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Jewelry, Obsession and How Desire Shapes The World

Ara Raden

Manhatten traded for glass beads, sounds like a raw deal, but in fact both sides happy with it. Glass beads were cheap in place of manufacture (Holland) but valued elsewhere in the world where they didn't know how to make them. Same thing true of spices, tea, diamonds, sapphires etc - little value where they came from; expensive where you couldn't get them. Plus the Indians who 'sold' it only used it for gathering oysters, and had no concept of people settling there permanently.

Broadway never planned, unlike rest of NY's street grid. It was originally a footpath that ran both sides of a wide shallow brook where natives collected oysters. Oyster shells used to make 'wampum' beads, which were traded as far west as te Great Plains. Beads were the natives' currency.

Diamonds have only been a 'necessity' for about 3 generations. De Beers, faced with a glut of diamonds, convinced the world that a woman should have an engagement ring with diamonds.

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A dirty secret of the jewelry trade - it's really difficult to sell your own ring. Stores won't buy it back from you because then they would have to tell you that it's worth just a fraction of the price they charged you. Nearly every diamond ever mined is owned by someone, squirrelled away in jewelry boxes. If everybody decided to sell their diamonds, the market would be flooded and prices would really collapse.

Jewelers can't tell the difference between a real diamond and a cubic zirconia without an electronic testing pen. Usually the cheap setting that gives it away, but otherwise even expert can't tell just visually.

A greedy Dominican friar named Reginaldo Pedraza accompanied conquistadors when first found emeralds in Peru. He ingeniously convinced the not-well-educators that real emeralds didn't break when struck. When they angrily discarded their purloined shattered gemstones, the friar gathered up the still massive chunks of emeralds and sewed them into his robes. He immediately bailed out from the expedition and headed for home. But he only got as far as Panama where he died of a fever.

The Spanish believed that God had favoured them with the riches which flowed from the South American mines - he meant them to have it, so it didn't matter how badly they treated the natives to get it. And, he meant it to be spent bringing the rest of Europe back under Catholic (Spanish) control. So Charles V and his son Philip II wasted the whole lot on decades of holy wars against Protestants and Muslims, often simultaneously.

But this period was also the birth of modern banking. Bankers were prepared to lend to the the Spanish in exchange for notes secured against coming shipments of emeralds. The juro was the world's first interest-bearing government bond.

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So many emeralds arrived in Europe that the price inevitably collapsed. That destroyed the Spanish economy. They had gained no benefit from the cornucopia. Their average standard of living stayed below rest of Europe, both during and after the peak of the empire. Their brief spell at the top left them surrounded by enemies.

Elizabeth I couldn't afford a navy to challenge Spain, so she sanctioned privateers - pirates who pay taxes. She took a cut of one-third of all plunder. The privateers were often 'second' sons of gentry who had little to lose, but the ranks attracted the daring and the risk-takers.

Carl Faberge the son of a French family moved to Russia. Elevated jewelry making to an art form. Not just the famous eggs but also a huge range of objets d'art simple to complex - down to cigarette cases and picture frames. As well as being a creative genius he was also a great businessman who treated workers very well. Sharing credit and dispersing profits, as well as looking after health and well-being of his employees, was a completely revolutionary practice.

He also revolutionised the industry. Whereas the best French jewelers could only produce 4 simple colors of gold, Faberge's workshops expanded that to include reds, purples and even blue gold. The same thing happened with enameling - whereas his contemporaries had only a few simple colors, Faberge offered more than 150 different shades from shocking pinks up to vivid, almost neon violets.

Positional goods. Study where 2 women each given a diamond and asked how happy (1 to 10) they would be to own it. Then they were allowed to see what their neighbour had. The woman with the bigger diamond suddenly became much happier with hers, while the one with the smaller diamond much less satisfied.

Japanese invented cultured pearls but sellers of natural pearls tried to throw up roadblocks. Mikimoto, the innovator who pioneered the successful technique (had to transplant a tiny bit of another oyster's reproductive tissue along with the pearl seed) came up with a killer ap. He amassed a strand of 49 perfect pearls. Took him 10 years to find the pearls, even with millions to choose from each year. The pearls were up to 14mm when rarely find a single natural pearl bigger than 8mm.

He carried these perfect pearls with him everywhere, showed them to everyone, but refused to sell them, despite huge offers. They are now on display at the Mikimoto Museum and are one of Japan's national treasures, deemed too valuable to ever leave the country.

Today, the finest and most expensive pearls are all cultured - just about all the natural pearls on the market are antiques.The dealers feared that cultured pearls would depress prices by flooding the market, but what actually happened was that the value of natural pearls collapsed because the cultured ones were superior.

Patek Philippe has kept records of every single watch it has ever made since 1868 - 180 years.

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