Editor’s Note
This excerpt offers a glimpse into the exclusive world of high-end jewelry, highlighting its role in elite society and the historical prominence of Jewish traders within the global diamond industry.
In 2011, at the annual Baselworld watch and jewelry fair in Switzerland, jewelers from around the world gathered, with socialites frequently appearing on the scene. Jewelry is a must-have in the world of fame and fortune. During breaks at cafes or restaurants, one would often see groups of Jewish jewelers from Israel, wearing traditional black hats, sitting not far away. Diamonds are a traditional Jewish trade. The tight personal network formed by the Jewish people through ethnicity, religion, and family has kept diamond transactions shrouded in secrecy. Within the global network of diamond monopoly giant De Beers, diamonds are mined from Australia, Botswana, Canada, Zimbabwe, Namibia, South Africa, and Brazil, passing through European diamond cutting centers before finally reaching retailers in the United States and Japan. This vast network includes mining areas, cutting experts, bankers, channel agents, jewelry manufacturers, and wholesalers at various levels. The diamond cutting factories in Tel Aviv, Israel, serve as an important channel connecting London and New York.
In the 1970s, rapidly rising diamond prices prompted Tel Aviv to compete with De Beers. The Israelis withheld diamonds that were supposed to be shipped to New York and began building their own diamond reserves. They offered double the price to purchase unopened shipments from De Beers destined for Antwerp and New York, and also used the “Intercontinental Hotel” in Liberia as a base to buy raw diamond materials directly from African smugglers. The Israeli government and banks provided strong support. Banks offered loans covering 80% of the value with an interest rate of only 6%, far below Israel’s domestic inflation rate. By 1978, loans provided by Israeli banks for the diamond trade reached $850 million, equivalent to 5% of its gross national product. By the end of 1977, De Beers discovered that the Israelis had stockpiled 6 million carats of diamonds, with an increase of 500,000 carats per month. The supply of diamonds in New York correspondingly decreased, driving diamond prices even higher.
