De Beers, surprisingly, has announced that they will start slashing their stockpile of diamonds from $3.9 billion to about $2.5 billion. They’ve been hoarding the gems since the Great Depression, carefully cultivating the aura of scarcity. It is a significant change, but I am not knowledgeable enough to judge the impact it will have on the actual industry as a whole. I doubt anyone is about to let diamond prices drop by releasing a big supply into the marketplace and I am skeptical that De Beers will be happily opening themselves to additional competition. They are also planning to increase their advertising and marketing efforts to boost sales, which makes me wonder what tactics we’ll see next. Perhaps they will go beyond special events (weddings, anniversaries) and try everyday, everyman/everywoman tactics. (info culled from AP report in NY Times)