The deal seemed too good to be true. There's a website that's been selling top quality diamonds at bizarrely low prices. Prices we couldn't find at any retail outlet. Prices so low, we could buy a diamond on a public radio budget. So we did. What we got in the mail was a tiny ziploc bag containing a scintillating mystery.On today's show: the Planet Money Diamond (or whatever this sparkly rock turns out to be). We get it analyzed by the experts at the Gemological Institute of America. We investigate where it came from. And, we dive into the economics of glittery stones. Was this a new kind of internet scam? Some supply chain anomaly? Or is something just really weird going on in the world of diamonds?This episode was produced by James Sneed. It was edited by Keith Romer with help from Jess Jiang, fact-checked by Emma Peaslee, and engineered by Kwesi Lee. Alex Goldmark is our executive producer.Find more Planet Money: Facebook / Instagram / TikTok / Our weekly Newsletter.Listen free at these links: Apple Podcasts, Spotify, the NPR app or anywhere you get podcasts.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
Chapter 1: Why did Planet Money buy a mystery diamond?
A little while back, I bought something online that, frankly, seemed too good to be true. And after seeing this thing with my own eyes, I knew I had to share it with somebody. My Planet Money colleague, Sarah Gonzalez.
It's like a white envelope.
Mm-hmm, mm-hmm. I had mailed this thing to her as a kind of proposal to, you know, co-host this episode about this very strange economic mystery. And then more bubble wrap. This package had come from the Chinese e-commerce website Alibaba. Alibaba is the kind of place where you can buy like two dozen lawnmowers straight from the factory.
You got to pop the bubbles.
But what I had bought is a lot smaller.
Oh, so satisfying.
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Chapter 2: Is the diamond real or fake?
And a lot shinier.
Jeff, what is this? Is it a fake diamond or a real diamond?
Sarah.
This is not a real diamond.
According to the website that I bought it off of, that is a real diamond. It is a one carat, colorless, ideal cut diamond. It's basically an engagement ring quality diamond. That's what they told me.
Wait, this is like creme de la creme, top of the top, like perfect cut, perfect clarity. Dude, it's...
Now, the retail price for a diamond like this, it depends. If it's a natural diamond, we're talking $5,000. If it's a lab-grown diamond, we're still talking around $1,000. But that was not what Alibaba was charging.
So how much did you pay?
Um, I paid $137. What? I mean, it's not a real diamond, right? There's no way. Or is there a way? Hello and welcome to the Planet Money Diamond. I'm Jeff Guo.
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Chapter 3: How can you test a diamond at home?
Because the market for diamonds, let me tell you, it started to get very, very weird.
Yeah. No, I think it's just going to be a fake diamond. So, Jeff, when you sent me this diamond that you apparently bought sight unseen off of this website in China for $137, my first thought was, obviously it's not real, right?
Which is why we tried some experiments. So there are like tests you can do at home to see if something's a diamond or not. Do you want to try those?
Oh, yes.
They're not like definitive or anything.
Oh, like bite it?
You can like get clues. No, not bite it. Don't bite the diamond.
Like smash it? The first actual test that you had me try was to try to scratch something really hard with this diamond of ours.
Right. Because diamonds, which are made of carbon, they are the hardest naturally occurring substance on Earth.
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Chapter 4: What does the Gemological Institute of America say about the diamond?
No, no, no, no. So do you want to know the real answer, Sarah?
Oh, already? So soon?
Well, no, no, no. First, I got to tell you a story about how I figured it out.
Of course. All right. Let me get settled in here.
Okay, so before I ever mailed you the Planet Money Mystery Diamond, I actually took it on a couple adventures. We started out at the GIA, the Gemological Institute of America. They're like the diamond experts. So a couple weeks ago, okay, we're walking into the GIA. I went to one of their labs in Midtown Manhattan. Wow, this lobby is really pretty.
For the diamond industry, the GIA is like the temple of truth. It's where people take their diamonds to get poked and prodded and given a grade by expert gemologists. I met their executive vice president, Tom Moses. Hi. Hi, Tom Moses. Hi. Who was going to take me behind the scenes, which they don't usually do because the GIA inspects millions and millions of diamonds a year.
So let's just say we were in the presence of a lot of dollar signs. And I've noticed we have a security guard following us. Yes, we do. Is that just for me? Yeah, just for you. No, no, I'm kidding. I'm kidding. Tom kind of was not kidding. The whole time I was there, I had to have a security escort.
Anyway, Tom introduced me to the scientist who was going to be taking a look at the Planet Money mystery diamond.
Ulrike Daniels Johansson, senior manager of diamond research here.
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Chapter 5: Is the Planet Money diamond natural or lab-grown?
I wasn't expecting this. But hold, okay, hold on. There are diamonds, right? And then there are You know, there's there's natural diamonds and then there's like the lab grown diamonds. So is this is this where we're headed?
OK, OK. So it is true that for the last 10, 15 years, people have been growing these beautiful diamonds in the lab. But I just want to be clear, natural diamonds and lab grown diamonds, they are both real diamonds. They are chemically the exact same thing.
I mean, tell that to the real diamond crowd. But okay, I will say the big difference between natural and lab-grown is still price.
Right. So a natural diamond like this could sell for maybe $5,000. But if it's lab-grown, the price is more like $1,000. And Ulrika's machines, they could actually tell us exactly what we had. Because every diamond, it turns out, is unique. It doesn't matter if they look flawless to the naked eye. Ulrika says they all have these little defects, these little impurities, little imperfections.
It's that imprint of how it grew, how it survived in the earth, or how it was produced in a laboratory.
Like a fingerprint or like freckles.
Yes, exactly. The placement of freckles on anyone who has freckles is slightly different.
So these imperfections can tell you how a diamond came to be. And when Ulrika examined our diamond, she saw three really telling imperfections. Number one, she saw when she looked at it under the microscope.
They're teeny tiny little black specks.
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Chapter 6: Why are diamonds so valuable?
Yeah, why is that?
I'm so glad you asked because I called up the expert. Can you just say your name for us and what you do?
Yeah, so my name is Paul Zemnitsky and I'm an independent diamond industry analyst. Paul Zemnitsky is like the diamond markets guy.
He travels the world visiting mines and factories, collecting data on supply and demand. Paul says right around the time that De Beers was losing control over the supply of diamonds... they found a big new way to juice demand.
They took the same classic playbook, you know, a diamond is something you give to someone because you love them, all that stuff, and they deployed that playbook in a huge untapped market, a country with more consumers than anywhere else in the world.
China.
China.
Culturally, Chinese consumers really didn't buy diamonds prior to, say, the 2000s. So they were kind of marketing that as a new area to drive diamond demand, and it started to really catch on.
So in large part, thanks to these new Chinese customers buying into the story of diamonds and also buying a lot of diamonds, Paul says diamond prices actually hit a new peak in the 2010s.
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