“I have never hated a man enough to give his diamonds back.”
Zsa Zsa Gabor
The general mood out there in the global world is of depression. The pundit Cassandras are living the pre-WWIII climate (http://www.businessinsider.com/world-war-could-happen-iii-trigger-2014-7). The Muslim world is in the regeneration birth pains, killing each other over the length of hijabs and width of eye-slots (always cherchez la femme, you know:)). Israel is, of course, your consistently blood gulping Satan to pin every injustice on. West is dusting off the grave dirt from Das Capital and Les Tricoteuses are evilly grinning with their toothless mouths, sharpening their ages idle knitting needles. All in all, a Gog-and-Magog kind of “merry” End of the World atmosphere of a totally control free reality.
We, the proletarians, are not bothered of course how to protect our wealth from this turmoil, simply because WE don’t have any to protect. BUT, there are the upper crust who may, somewhat subjectively, feel they are losing their G force and now floating weightless in this black chaotic earthly cosmos. The Swiss, with the new financial regulations in place since the middle of 2013, have been brutally forced to disclose the illicit cash pots of the fat dogs. Ouch….No safe heaven for the wicked 🙂
So, what does a poor rich chap to do to keep the greedy dirty hands of the government and masses off their riches? Well, there is always the good old cave stash of rocks and metals. Yes, the things that one can actually touch and feel, and liquidate, in times of need. A Fortune Magazine article from February 14th this year states that:
…Excitement has been building in recent months around the potential of diamonds to become a veritable asset class for the first time. Unlike gold, the gems currently have no spot price or conventional market besides jewelers and pawn shops….In March 2013, a group of hedge fund traders launched the Los Angeles-based Investment Diamond Exchange, where investors can buy physical diamonds (with no intention of making them into jewelry). And in September, a Chicago company called GemShares announced a partnership with the Nasdaq OMX Group NDAQ to develop the GemShares Global Investment Grade Standard Diamond Basket Index, which could be used to create an exchange traded fund backed entirely by real diamonds.” (http://fortune.com/2014/02/19/for-investors-diamonds-might-be-the-new-gold/).
Moreover, India, China and Russia have traditionally seen diamonds as investable assets. And recently, Chinese men have discovered and adopted, an up to now foreign, custom of engagement rings so the demand for the ‘consumer’ diamonds has soared.
However, it’s too early to discard gold as a traditional alternative vehicle of investment. Although it dropped about 30% from it’s peak of $1,900 per ounce, some countries hoarding gold by tons. Yes, you guessed it, China again:
“Chinese companies may have accumulated up to 1,000 tons of gold for use as collateral in financing deals rather than to meet consumer demand in recent years….The report by the World Gold Council said imported bullion was being used “to raise low-cost funds for business investment and speculation”, and was part of the wider growth in shadow banking in China..” (http://www.ft.com/intl/cms/s/0/7b3ce740-c3db-11e3-a8e0-00144feabdc0.html#axzz399Y9XfWH).
Furthermore, rumour has it that on the eve of a 2008, big corporations like Cisco et al were erecting huge vaults on their premises, hoarding bullions in case the cash runs out. Go figure.
So which will it be for the anxious rich? The sparkling ice or the traditional gold? Well, stones are easier to physically guard and move from one place to another. I am sure De Beers and Alrosa are thrilled at the prospect of a new business leeway to boost their revenue. And least but not last – lets not forget the ‘humanitarian’ aspect: it may help Africa…..Actually, maybe we all should start buying diamonds to support African economy and alleviate poverty there. I mean those of us who have managed somehow to alleviate their own…..