Dear Mr. Berko: Nearly 10 years ago, I bought a diamond ring for my wife and paid $6,600 for a beautiful, clear and bright 2.1-carat stone. A jeweler once gave us a written appraisal for $8,200. Recently, we decided to sell her ring to raise cash because our out-of-pocket health insurance costs were bankrupting us. I'd been out of a job for nearly two years.
The jeweler where we bought the ring is out of business, so we took it to another jeweler, who offered us $1,450. Needless to say, we were shocked, and when my wife got home, she became physically sick.
However, the good news is that the following day, the company that had laid me off two years previously asked me to return to work. I'm doing the same work at nearly the same pay, and I have to work only 30 hours a week.
So we don't need to sell the ring now, but do you think we will ever be able to get back what we paid for it?
Dear GJ: I'm glad you found work. However, do you know that your new part-time position allows your employer to hire you without health insurance? You may have to sell that ring.
The most awesome thing about a clear, bright and beautiful 2.1-carat diamond is that there's a silly fool who is willing to spend $6,600 to buy it. But unless you can find a wealthy Swiss admiral, I doubt you'll get your $6,600 back.
Diamonds are not precious stones; rather, the diamond market is a staged farce. The legendary De Beers cartel — which runs the diamond mines in South Africa, Namibia and Botswana — produces 80 percent of the world's diamonds. And it does its darnedest to control the remaining 20 percent by very aggressively purchasing diamonds from other mines around the world. Because of an enormous inventory (De Beers owns millions of stockpiled stones), De Beers is able to maintain high prices and perpetuate the myth that the supply is scarce. De Beers' brutish control of the market recently encouraged a U.S. court to demand that it refund millions of dollars to U.S. diamond buyers.
Jewelers advertise diamond rings, earrings, bracelets and necklaces in most newspapers. Have you ever wondered how jewelers can advertise a 1.75-carat diamond ring at a 50 percent discount from the list price and a pair of earrings for $2,500 that were recently priced at $4,000 and still make a bundle?