insurer and ask what the cost differences would be for the different values and deductibles. This way you should get a good idea of what is best for your jewelry insurance replacement needs.
Warm Regards,
Patrick
Merritt Jewelry

Here is a great article from one of our main and trusted jewelry industry educational companies ISG.

Is the GIA a monopoly that is doing DeBeers-level damage to the gemology industry?
It’s a simple fact that the modern day jewelry industry was founded on an illegal monopoly: DeBeers control of diamond markets. Diamonds are the heart of the jewelry industry, and for many years the world diamond markets were controlled by this London based monopoly, which was legal in the UK but highly illegal in the United States where most of DeBeers profits were generated. This monopoly existed to the point that corporate executives from DeBeers could not enter the United States for fear of being arrested on charges related to their monopolistic control of the diamond markets dating back to World War II. Even when the American Gem Society had a DeBeers executive speak at one of their conclaves, the meeting had to be held in Canada since the executive was subject to arrest if he set foot inside U.S. borders. This monopoly was so ingrained in the industry that no one wanted to discuss all of the nasty little secrets that went along with the DeBeers monopoly, such as undue interference in local governments, disregard for environmental issues, and the knarly issue of conflict diamonds.

As always happens with these kinds of operations, what goes around eventually comes around. Today, with the decline of DeBeers, the diamond market is no longer controlled by a monopoly, (although a strong case could be made that Rapaport has replaced DeBeers in the monopolistic control of the diamond markets.)

It seems our industry is OK with monopolistic controls of our markets, as long as they make us profits.

Given the nature of the DeBeers monopoly and the potential for others to exist in our industry, the question comes to mind: Is the Gemological Institute of America really a monopoly?

Dictionary.com defines a monopoly as “The exclusive control by one company of a service or product.” Let’s review some issues surrounding the GIA and see what we find…
GIA claims to be the “Official Gemology School” of the jewelry industry.
The Gemological Institute of America has anointed themselves as the “Official Gemology School” of the jewelry industry. Seriously. I am not kidding. The “Official Gemology School”. Below is the actual Google Ad run by the GIA throughout the internet claiming to hold a legal and certified position as the jewelry industry’s “Official Gemology School”. Of course this was a major news event for all of us smaller gemology schools since we were not aware that the GIA had been bestowed this title, or by whom it was bestowed. As it turned out, this action was a false and malicious claim by the GIA in an effort to take exclusive control of the gemology education industry, thereby damaging the reputations and market value of other gemology schools in the industry.
GIA controls the jewelry industry media?

The Tibet andesine fiasco was financially the largest fraud perpetrated on consumers in the history of the jewelry industry, and required 4 years of litigation ending in a land-mark decision in the California Appeals Court. It involved over 150,000 consumers and over an estimated US$140 million in fraudulent sales.

How many of you read anything about this in the JCK, InStore Magazine or National Jeweler? I can answer this for you: None of you. Why? I asked the same question and was told that the whole thing was washed over because of the GIA involvement in the fiasco. The advertising revenue paid to the publications by the GIA is such that the GIA controls the industry media.

Based on my direct involvement with the situation, I found that this is also why you never read news of events with any other smaller gemology school covered in the US jewelry industry media. Its the GIA Show Folks, and it is a media wall generated by the GIA! No one has the advertising revenue to crack that wall open. The news you hear is what the GIA wants you to hear.

Bear in mind that the GIA is a 501(c)3 non-profit, so the situation is compounded by the fact that it is the jewelry industry contributions that make the actions of the GIA possible. Think about that.
GIA fraud cover-up?

It is a well documented fact that diamond graders at the GIA have been caught selling higher certificate grades to large diamond dealers who use their services. The GIA certificate system world-wide is so porous that there are stories on record of their certificates getting changed by internal employees to give higher diamond grades to select dealers using the GIA lab. To this day, those four GIA New York diamond graders caught selling high grades to dealers have never been exposed and never been prosecuted.

A few years ago when this newsletter reported on a case of a negligent error in a GIA diamond report that cost over $100,000.00 in litigation action, even I was subjected to threats of retaliation for having reported the situation.
Conclusion

“Exclusive control by one company of a service or product”. (dictionary.com)

False claims of being the “Official Gemology School”, using non-profit donations to influence the industry media, covering up fraudulent practices: To me this all adds up to the GIA trying very hard to sustain what appears to be their monopoly of the gemology industry.

Here is the quandary this puts us all in: Is the GIA monopoly sustainable? We have all seen what happened to the diamond markets when DeBeers lost control and Rapaport took over…pure, debilitating anarchy. The overwhelming domination of the diamond markets by DeBeers was so complete that when the DeBeer’s monopoly finally fell apart it left an industry that is still crashing to the ground in total free fall.

The GIA has so deliberately and venomously controlled the gemology industry that the very existence of high-quality, smaller gemology schools is in dire threat.

Think about what has happened to the diamond industry…now apply that to what could happen to the gemology industry.

Next time you interview a candidate with a gemology diploma from a smaller, lesser-known gemology school, take some time to learn what that candidate knows, what kind of gemology knowledge and training they have, rather than just looking for the GIA name in the diploma.

In the end, you may have a far superior gemologist in front of you. It would be extremely unfortunate if you made a decision based on the efforts of a monopoly to control your thinking…and not on the actual knowledge and training of the candidate sitting in front of you.

Make your decision based on the actual gemological knowledge of the candidate. Judge the applicant, not the name on the diploma.

