Can Diamonds Survive A Free Market?

Thursday, August 06, 2009, Edward Jay Epstein

Despite its celebrated slogan “Diamonds Are Forever,” De Beers, which has dominated the diamond business for over a century, is discovering that diamond profits are not forever.

It reported in July that its profits for the first half of 2009 fell by no less than 99%. The problem is not that the mining giant is running out of diamonds. Its highly-efficient diamond mines in South Africa, Botswana and Namibia still supply about 40 percent of the world’s gem-sized diamonds. Nor have diamonds lost their value. They not only remain a vital part of the engagement ritual but their retail price of engagement rings has actually risen in 2009.

What is killing De Beer’s profits is the prohibitive cost of running a cartel. The cartel arrangement is necessary to sustain the illusion that diamonds are rare. Continue reading

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January 21, 2010 Posted by | News of Diamond, Too Good to Archive | 1 Comment

Who Killed God’s Banker ?

By : Edward Jay Epstein

On June 11, 1982, Roberto Calvi, the chairman of the Banco Ambrosiano, who had become know as “God’s Banker” because of the investments he made for the Vatican, vanished from Italy with a black briefcase full of documents.

One week later, his body was found hanging from an orange noose under Blackfriar’s Bridge in London; his feet submerged in the swirling waters of the Thames. His black bag was gone. Also missing was $1.2 billion from bank’s subsidiaries in the Bahamas, Nicaragua, Peru, and Luxembourg. And the Vatican was missing one-half billion dollars in loans. How did God’s banker come to be dangling at the end of a rope over the Thames? Continue reading

January 21, 2010 Posted by | Money & Fund, News of Currency | 2 Comments

More Money To Flow In Commodities

LONDON (Reuters) –

Investors will allocate even more money to commodities this year as they seek to spread risk away from more established investments such as equities, New York-based fund manager Gresham argues.

Commodities such as gold, oil, copper, as well as softs like sugar, boomed in 2009, drawing in tens of billions of dollars in investments from pension funds and wealth managers hit by the financial crisis and global economic downturn.

Gresham Investment Management LLC saw its assets under management in commodities more than double last year to over $7.5 billion, its director of research, Douglas Hepworth told Reuters. Continue reading

January 21, 2010 Posted by | Buying Gold ?, Money & Fund | Leave a comment

   

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