Speaker 1: This is Red Pilled America. A quick question before we
Speaker 1: start the show. How many shows are there out there
Speaker 1: like Red Pilled America. You know the answer, it's zero
Speaker 1: and why because it's hard to produce a storytelling show.
Speaker 1: Join the fanbam and support storytelling that aligns with your values.
Speaker 1: Just go to Redpilled America dot com and click join
Speaker 1: in the top menu. You'll get add free access to
Speaker 1: our entire back catalog of episodes. Help us save America,
Speaker 1: one story at a time.
Speaker 2: Previously on Red Pilled.
Speaker 1: America, diamonds were not valuable because they were rare. They
Speaker 1: were valuable because they were controlled.
Speaker 3: Central banks don't store what's fashionable. They store what works
Speaker 3: when everything else breaks.
Speaker 1: And during the onset of the Great Depression, the smart
Speaker 1: money began accumulating gold.
Speaker 4: European orders from de Beers for industrial diamonds began to climb,
Speaker 4: and Oppenheimer understood what that meant.
Speaker 1: These orders are not the actions of nations preparing for peace.
Speaker 1: They're preparing for war.
Speaker 4: Industrial diamond orders became a proxy for war preparation.
Speaker 1: Scientists at the General Electric Company achieved something that until
Speaker 1: then had been considered impossible. They created a diamond in
Speaker 1: a laboratory. I'm Patrick Carelci and.
Speaker 2: I'm Adriana Cortes.
Speaker 1: And this is Red Pilled America, a storytelling show.
Speaker 4: This is not another talk show covering the day's news.
Speaker 4: We're all about telling stories.
Speaker 1: Stories. Hollywood doesn't want you to hear stories.
Speaker 4: The media mocks stories about everyday Americans at the Globalist ignore.
Speaker 1: You can think of Red Pilled America as audio documentaries,
Speaker 1: and we promise only one thing, the truth. Welcome to
Speaker 1: Red Pilled America. It's a cold night in Brussels, January
Speaker 1: nineteen ninety two, and inside the Royal Windsor Hotel, two
Speaker 1: men sit across from one another at a small dining table.
Speaker 1: To anyone watching, this looks like nothing more than a
Speaker 1: routine business dinner, a supplier and a customer sharing a meal.
Speaker 1: But this quiet dinner will become Exhibit A and one
Speaker 1: of the most consequential antitrust cases in modern industrial history.
Speaker 1: At the table sits Peter Friends, a sales manager for
Speaker 1: General Electric's industrial diamond division. Across from him is Philip l'otier,
Speaker 1: a business executive at Diamont Boert, one of the world's
Speaker 1: largest buyers of industrial diamonds. On paper, Diamont Boert looks
Speaker 1: like just another European company, but behind the scenes, it
Speaker 1: is something more. It's owned in part by Debier's consolidated minds,
Speaker 1: the same company that's had a monopoly on engagement ring
Speaker 1: diamond for over a century. But this night isn't about romance.
Speaker 1: It's about industrial diamonds, the rough, gravelly stones used for
Speaker 1: grinding steel and shaping the modern world. At some point
Speaker 1: during the meal, low Tier quietly slides a list of
Speaker 1: upcoming de Beer's price increases for industrial diamonds. The ge
Speaker 1: man Peter Friends, takes out a pen and writes the
Speaker 1: numbers down. Moments later, Friends leaves the table, then walks
Speaker 1: to a fax machine, and he sends those numbers straight
Speaker 1: to General Electrics headquarters in Ohio. Within days, General Electric
Speaker 1: raises its own prices in near perfect alignment with Debier's,
Speaker 1: and the result across the world, the price of industrial
Speaker 1: diamonds rises, not because of scarcity or increased demand, but
Speaker 1: because the two companies that control roughly ninety percent of
Speaker 1: the global market moved together in silence. To the US
Speaker 1: Department of Justice, this was textbook collusion, two dominant players
Speaker 1: sharing pricing information then coordinated action a cartel dinner hidden
Speaker 1: in plain sight. But what makes this moment so extraordinary
Speaker 1: isn't just the potential illegality. It's the irony, because General
Speaker 1: Electric and De Beer's were never supposed to be allies.
Speaker 1: In fact, they began as mortal enemies. We're at the
Speaker 1: finale of our series of episodes entitled what makes something Valuable?
Speaker 1: We're looking for the answer to that question by telling
Speaker 1: the story of Diamond Powerhouse to Beers, so.
Speaker 4: To pick up where we left off in our last episode.
