FINE JEWELRY AS A PURCHASE

Diamonds are one example. Prices of diamonds have risen although the prices have escalated drastically only for certain diamonds. One reason for the rise in general is demand. The Un v States alone accounts for more than 50 percent of the world diamond jewelry market. Thanks to aggressive advertising campaigns that percentage has held true, regardless of how the market in parts of the world has increased. Japan was almost nonexistent as a diamond market ten years ago.

Today, it buys 22 percent of - world's diamond jewelry. Third are Canada, Brazil, France, and Iw each of which accounts for 3 percent of the market. Thus, the increases along with the number of people vying to buy diamonds as soon as the market doesn't meet the demand.

Another reason is that the market is controlled by De5t Consolidated Mines Ltd., through its subsidiaries. Although the organization is South Africa and London based, it controls sales 85 percent of all diamonds from all over Africa, the Soviet Union elsewhere. Monopolistic as it is, the argument offered by DeBeers that keeps even the Soviet Union in line is that diamonds are luxury item, with an intrinsic value unmatched in any other such item, that value can be maintained only by strict control.

Without Control, the market could be flooded in times of high prices, resulting diamonds being made as worthless and profitless as they are during a depression when no one has the money to buy them. The strategy has worked successfully for everyone in the diamond market except consumers. In recent years, moreover, DeBeers n charged with, or at least suspected of, buying back its own top- quality diamonds in order to push prices even higher.

A third reason is there are fewer top-quality diamonds on the market for the very good reason that there are fewer in nature. Large diamonds are usually found along beaches and near riverbanks, for h the same reason that alluvial gold is found in nuggets in similar locations, and close to the surface of the earth. As the diamond mines go deeper and deeper, fewer and fewer large diamonds are found, particularly those that meet the standards of the four Cs.