Robert James FGA, GG
President, International School of Gemology Inc.

Here is one of our latest questions on Tanzanite as a wedding or every day ring. This is a very common concern and it is fun to know how to wear any ring every day.

Hi there

Is this Tanzanite piece ok to wear daily, for everyday use as an engagement ring! In the shower etc? Also is the price negotiable?

Regards
Kim

Tanzanite can be worn as a wedding ring but it is a little higher maintenance. You will have to clean it more with distilled water, mild dish soap and cool hair dryer. A shower is a great place to clean the colored stone rings if you have a toothbrush and liquid soap handy for scrubbing. Colored stones like these will look a little different when dirty, but they are easy to clean after you do it a few times. Diamond rings will get dull too if they are worn all the time so the cleaning is the key. I would not wear any ring while your gardening or working around hard objects do to stone or prong damage, especially Tanzanite rings because they can get chipped or broken more easily. Let me know if you have any other questions or call anytime.

Warm Regards from Tampa,
Patrick
Merritt Jewelry
949 278 6956

We are in a search for Ruby right now in Africa and Asia. It is a very difficult gemstone to find in high qualities but we have some great sources from Madagascar and Thailand. Ruby is one of the most replicated and treated gemstones in the industry, Like sapphire, so you have to be very sure of what your buying. Many venders and jewelers from all over the world will try to sell these man made rubies as real to get hundreds or thousands more per carat.
I was just at a show in Vegas where a dealer tried to sell a ruby necklace with about 25 perfectly matching rubies for $155,000.00. I asked them how they found so many perfectly matching rubies, which is basically impossible, and they said they got them all from one mine and that they are all natural heated. The perfectly matching clarity and color was a dead give away in this case, but if the individual ruby were in their own ring settings it would have been a little bit tougher to tell that they were man made.
My best advise would be to make sure you ask for certified gemstones. The certifications we get are from the same areas our miners are mining the gemstones so they know and are very familiar with the gemstones in that area. Here is a bit more information on ruby to help you ruby knowledge.

A ruby is a pink to blood-red colored gemstone, a variety of the mineral corundum (aluminum oxide). The red color is caused mainly by the presence of the element chromium. Its name comes from ruber, Latin for red. Other varieties of gem-quality corundum are called sapphires. Ruby is considered one of the four precious stones, together with sapphire, emerald and diamond.

The quality of a ruby is determined by its color, cut, and clarity, which, along with carat weight, affect its value. The brightest and most valuable “red” called blood-red or “pigeon blood”, commands a large premium over other rubies of similar quality. After color follows clarity: similar to diamonds, a clear stone will command a premium, but a ruby without any needle-like rutile inclusions may indicate that the stone has been treated. Ruby is the traditional birthstone for July and is usually more pink than garnet, although some rhodolite garnets have a similar pinkish hue to most rubies. The world’s most expensive ruby is the Sunrise Ruby.

We just had a customer loose a diamond out of their Pave Sapphire ring 15 months after purchase. It happens most often by wearing rings next to the ring, hitting a hard object or after sizing the ring which changes the angles on the ring. Changing the angles opens up the prongs or moves the prongs closer which moves the diamonds around. Do not fear though, we do these repairs at our cost under one year and for 10-$30.00 after a year. This is a third of what any local jeweler will charge to replace the diamond. We love to service our customers and look forward to working with you all in the future.
Warm Regards,
Patrick
Merritt Jewelry

We are amazed at how companies are selling computer pictures and not real jewelry. We think you should know exactly what is going to show up at your door when your investing 100’s or thousands of dollars. The paragraph below is to a new customer of ours that was trying to decide whether to buy a cad image or one of our real rings.

The rings from (online jewelry company) are all computer images and not real rings. All the sapphires shown on their site are dull and either heavily treated or possessing low saturation, which are important qualities in the valuation process. Also, they will have to put each ring together then ship it in 4-10 days and you do not know the quality until you receive it. Our pictures are of the actual ring you will receive and they are shipped in 24 hours via 1 day express mail (to your address in 1-2 days from payment).

We will also size your ring with the purchase so let me know what size you will need. We would never suggest buying any ring online without seeing the actual gemstone first. We will guarantee that our untreated sapphire is superior quality to any of the sapphires that (online jewelry company) show in the 1000 or under range. In Fact, they would charge over 2000.00 for the same quality sapphire we show in our pictures.

These online companies are trying to sell huge quantities by showing general computer images and not photographing the actual individual products like Merritt Jewelry does. We would rather sell “One of a Kind” rings one at a time and if that means fewer are sold that is OK by us. All our rings will come with insurance appraisals that are done by certified appraisers for international and US insurance companies.
Warm Regards,

Cleaning your jewelry safely is really easy! You can use the ultrasound and solutions for the sapphire, ruby and diamond only. All other gemstones will need distilled water, basic liquid dish soap/mild soap, tooth brush and a hair dryer with a cool setting.
1. Submerge your jewelry in the solution or distilled water.
2. Tooth brush scrub your jewelry with the solution or some mild liquid soap.
3. Submerge your jewelry in the solution or distilled water
4. Repeat brushing if still dirty.
5. Submerge your jewelry in the solution or distilled water again and swish around gently.
6. Blow dry your jewelry with the cool setting to dry your jewelry.
7. If you see some spots, rinse again with clean distilled water and blow dry again.

You have now cleaned your jewelry and saved yourself a lot of time as well as money going to a local store.
Warm Regards
Patrick
Merritt Jewelry.com