Speaker 4: By the early nineteen fifties, de Beers had done something
Speaker 4: no company in history had ever accomplished. It had taken
Speaker 4: a stone once reserved for kings and turned it into
Speaker 4: a universal symbol of love. Diamonds had defeated pearls. They
Speaker 4: had conquered Hollywood and embedded themselves into marriage status, aspiration,
Speaker 4: and identity itself. A proposal without a diamond felt almost illegitimate,
Speaker 4: And behind that cultural victory stood a the corporate reality
Speaker 4: that was just a staggering. By the mid nineteen fifties,
Speaker 4: de Beers controlled more than ninety percent of the world's
Speaker 4: diamond supply, and not just gem quality stones, glittering in
Speaker 4: jewelry cases, rough imperfect industrial diamonds that powered the modern
Speaker 4: world as well. These were the stones that cut steel,
Speaker 4: drilled through rocks, and shaped aircraft parts, tank armor, jet engines,
Speaker 4: oil wells, and precision weapons. They were the hidden backbone
Speaker 4: of the twentieth century industry, and prior to the mid
Speaker 4: nineteen fifties, de Beers controlled them all. This was the
Speaker 4: part of the diamond Empire. Few consumers ever saw the
Speaker 4: central selling organization, the enforcement arm of the de Beer's cartel,
Speaker 4: didn't just regulate glamour. It regulated factories, supply chains, and
Speaker 4: manufacturing timelines. If you wanted industrial diamonds, you went through
Speaker 4: de Beers. There was no alternative, and for most of
Speaker 4: the world that monopoly was accepted as simply the cost
Speaker 4: of doing business. But further the United States, that condition
Speaker 4: was intolerable. America had no diamond mines, no domestic supply,
Speaker 4: no independent leverage. Every drill bit, grinding wheel, and position
Speaker 4: tool that relied on diamond abrasives came from a foreign
Speaker 4: cartel controlled by de Beers, a cartel headquartered in Southern
Speaker 4: Africa with deep ties to Britain and no obligation real
Speaker 4: or moral to American national interests. During World War II,
Speaker 4: this dependency had already made US planners deeply uncomfortable. Diamonds
Speaker 4: were strategic in war. They were used to machine tank parts,
Speaker 4: shape aircraft engines, and manufacture weapons with tolerances measured in
Speaker 4: thousands of an inch, and yet the United States had
Speaker 4: been forced to rely on a monopoly it did not control.
Speaker 4: To Washington, this was more than a market issue. It
Speaker 4: was a national security problem. And as the World War
Speaker 4: II fighting intensified, de Beers made clear where its priority stood. Britain,
Speaker 4: the heart of the Empire, came first. Everyone else the
Speaker 4: United States noticed. American officials grew increasingly uneasy as they
Speaker 4: watched a foreign cartel dictate the flow of a material
Speaker 4: essential to wartime manufacturing. Requests for transparency were met with deflection.
Speaker 4: Inventory levels were treated as proprietary secrets. Allocation decisions were
Speaker 4: made behind closed doors in London and Johannesburg. From Washington's perspective,
Speaker 4: the situation was intolerable. Then came the rumors. Intelligence reports
Speaker 4: began to surface that millions of carrots of industrial diamonds
Speaker 4: were finding their way to Nazi occupied Belgium. Belgium had
Speaker 4: long been a center of diamond industry, but under German control,
Speaker 4: any material flowing through Antwerp was by definition serving the
Speaker 4: access war effort. To American analysts, that implication was unavoidable.
Speaker 4: There was only one entity that controlled large stockpiles of
Speaker 4: diamonds to beer. US intelligence tracked one smuggling operation into
Speaker 4: occupied territory, but when investigators tried to follow the trail
Speaker 4: further back towards the mines.
Speaker 2: It vanished.
Speaker 4: The supply chain dissolved into shell companies, intermediaries, and deniable transactions.
Speaker 4: Nothing could be conclusively proven, but suspicion hardened into belief.
Speaker 4: American officials pressed Britain to investigate to Beers directly. Britain declined. Instead,
Speaker 4: they suggested a so called security review be performed. The
Speaker 4: experts that would be selected to conduct it would be
Speaker 4: mining engineers and diamond specialists, all approved by the head
Speaker 4: of de Beers himself, Sir Ernest Oppenheimer. To Washington, the
Speaker 4: approach looked less like an investigation and more like a
Speaker 4: performance trust collapsed. Internal memos from the era described throwing
Speaker 4: alarm amongst defense planners. One conclusion surfaced again and again
Speaker 4: in classified discussions in the next war, the United States could.
Speaker 2: Be cut off entirely.
Speaker 4: De Biers controlled a choke point for diamonds. This was
Speaker 4: not paranoia, it was math. If De Beers chose to
Speaker 4: restrict shipments or redirect them, the US industrial machine would
Speaker 4: grind to a halt within months. Aircraft production would slow,
Speaker 4: tooling precision would degrade. Weapons manufacturing would suffer cascading failures.
Speaker 4: A modern army, it turned out, could not function without
Speaker 4: diamond dust. As the war wound down, the message in
Speaker 4: Washington was clear. The United States could never again allow
Speaker 4: a foreign cartel to control a material so central to
Speaker 4: national defense. The war ended in nineteen forty five, but
Speaker 4: the unease did not the same year, the US Justice
Speaker 4: Department finally moved against the diamond cartel. A formal antitrust
Speaker 4: case was filed against De Beers, accusing it of monopolizing
Speaker 4: the global diamond trade, including in still diamonds vital to
Speaker 4: American defense, but the case collapsed almost immediately. De Beer's
Speaker 4: had no offices on US oil, no executives within reach
Speaker 4: of American courts, and no assets the government could seize.
Speaker 4: So Washington changed their tactic. If it couldn't break the
Speaker 4: cartel through the courts, it would break its leverage through science.
Speaker 1: Life can be pretty stressful these days. You want to
Speaker 1: know what makes me feel better? Licorice from the Licorice Guy.
Speaker 1: Call me crazy, but it's true because I love licorice.
Speaker 1: Longtime listeners of bread Piled America know that licorice is
Speaker 1: my absolute favorite candy, and the very best licorice, hands down,
Speaker 1: comes from the Licorice Guy. I know licorice, and it
Speaker 1: doesn't get any better than this. What truly sets it
Speaker 1: apart is its flavor and its freshness. The softness of
Speaker 1: this licorice will blow your mind. I've never had anything
Speaker 1: like it. The Licorice Guy offers jumbo or licorice in
Speaker 1: nostalgic seasonal flavors a red, blue, raspberry, cinnamon, watermelon, black,
Speaker 1: and apple. Trust me, they are all delicious. What I
Speaker 1: also love about the Liquorice Guy is that it's an
Speaker 1: American family owned business, and you all know that I'm
Speaker 1: a big proponent of supporting American companies. Right now, Red
Speaker 1: Pilled America listeners get fifteen percent off when you enter
Speaker 1: RPA fifteen at checkout. Visit Licoriceguide dot com and enter
Speaker 1: RPA fifteen at checkout that's licoriceguide dot com. They ship daily,
Speaker 1: treat yourself and those you love, and taste the difference.
