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Unformatted text preview: m a monopolist’s rule book: when times are bad, hold back diamonds to support the price; when times are good, release the gems and clean
More or less the same principle, institutionalised by Sir Ernest Oppenheimer, who set up the CSO in 1934, is followed
today. De Beers varies its stocks of diamonds, and forces its partners to hold theirs back too, depending on market
conditions. In 1977, for instance, a boom year, it held just $253m of the stones. By June this year, however, a turbulent
time for the industry, the diamond stocks stashed away in the De Beers saf es were worth a staggering $4.1 billion—a
treasure trove made possible by the company’s financial strength.
Such manipulation of the market—De Beers prefers to call it "management" or "stabilisation"—does not mean that no
diamonds are genuinely scarce. "Fancies", or unusually coloured diamonds, in such shades as pink or purple, can be
extremely rare and fetch huge prices. Small, plain diamonds, however, are in fa...
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This document was uploaded on 01/19/2014.
- Fall '14
- The Land