Bias and lie: what it takes to impose high prices

Anglo American Plc-controlled company announced selling of synthetic gem diamonds for as little as $800 a carat from September. The reaction of De Beers, a former monopoly, was rough: “Lab-grown are not special, they’re not real, they’re not unique. You can make exactly the same one again and again,” told De Beers representative to a Bloomberg journalist.

The motives behind this reaction are clear: De Beers is afraid of price depreciation, as it will force them to lower their prices on natural diamonds. And that's the way things are on the diamond market now: it's collapsing, while monopolists try to at least keep the status quo.

Thus is not the only strategy for maximizing retail prices of a diamonds. Here's the (almost) full list:

Slowing down the mines productivity and investing in innovations that lead only to increasing the costs. Maximizing production wouldn't yield profitability benefits, as supply would surpass the demand.

2) Increasing the long-term prices to make the supply / demand gap even greater and control the artificial drive value.

3) Making the obstacles for secondary markets and lab-made diamonds. If these areas would be included in the market, the producers might have found new sources of value.

4) Continue to Invest in branding rather than making diamonds a fairly traded asset like gold, which is traded by prices, not related to jewellery production. All diamond grades would benefit if traded out of jewellery market supply chain.

We clearly see that diamond industry officials doesn't want any real changes. Today, as a century ago, they continue to pursue a policy of inflating the market. Building Diamond Open Market is the only option to withstand this.