Speaker 2: Welcome back to red pilled America.
Speaker 4: So by the end of World War Two, the US
Speaker 4: Justice Department filed an antitrust case against a Beers, accusing
Speaker 4: it of monopolizing the global diamond trade, including industrial diamonds
Speaker 4: vital to American defense. But the case collapsed almost immediately.
Speaker 4: De Beers had no offices on US soil, no executives
Speaker 4: within reach of American courts, and no assets the government
Speaker 4: could see. So Washington changed their tactic. If it couldn't
Speaker 4: break the cartel through the courts, it would break its
Speaker 4: leverage through science. In the late nineteen forties, the US
Speaker 4: government quietly began laying the groundwork for a domestic alternative.
Speaker 4: The same wartime research apparatus that had produced radar, jet
Speaker 4: engines and the atomic bomb was repurposed for a new mission.
Speaker 4: The Office of Scientific Research and Development and its successor
Speaker 4: agency began pouring money into fundamental material science. High pressure physics,
Speaker 4: carbon crystallization, metallurgy at extreme temperatures, all components needed to
Speaker 4: theoretically make diamonds in a lab, Scientists experimented with massive
Speaker 4: presses capable of exerting pressures found only deep inside the Earth.
Speaker 4: They toyed with graphite behavior under heat and stress, and
Speaker 4: designed furnaces that could hold temperatures high enough to force
Speaker 4: carbon atoms into new arrangements. Inside the Pentagon, industrial diamonds
Speaker 4: were formally classified as a critical material. Internal mammals warned
Speaker 4: that foreign controlled supply chains were unacceptable, that reliance on
Speaker 4: a single overseas cartel posed an existential risk, and quietly
Speaker 4: American corporations were encouraged to act. Companies like General Electric
Speaker 4: GE had the engineers, capital and laboratories, and now they
Speaker 4: had a mandate reduce dependence onto beers, create a domestic
Speaker 4: source of industrial diamonds, and break the choke point. Sometime
Speaker 4: in the early nineteen fifties, GE launched what it called
Speaker 4: the Super Pressure Project, a secret internal program aimed at
Speaker 4: doing what no one had ever done before, produced diamonds
Speaker 4: without minds. At first, even insiders weren't.
Speaker 2: Sure it was possible.
Speaker 4: Diamonds weren't just carbon. They were carbon arranged in a
Speaker 4: very specific lattice, forged under crushing pressure and intense heat
Speaker 4: over a long geological time.
Speaker 2: But that was the old assumption.
Speaker 4: What if nature's timetable could be accelerated, the Earth's mantle
Speaker 4: recreated in a machine, general election should pursue the answer
Speaker 4: to these questions, and by the mid nineteen fifties they
Speaker 4: had a breakthrough.
Speaker 5: In nineteen fifty four came a landmark in Man's search
Speaker 5: for knowledge about his world. Scientists of the General Electric
Speaker 5: Company in the United States produced man made diamond for
Speaker 5: the first time.
Speaker 1: Inside GE's secret super pressure project, scientists subjected ordinary carbon
Speaker 1: graphite to conditions that until then existed only deep inside
Speaker 1: the Earth pressures, approaching sixty thousand atmospheres temperatures above fifteen
Speaker 1: hundred degrees celsius. They combined carbon with metal catalysts and
Speaker 1: forced it violently into a new form. The result was
Speaker 1: a crystal with the same atomic lattice as a natural diamond,
Speaker 1: the same hardness and structure, the same fundamental identity. These
Speaker 1: were not diamond imitations. There were diamonds, but they were
Speaker 1: not diamonds for engagement rings. They were small, rough, and granular.
Speaker 1: They were industrial diamond. And that distinction mattered because for
Speaker 1: decades the beers had treated industrial diamonds as an afterthought,
Speaker 1: a byproduct of gem mining. Now, for the first time,
Speaker 1: a company outside the cartel could produce diamonds on demand.
Speaker 1: De Beers didn't yet realize it, but the era of
Speaker 1: a diamond being forever quietly began to crack. For the
Speaker 1: first time since Cecil Roads consolidated the diamond fields of
Speaker 1: South Africa, de Beers did not control all diamond supply.
Speaker 1: A US based corporation could now produce diamonds without asking
Speaker 1: permission from the Earth or from the De Beer's cartel,
Speaker 1: and Ernest Oppenheimer understood immediately what that meant, because even
Speaker 1: though these early synthetic diamonds weren't suitable for jewelry, they
Speaker 1: attacked the monopoly at its most sensitive point. Control. Diamonds
Speaker 1: had always drawn their power from scarcity, from the idea
Speaker 1: that they were rare, that they arrived only on nature's timetable.
Speaker 1: Had just demonstrated that this was no longer true, at
Speaker 1: least not for industrial use. And once that spell was
Speaker 1: broken in machine shops, it was only a matter of
Speaker 1: time before the question arose, if diamonds can be made
Speaker 1: for industry, why not for jewelry. De Beers understood the
Speaker 1: danger immediately, and it quietly began making synthetic diamonds itself.
