Nothing can withstand a diamond. If you needed to cut something very hard, such as steel or glass, because of the natural structure and strength of the stone, you use a diamond. The Chinese President is disregarding that strength. He is trying hard to change the way business is done in China, but it's like throwing a boomerang. It will always come right back to where it was before.
China has been making many changes. They were tired of all the corruption, which channeled up to the highest officers in power. So, the country decided that the time came for some major restructuring. The overhaul of the Chinese Army, in their attempts to eradicate corruption, doesn't seem to work. The players are just being replaced by others. But, the new ones are only humans. They are hungry and they too have desires.
We have seen the same type of ambitious plans fail in a big way before. The Great Leap Forward, attempt by the People's Republic of China in 1958–1961, was made in order to solve the country's economic problems by labor-intensive industrialization. The industry has since recovered completely, but leadership now wants to change the way business has been conducted for nearly a century. Most of the dramatic disasters are products of governmental hyperactivity. If only they would just follow the old economic doctrine: Laissez faire, laissez passer- let the world economy go on its own way - without intervention.
When the Chinese Officer's lady wants a diamond, no one can withstand the pressure. She will get what she wants, and he will make it happen. In celebration of the Chinese New Year, the Year of the Red Fire Monkey, we are running a pink diamond festival in our Asian branch of the website in order to help the good officer facilitate his lady's dream.
Explore the magic of the Argyle Tender Diamonds from 2015
Maybe the hardest stone of all diamonds is an Australian Pink diamond. What I mean, is that it is the most difficult to get. There are talks that Argyle has increased its production by 50%. Though there are no signs of a wide surge of intense pinks available in the market. Rather, we see plenty chocolate colors from the Argyle mine. No one on the face of this earth can deny the beauty. One can't withstand the desire to own one of their own.
Looking in retrospective, my wife was right. We sold thousands of Argyle Pink diamonds for cheap. Perhaps we should have kept them, as nothing else we posses can retain so much value. The stock market is like a wild roller coaster ride, with its crazy ups and downs. Oil as well is down. In fact, Bloomberg recently posted that "one gallon of milk is now worth about two gallons of oil!" Iron ore mining has collapsed as well. The bread and butter of China growth, is dropping by the day. The prices of so many other commodities have crashed.
Today's Oil price is a mere $28, and Iron Ore is down by 85%. The only commodities that keep consistently rising are Argyle pink diamonds.
Lot 50 of the Argyle Pink Diamond Tender 2015, a 0.50 carat Fancy Intense Pink Argyle Diamond
It isn't just China. The world is governed by insane hyperactivity and one doesn't have to look too far to see the flaws. After two terms of Mr. Obama, the Middle East is ruined. Millions of refuges are on the way, different countries are in upheaval, and the senseless killing of thousands has become a daily routine.
The financial compliance regulations with all transparency requirements interrupted the international trade completely. The financial deregulations have turned every financial transaction to a misery. The esteem of the all powerful United States of America is in the dust. No one fears the US Army any more.
The worst moments are always when the new government takes charge and begins cleaning up the corruption of previous regimes. G-D save us from them. The cleaner's cost is usually higher than the original damage, especially since it is the cleaner himself who wants the first cut of profits off the ordeal.
The jewelry industry is suffering. The minute you send money via HSBC, you're in trouble. The money disappears in the banks belly. They debit you fast, but until they credit the other party will take weeks. Old fashioned cash payments have resurfaced once again as buyers are arriving with suitcases full of money. No one really likes to work in cash, but what is a jeweler to do if a client arrives from China with 1 Mill US cash?
Leibish diamond engagement rings
Certain things never go out of fashion. In fact, it is exactly the opposite effect as planned. The governments want complete visibility and compliance, but the cash cannot be eradicated by decree. On the contrary, as regulations get stricter, the money smugglers are forced to be more sophisticated.
The jewelry industry has had a difficult year. I have heard many complain about the drop in diamond prices. But, when comparing it to the commodity prices, the fall in polished diamond prices is really marginal. Miner still won't comprehend that they have to reduce supply in order to restore the prices since they are mostly public companies. Rio Tinto proudly reports a 7% increase in iron ore production, but who needs this additional iron?
Miners would need to produce much less below the current consumption to get the iron price back to $40-$50 US (up from $28 US). Production from China's steel mills, which make half of the global supply, contracted 2.3% last year. The demand did not collapse by 20%, 30%, or 50%. In fact, this is the first major decline since at least 1991, and this small decline led to an 80% collapse of iron prices. The main cause of malaise of most of our problems is again, this ambitious hyperactivity.
It was the legendary English automobile, the Princess 4 Liter R Rolls Royce. It had a simple body but a Rolls Royce engine. It never broke down.
The car was built to last. And last it did, until the car was put into the garage for its first service with hyperactive mechanics.
My old friend, Martin Rapaport, pushed hard for the reduction of polished supply. Indian manufacturers reduced the output by 30% and reduced the stockpile of polished by 3.5 Billion US. So the Rapaport Price Index reported a price increase for the first time in a year by a few percentage points. The mood, the prices, and the sentiment of the engine of the industry started to improve. The opposite thing happened in the mining industry.
The Chinese economy doesn't have cancer. It's just the flu. But, the world still remains petrified it's contagious, and they too will be infected. My opinion is actually my grandmother's medicinal prescription, take a rest and refrain from hyperactivity.
All will be all right. Calm yourself with some colorful Leibish Jewelry.
Leibish Polnauer, President and Founder of Leibish & Co. Fancy Color Diamonds