We get some great questions from customers and readers. From time to time we like to share them. Sound money and alternative investing are important subjects for the times we live in and are always worth discussing.
Questions About Diamonds:
QUESTION: I see Money Metals recently added diamonds to the product lineup. Why would someone invest in diamonds in addition to precious metals? Diamonds aren’t money. The market is largely controlled by DeBeers. And jewelers make big margins selling them. Anyone who buys a diamond for investment has traditionally lost some real value as soon as they buy it.
ANSWER: It’s a good question. Diamonds are not money, but they have been used as a means of exchange for centuries and a store of highly concealable and portable wealth in many cultures and economies – in both good times and bad times.
Now VULT makes diamonds fungible and liquid. Within each VULT denomination, the value of each unit is the same, making them standardized and interchangeable. You might think of them as “diamond coins” with different denominations.
The current diamond market is no longer monopolistic. DeBeers, which in the past controlled some 80% of the rough diamond supply, today only has a 30% market share. VULT figures to be a game changer because exchange tradable and liquid diamonds are opening the market to investors of all stripes, not just the tiny handful who are willing to take their chances in the opaque market for loose diamonds.
The bid/ask spread on VULT diamonds is currently 1.5%. Assuming zero gains or losses, investors can buy the diamonds today and sell them tomorrow for 1.5% less than the purchase price. That transaction cost is exceptionally low for a tangible asset -- -- that’s even an even tighter spread than when buying and selling physical gold and silver!
It is also worth noting that VULT guarantees the price of the diamonds during the introductory period. Anyone buying today has 30 days to evaluate and return them for 100% of the purchase price if they choose.
Ultimately we view VULT diamonds as a great way for bullion investors who have built a meaningful holding in metals to diversify. We often have customers asking about what other tangible assets we can recommend.
Diamonds are widely valued, private, and portable -- which remains our focus at Money Metals. However, the market for them is driven by different fundamentals. Particularly now, as high-quality stones have suddenly become investable. Learn more here…
QUESTION: How do I determine if I am eligible for some of the money in the settlement with Deutsche Bank? Physical bullion investors have been hurt by price rigging in London and in the futures market too. Any chance we can get compensation?
ANSWER: Yes, there is a chance, and perhaps even a good one. The details around what qualifications will be needed to join the settlement class are still being hammered out. There are also several other class action suits in the works, each of which could represent investors with different qualifications.
The good news is that bullion investors have a shot at some justice. The evidence Deutsche Bank just turned over, which attorneys have characterized as a “smoking gun”, makes the case much stronger. The $100 million that Deutsche Bank is offering figures to be augmented dramatically by the other banks involved.
We intend to monitor the situation carefully and alert you to any opportunity to file a claim. We’ll also continue to report on newsworthy developments in the litigation. So please keep an eye on our coverage.