Speaker 1: Ernest Oppenheimer died in nineteen fifty seven, but unlike when
Speaker 1: Rhoades passed, there was no power vacuum. The cartel transitioned
Speaker 1: smoothly from founder to air. Ernest's son, Harry Oppenheimer, was
Speaker 1: already deeply embedded in the business before his father's death.
Speaker 1: He became chairman of Anglo American in nineteen fifty seven,
Speaker 1: and three years later chairman of de Beers, with Harry
Speaker 1: at the helm. In the nineteen sixties, de Beers launched
Speaker 1: its own high pressure, high temperature research programs, the same
Speaker 1: basic approach ge had pioneered. Over time, this secretive research
Speaker 1: arm would formalize into a company with an almost ironic name,
Speaker 1: Element six, reference to carbon's position on the periodic table,
Speaker 1: the building block of diamonds. By the nineteen eighties, you
Speaker 1: would have thought these two behemoth companies would have been
Speaker 1: locked in a brutal zero sum war. On one side,
Speaker 1: to Beers, a century old cartel that had mastered scarcity,
Speaker 1: psychology and control. On the other hand, General Electric, the
Speaker 1: American industrial giant that had learned how to manufacture diamonds,
Speaker 1: but the two weren't at war. The two companies instead
Speaker 1: circled each other cautiously, almost respectfully. As the eighties came
Speaker 1: to a close, the battlefield had stabilized, not into free competition,
Speaker 1: but into something colder, a duopoly. Together, ge and de
Speaker 1: Beers controlled roughly ninety percent of the industrial diamond market.
Speaker 1: They did not need to fight openly. In fact, fighting
Speaker 1: would be disastrous. If either side flooded the market too aggressively,
Speaker 1: prices would collapse. Stability became more valuable than victory, and
Speaker 1: so without formal treaties or public agreements, the industry settled
Speaker 1: in to a tense equilibrium, two giants, one market, and
Speaker 1: a shared interest in keeping diamonds natural and synthetic expensive.
Speaker 1: The two companies learn to move carefully, to watch each other,
Speaker 1: and eventually to align, which brings us back to Brussels
Speaker 1: in January nineteen ninety two, at the Royal Windsor Hotel,
Speaker 1: in a polished dining room, with two men sitting across
Speaker 1: from each other at a small table, the ge man
Speaker 1: Peter Friends, and the executive connected to De Beer's Peter Lotier.
Speaker 1: After dinner, Friends takes de Beer's upcoming price increases and
Speaker 1: faxes those prices directly to GE's headquarters in Ohio. Within days,
Speaker 1: General Electric raises its own industrial diamond prices in parallel
Speaker 1: with de Beers to the US Justice Department. This is
Speaker 1: textbook price fixing, and in nineteen ninety four federal prosecutors
Speaker 1: make their move. General Electric is indicted, so is Debier's,
Speaker 1: though only on paper because de Beer's refuses to appear
Speaker 1: in U s Court g egos to trial. Its defense
Speaker 1: is technical, careful, and narrowly successful. Prosecutors cannot prove that
Speaker 1: the corporation itself knowingly directed collusion without access to Deber's
Speaker 1: internal records unreachable. As long as Debier's remains outside US jurisdiction,
Speaker 1: the case weakens. General Electric is eventually acquitted, but Debier's
Speaker 1: remains under indictment, and the consequences are immediate and lasting
Speaker 1: for years afterward. Debier's executives avoided traveling to the United States,
Speaker 1: entirely knowing they could be arrested the moment they landed.
Speaker 1: The cartel that once operated visibly, confidently and above scrutiny,
Speaker 1: was now exposed. Russia was beginning to sell outside the cartel.
Speaker 1: Canada was developing an independent diamond supply, Australia was moving
Speaker 1: its stones off the de BER's pipeline, and far more
Speaker 1: dangerous than any newly discovered mind technology was accelerating. The
Speaker 1: indictment over Brussels didn't end the diamond cartel, but it
Speaker 1: marked the moment when its powers stopped being absolute. De
Speaker 1: Biers was no longer the unquestioned master of the diamond world.
Speaker 1: It was a company under pressure from governments, from competitors,
Speaker 1: and from science itself. In two thousand, the once head
Speaker 1: of de Bers, Harry Oppenheimer, passed away. His son, Nicki Oppenheimer,
Speaker 1: had taken over De Beers two years earlier, and he
Speaker 1: did something unthinkable. The same year his father died. Niki
Speaker 1: started to dismantle the cartel model, the very system that
Speaker 1: had made to Bers powerful. Cecil Roads built the monopoly,
Speaker 1: or Nestoppenheimer perfected the cartel, Harry Oppenheimer preserved it, and
Speaker 1: Nicki Oppenheimer dissolved it. After more than a century of
Speaker 1: single channel control, De Beers officially ended the central selling
Speaker 1: organization's dominance over global diamond distribution. In its place, to
Speaker 1: Beer embarked on a new strategy, one that sounded almost
Speaker 1: mundane by comparison. It would become a normal company by competing, marketing,
Speaker 1: and selecting partners instead of commanding obedience. This was not evolution,
Speaker 1: it was retreat. The cartel was over in two thousand
Speaker 1: and one, De Biers was taken private. Ownership was consolidated
Speaker 1: among three key players, Anglo American, the Oppenheimer family, and
Speaker 1: the government of Botswana. Removed from public markets, de Beers
Speaker 1: could restructure quietly without shareholder's scrutiny and prepare for a
Speaker 1: future no longer built a monopoly. But there was another motive.
Speaker 1: For decades, De Biers had avoided the United States, unwilling
Speaker 1: to subject itself to antitrust enforcement. Now, with the cartel
Speaker 1: effectively dismantled, the company needed to clean up its legal exposure.
Speaker 1: That meant resolving its long running conflict with the US
Speaker 1: Justice Department. De Biers ultimately settled its anti trust issues,
Speaker 1: paying millions in fines and accepting restrictstions that cleared a
Speaker 1: path for limited re entry into the American market. The
Speaker 1: company that once dictated terms to governments was now negotiating permission.
Speaker 1: And then came the final signal. Of what was really
Speaker 1: happening in the diamond industry.
Speaker 4: In twenty eleven, the Oppenheimer family, the dynasty that had
Speaker 4: transformed to beers into the most successful cartel in modern history,
Speaker 4: sold its remaining stake to Anglo American. Just like that,
Speaker 4: the family that had ruled the diamond world for nearly
Speaker 4: a century was gone. To some, it looked like a
Speaker 4: simple business decision, but to the more discerning watchers it
Speaker 4: appeared to be foresight because by twenty eleven, the pressures
Speaker 4: that had cracked the cartel were no longer peripheral.
Speaker 2: They were central.
Speaker 4: Labs that synthesized diamonds were improving. Detection between natural and
Speaker 4: lab grown diamonds was getting harder. Consumers were beginning to
Speaker 4: ask uncomfortable questions. If lab grown diamonds are chemically diamonds
Speaker 4: and experts can't easily tell them apart, aren't they just
Speaker 4: real diamonds? The forever diamond illusion that had held for
Speaker 4: one hundred years was still standing, but it was no longer.
Speaker 2: Stable, and the people.
Speaker 4: Who knew at best were getting out. Because you see,
Speaker 4: the Oppenheimers knew that scientists had made a breakthrough forty
Speaker 4: years earlier, and that breakthrough was finally becoming economically viable.
Speaker 1: Want to listen to Red Pilled America ad free, then
Speaker 1: become a backstage subscriber. Just go to Redpilled America dot
Speaker 1: com and click join in the top menu. Join the
Speaker 1: fanbam and help us save America one story at a time.
Speaker 2: Welcome back to Red Pilled America.
Speaker 4: In the early nineteen seventies, Deep inside General Electrics labs,
Speaker 4: something quietly extraordinary happened. GE scientists succeeded in producing something new.
Speaker 4: Not dark, opaque diamonds for grinding wheels, but gem quality
Speaker 4: diamond perfectly crystalline, chemically identical to stones pulled from Earth,
Speaker 4: the kind of diamonds that were mounted on engagement rings
Speaker 4: and branded as Forever. The BBC reported on g's breakthrough
Speaker 4: in nineteen seventy.
Speaker 6: Although industrial diamonds have been manufactured before, this secret recipe
Speaker 6: will produce the world's first synthetic gem diamonds. Graphite granules
Speaker 6: are squeezed and fused into a pure, unmarked diamond crystal,
Speaker 6: and they claim that it's fit for the brow of
Speaker 6: a prince or the left hand of a pretty girl.
Speaker 4: It was a stunning moment, and yet the diamond cartel
Speaker 4: didn't feel it.
Speaker 2: Because there was a catch, actually several.
Speaker 4: First, the process was staggeringly expensive. The stones were still small,
Speaker 4: typically around a carrot or less, and producing them required
Speaker 4: enormous energy, massive presses, and extreme temperatures. In other words,
Speaker 4: g could make gem diamonds, but at a cost so
Speaker 4: high that they posed no immediate threat to the natural
Speaker 4: diamond business. At the time, even optimists believed these stones
Speaker 4: would remain scientific curiosities, too expensive, too limited, and too impractical.
Speaker 4: The illusion of diamond scarcity remained intact. But by the
Speaker 4: nineteen eighties that illusion began to weaken, not publicly but technically,
Speaker 4: because GE wasn't alone anymore. Multiple actors had cracked the
Speaker 4: same basic problem Deber's own research teams, Soviet and later
Speaker 4: Russian labs, as well as Japanese and European material scientists.
Speaker 4: All of them could now produce gem quality diamonds in
Speaker 4: a lap, not cheaply, but reliably. High quality Yellow diamonds
Speaker 4: in particular, became easier to manufacture and quietly without fanfare.
Speaker 4: Some of these stones began to slip into the market,
Speaker 4: occasionally mixed with natural diamonds, and passed along without disclosure
Speaker 4: because no doubt, some unscrupulous people in these labs knew
Speaker 4: that detection was becoming difficult Under a jeweler's loop. Many
Speaker 4: of these stones were indistinguishable from natural diamond. Synthetic gems existed,
Speaker 4: but they were niche. The public remained unaware. The diamond
Speaker 4: myths survived another decade, but in the nineteen nineties the
Speaker 4: quiet trickle became a stream. Russian labs expanded their high.
Speaker 2: Pressure, high temperature production.
Speaker 4: They created more stones and lab facilities, and those lab
Speaker 4: gems began to cross their borders. The number of players
Speaker 4: capable of producing gem quality synthetics grew, and with each
Speaker 4: new lab, the costs to produce gem quality diamonds began
Speaker 4: to shrink. Diamonds, once defined by geological rarity, were becoming
Speaker 4: a manufactured product, not yet mass market or.
Speaker 2: Cheap, but no longer unique.
Speaker 4: The lesson from pearls loomed in the background. Cultured pearls
Speaker 4: hadn't destroyed natural pearls overnight. They had done something subtler
Speaker 4: and far more devastating. They had eroded exclusivity, and diamonds
Speaker 4: were now walking the same path. The technology existed, as
Speaker 4: did the capability all that remained was scale. In the
Speaker 4: late nineteen nineties, just as Nicky Oppenheimer was taking the
Speaker 4: helm of de Beers, a small Silicon Valley based company
Speaker 4: called Apollo Diamond began experimenting with a radically different method
Speaker 4: of diamond creation, not crushing carbon under impossible pressure, but
Speaker 4: growing it. The process was called chemical vapor deposition or CVD,
Speaker 4: and here's how it worked. A tiny sliver of diamond,
Speaker 4: no bigger than a grain of salt, was placed inside
Speaker 4: a sealed chamber. Carbon rich gases were pumped in, energy
Speaker 4: was applied, and then slowly, layer by layer, atom by atom,
Speaker 4: diamond began to grow, not as random crystal, but as
Speaker 4: a single, continuous lattice. This wasn't imitation, This was carbon
Speaker 4: arranging itself into the exact same structure as natural diamond.
Speaker 4: Like pearls, the rarity of diamonds was always vulnerable because
Speaker 4: it was a chemical problem. Again, unlike gold, which is
Speaker 4: a nuclear problem. Remember, for gold, you must change the
Speaker 4: number of protons in an atom. It can technically be
Speaker 4: done betted up to a billion dollars per ounce. There
Speaker 4: is no chemical shortcut. But diamonds, on the other hand,
Speaker 4: form under chemical processes that humans can replicate much easier
Speaker 4: than a nuclear process. At first, Apollo Diamond stayed silent.
Speaker 4: They quietly filed patents, refined their techniques, and improved clarity
Speaker 4: and consistency. By the early two thousands, they were producing
Speaker 4: near colorless gem grade diamonds, the kind that could be
Speaker 4: set into jewelry, at a price that started to compete
Speaker 4: with the mining costs of natural diamonds. The company tried
Speaker 4: to keep the breakthrough quiet, but in two thousand and
Speaker 4: three US leaked.
Speaker 7: A tiny diamond seed is fused with carbon and heat
Speaker 7: and grows into a full fledged gem, something it takes
Speaker 7: millions of years to do in nature.
Speaker 4: Lab grown gem quality diamonds were no longer theoretical.
Speaker 2: They were here.
Speaker 4: In two thousand and four, Apollo Diamond made its announcement public.
Speaker 4: They had successfully grown single crystal near colorless CBD diamonds
Speaker 4: stones suitable for engagement rings. Now they could be done
Speaker 4: at a much cheaper cost than with the high pressure,
Speaker 4: high temperature technique developed in the nineteen fifties. This was
Speaker 4: the moment everything changed. This wasn't a finite amount of
Speaker 4: diamonds found in some new mine in South Africa. It
Speaker 4: was an infinite supply. Gem quality diamonds were no longer
Speaker 4: constrained by nature. They were constrained only by energy, equipment,
Speaker 4: and economics, and that meant something terrifying for an industry
Speaker 4: built on scarcity. As lab grown producers began marketing their stones,
Speaker 4: some used a phrase that sent a chill through the
Speaker 4: diamond world, cultured diamonds.
Speaker 7: I think conventional wisdom would say that diamonds.
Speaker 1: Only come from the ground, and that notions It's not true.
Speaker 7: The company calls the creations cultured diamonds, like cultural pearls.
Speaker 4: The use of the phrase wasn't an accident. It was
Speaker 4: deliberate because everyone in the gem trade knew what it
Speaker 4: happened to pearls.
Speaker 3: Diamonds and pearls failed because they lacked true scarcity, especially
Speaker 3: now that they can make diamonds and pearls.
Speaker 4: That's Kevin de Merritt, founder of Lear Capital, one of
Speaker 4: the world's premiere precious metal companies.
Speaker 3: So gold and silver can't be manufactured. Every ounce on
Speaker 3: Earth came from a fian Nite geological process that took
Speaker 3: millions of years. Mining is expensive, slow, and increasingly difficult,
Speaker 3: so it gets more expensive over time and even with
Speaker 3: modern technology, global gold supply grows at about one or
Speaker 3: two percent a year. The economy grows faster than that.
Speaker 3: When you have this slow rate of being able to
Speaker 3: pull it out of the ground and it's scarce and
Speaker 3: it's finite, that's what's going to create the value here.
Speaker 3: You can grow a pearl in a lab, you can
Speaker 3: grow a diamond, and lab you can't grow gold.
Speaker 4: Cultured pearls had looked identical to natural ones had flooded
Speaker 4: the market, and they had permanently destroyed the aura and
Speaker 4: the price of natural pearls.
Speaker 2: Now the same.
Speaker 4: Language was being applied to diamonds, and the implication was obvious.
Speaker 4: If pearls could be grown and diamonds could be grown,
Speaker 4: then what exactly was a natural diamond worth. The traditional
Speaker 4: diamond industry pushed back hard. They insisted on a different word, synthetic,
Speaker 4: because years earlier, the diamond cartel had successfully fended off
Speaker 4: another gem using this same argument. Cubic zirconia or CZ
Speaker 4: is a laboratory created crystal that can be manufactured cheaply, consistently,
Speaker 4: and ats scale. It was developed in the late nineteen
Speaker 4: seventies but had a big cultural moment in the eighties. Visually,
Speaker 4: it checked many of the boxes that mattered. To consumers,
Speaker 4: It sparkled, it caught the light, and to the untrained eye,
Speaker 4: it looked a lot like a diamond. Jewelry companies embraced
Speaker 4: it quickly. They became ubiquitous almost overnight, and sales exploded
Speaker 4: across mass market jewelers. Cubrick Zirconia didn't just sell, it
Speaker 4: normalized the idea that a diamond look alike was acceptable.
Speaker 4: And yet despite all that, cubic zirconia did not collapse
Speaker 4: the diamond market, not even close, because everyone knew what
Speaker 4: it was and was not. Cubrick Zirconia was never presented
Speaker 4: as a diamond, It was never chemically identical, It was
Speaker 4: never marketed as the real thing. Instead, it occupied a
Speaker 4: very specific cultural lane. Cubic Zirconia became shorthand for imitation,
Speaker 4: fake bling. The distinction was clear, and de Beers made
Speaker 4: sure it stayed that way. Diamonds were framed as real,
Speaker 4: cubrick zirconia as synthetic, and the public accepted that boundary
Speaker 4: without much resistance. But beneath the surface, cubric zirconia revealed
Speaker 4: something important. It proved that there was enormous pent up
Speaker 4: demand for the look of diamonds, even without the geology,
Speaker 4: the romance, or the mythology. If a product could one
Speaker 4: day deliver diamond sparkle and diamond chemistry at scale, the
Speaker 4: rules would change.
Speaker 1: The Oppenheimer's knew that day arrived. When Apollo Diamond began
Speaker 1: creating lab grown gem quality diamonds for jewelers. The situation
Speaker 1: was deeply unsettling. Even under a jeweler's loop that common
Speaker 1: one eye magnifying glass, they couldn't tell the difference. As
Speaker 1: one jewel expert put it.
Speaker 7: I couldn't distinguish which one is men made and the natrol.
Speaker 1: To distinguish lab grown from natural diamonds, he needed advanced equipment, spectroscopy,
Speaker 1: fluorescence analysis, high end imaging machines, tools found in laboratories,
Speaker 1: not jewelry counters. This was nothing like Cubric's or conia.
Speaker 1: These were diamonds. The illusion that had held for a
Speaker 1: century that diamonds were rare because nature made them rare
Speaker 1: was now really cracking. The Oppenheimers knew exactly where this
Speaker 1: story ended. They had seen it before with pearls, which
Speaker 1: is likely why they sold their Deber's shares in two
Speaker 1: thousand and eleven. By then, lab grown diamond manufacturing had
Speaker 1: quietly entered its mass production phase. Facilities in China, India, Russia,
Speaker 1: and the United States scaled up, output costs dropped, yields improved,
Speaker 1: stones got larger, clearer, and more consistent, and consumers were
Speaker 1: beginning to notice the pitch was irresistible. The same diamond
Speaker 1: chemically identical at a discount price. In twenty eighteen, lab
Speaker 1: grown diamonds cost about twenty percent less than natural grown diamonds.
Speaker 1: Consumers on a budget began turning to lab grown gems.
Speaker 1: The shift was undeniable, and that same year Debiers did
Speaker 1: something unthinkable. It entered the lab grown gem quality market itself.
Speaker 1: The company that had spent more than a century defending
Speaker 1: diamond scarcity launched its own lab grown brand. They called
Speaker 1: it light Box. The move stunned jewelers. Light Box diamonds
Speaker 1: were sold at a flat price eight hundred dollars per
Speaker 1: care it regardless of clarity, color or cut. No grating,
Speaker 1: mystique or romantic language like forever was added, just a price,
Speaker 1: and the messaging was surgical. Light Box diamonds were positioned
Speaker 1: as fun, playful fashion jewelry, not engagement rings or heirlooms
Speaker 1: or investments. The strategy was clear. If lab grown diamonds
Speaker 1: couldn't be stopped, they would be devalued. Debiers wanted to
Speaker 1: crash the price, strip the romance, and frame them as
Speaker 1: disposable like cubic zirconia, all to preserve natural diamonds as
Speaker 1: the only stones that truly mattered. It was a calculated gamble,
Speaker 1: and in the short term it worked. Lab grown diamond
Speaker 1: prices collapsed forty percent almost overnight. But what debiers could
Speaker 1: not contain was the psychological spillover, because once consumers accepted
Speaker 1: that lab grown diamonds were real diamonds, not fake like
Speaker 1: cubic zirconia, the price gap became impossible to ignore, and
Speaker 1: the shock didn't stop with lab grown stones, it bled
Speaker 1: into the natural market. Between twenty eighteen and twenty nineteen,
Speaker 1: polished natural diamond prices fell roughly ten percent, then another
Speaker 1: fifteen percent. For the first time since the cartel era.
Speaker 1: The market was behaving like a market, a luxury category,
Speaker 1: responding to supply, substitution and price pressure. Then came acceleration.
Speaker 1: By twenty nineteen, lab grown diamond production was doubling year
Speaker 1: over year. Retailers began openly promoting lab grown engagement rings
Speaker 1: not as alternatives, but as smart choices. In twenty twenty,
Speaker 1: the pandemic pushed diamond shopping online, where price comparisons were
Speaker 1: unavoidable and romance was filtered through spreadsheets. Younger buyers, raised
Speaker 1: on transparency not tradition, began choosing size and value over narrative.
Speaker 1: By twenty twenty two, lab grown diamonds accounted for roughly
Speaker 1: half of all US engagement rings by unit volume, and
Speaker 1: by twenty twenty three, wholesale lab grown diamond prices had
Speaker 1: fallen to around three hundred dollars per carrot, down from
Speaker 1: thousands just five years earlier. The illusion was gone. The
Speaker 1: following year, the reckoning arrived. Natural diamond prices fell hard.
Speaker 1: One carrot stones dropped by roughly fifty percent from their
Speaker 1: peak three carrot and larger stones fell by as much
Speaker 1: as seventy percent. The stone that had been sold as
Speaker 1: forever was now behaving like what it had always been
Speaker 1: beneath the marketing, a discretionary luxury good, not a store
Speaker 1: of value or airloom guaranteed to endure it was a
Speaker 1: product again Kevin de Merit of lear Capital.
Speaker 3: Gold and silver really possessed this rare combination of traits
Speaker 3: that really no other material has ever matched simultaneously. And
Speaker 3: you know, they're six or seven of them. Durability, you know,
Speaker 3: gold or silver, they don't rot, they don't rush, they
Speaker 3: don't decay. Fungibility, one ounce is identical to the other,
Speaker 3: exactly the visibility. They can be melted and reformed without
Speaker 3: losing value. Portability, enormous value in an incredibly small space,
Speaker 3: especially at today's prices. It's globally recognizable, it's instantly recognizable
Speaker 3: across cultures, different countries, so on and so forth, and
Speaker 3: it's naturally scarce. It can't be created or manufactured. And
Speaker 3: then you have this faith in demand. From the beginning
Speaker 3: of time, there was the gold rush, and people, you know,
Speaker 3: demanded this goal. They would come all the way out
Speaker 3: and risk their lives to the West coast to try
Speaker 3: to dig up some gold. So when you have all
Speaker 3: of that together that no other material has, that's really
Speaker 3: what's unique about the gold and silver market. In my opinion,
Speaker 3: diamonds and pearls failed because they lack fungibility, They lack
Speaker 3: true scarcity. Each one is different, requires a grading expert,
Speaker 3: and is really vulnerable to sudden supply shocks, especially now
Speaker 3: that they can make diamonds and pearls. So if money
Speaker 3: requires an expert to tell you what it's worth, it's
Speaker 3: really not money.
Speaker 1: History had repeated itself. Just as cultured pearls had shattered
Speaker 1: the natural pearl monopoly, lab grown diamonds had done the
Speaker 1: same to natural diamonds, and the parallels were impossible to ignore.
Speaker 1: Pearls never disappeared, they simply fell from the throne. Diamonds
Speaker 1: were now following the same path. In May of twenty
Speaker 1: twenty four, a brief announcement landed with almost no fanfare.
Speaker 1: Anglo American announced that it was exploring options to divest
Speaker 1: its stake into Beers. This was the South African mining
Speaker 1: firm that once dictated the global price of diamonds, the
Speaker 1: company that had engineered the most successful cartel in modern history,
Speaker 1: the corporation that convinced generations of Americans that a diamond
Speaker 1: is forever, and now Anglo American viewed to Beers as
Speaker 1: a troubled asset. By May twenty twenty five, while Anglo
Speaker 1: American was still looking for a buyer. The Beers made
Speaker 1: their own announcement light Box, its lab grown diamond brand,
Speaker 1: was shutting down. The official explanation it wanted to refocus
Speaker 1: on natural diamonds, but the reality was that lab grown
Speaker 1: diamond prices had collapsed so far, so fast, that the
Speaker 1: economics no longer worked. The very strategy to Beers used
Speaker 1: to try and save there forever diamond illusion backfired. Light
Speaker 1: Box hadn't protected the illusion. It exposed the fiction behind
Speaker 1: the story that the Beers had been peddling, which leads
Speaker 1: us back to the question what makes something valuable. Something
Speaker 1: is truly valuable if it helps you protect your freedom
Speaker 1: when everything is falling apart. Across history, things with enduring
Speaker 1: value share the same core traits, things like durability, portability, fungibility,
Speaker 1: global recognizability, utility, and genuine scarcity. For centuries, diamonds were
Speaker 1: valuable because they carried most of these traits. But then
Speaker 1: they lost perhaps the most important trait of them all.
Speaker 1: So diamonds had to be propped up with a good story,
Speaker 1: and for most of the twentieth century, nobody told a
Speaker 1: better story than De Beer's. They didn't just sell a stone,
Speaker 1: they sold a promise. De Beers wrapped diamonds in romance.
Speaker 1: They told you they were rare, eternal, forever, and for
Speaker 1: a while the world nodded along. But diamond rarity was
Speaker 1: manufactured before they were fabricated in a lab. The natural
Speaker 1: pearl should have been a warning. It once was queen
Speaker 1: of the gems. Then technology changed the math, first for pearls,
Speaker 1: then for diamonds. To understand what makes something valuable, Look
Speaker 1: at gold. It can be buried for a thousand years,
Speaker 1: dug up, and turned instantly into money. It was valuable
Speaker 1: before there were banks, ad agencies, engagement rings, and Hollywood
Speaker 1: close ups, before there were even governments. Gold has survived empires, wars, revolutions,
Speaker 1: and technological change because its value didn't depend solely on belief.
Speaker 1: No cartel was needed, no story required. Something that is
Speaker 1: truly valuable works whenever breaks. That's why central banks hold gold,
Speaker 1: why nations stockpilot, and why when paper promises fail, gold remains.
Speaker 1: In the end. The real precious asset wasn't the sparkling
Speaker 1: stone on her finger. It was the ring it was
Speaker 1: mounted on. Diamonds might be a girl's best friend, but
Speaker 1: gold is actually forever red.
Speaker 4: Pilled America is an iHeartRadio original podcast. It's owned and
Speaker 4: produced by Patrick Carrelci and me Adriana Cortez for Informed Ventures. Now,
Speaker 4: you can get ad free access to our entire catalog
Speaker 4: of episodes by becoming a backstage subscriber. To subscribe, just
Speaker 4: visit Redpilled America dot com.
Speaker 2: And click join in the topmenu. Thanks for listening.