Diamonds + Bitcoin = Diamond Coins

Five months ago we viewed the Federal Reserve's unprecedented commitment to support the entire economy as the beginning of a multi-year cycle of inflation.

Now the Fed is buying corporate debt--even some risky pieces that pension funds won't touch--and the debt of state and local governments. It has crossed a line and can't go back. ("Why are you letting [State name] go bankrupt?") Eventually the tidal wave of government debt and paper money will cause an inflation that will dwarf that of the 1970's.

We already see the signs in rising prices of bitcoin and gold (see above graphs)

(Image from tokenpost)

Now there's a move to resurrect diamonds as a store of value: [bold added]

Here’s how the new market would work: Diamond Standard plans to sell 5,000 coins each worth $5,000. The company will then use an automated process to bid on millions of diamonds and adjust its bids until it can buy a sample of about 50,000 to 60,000. That bidding process will include many big diamond vendors, creating the first global diamond exchange.

The geological information about the diamonds purchased by the company will be put in a public database. From there, a computer program will select a comparable distribution of 11 or 12 to go into each coin.

The vendors must comply with know-your-customer and anti-money-laundering requirements in a process supervised by the Gemological Institute of America to ensure no conflict diamonds used to finance wars are involved. Diamond Standard is also regulated by the Bermuda Monetary Authority and audited by Deloitte LLP.

The GIA will then grade each diamond and assemble the coins before delivering them to customers in mid-October. Each coin also carries a computer chip that makes it a digital asset using blockchain—the technology that supports the digital currency bitcoin—letting holders buy and sell on digital exchanges. Those trades will dictate the price of coins after the initial offering. The top of the plastic coins is transparent to display the diamonds.

I admire the entrepreneurs for trying to use 21st-century technology to solve the diamond market's twin problems of questionable provenance and synthetic manufacturing. As a money-like asset instead of jewelry, diamonds like gold will experience much greater demand ($1.2 trillion?!? per the WSJ article).

As for your humble blogger, if I were looking for inflation protection I would invest in real estate. If it all goes south at least I could live in it.

Animal Spirits

Costco has eliminated mailings of its monthly specials.

Rather than log in with the ID and password on the browser each time, I downloaded the iPhone app, which is perpetually connected.

Costco is adapting to the coronavirus world by trying to keep shoppers spaced in its warehouses, providing more home delivery options, and beefing up the online store.

The local outlet may be out of TP, but Costco does have the $60,000 diamond ring and $45,000 earrings.

A few more stimulus checks, and I just might be able to swing it.

Once Was Lost Then Now Is Found

Ala Moana Park

I had often misplaced my first wedding ring (your opinions are not welcome, Dr. Freud). I finally lost it for good when it slipped off my finger swimming at Ala Moana. We searched for hours to no avail. I bought a replacement later that summer.

The second gold band lasted for 14 years until it too was lost, along with a jade ring that my grandmother gave me. The last time I saw either was when we remodeled the kitchen. I was 99% positive that the rings were somewhere in the house. The 1% uncertainty consisted of a nagging suspicion that one of our contractors had helped himself when I wasn't looking. Try as I might, I could never banish that poisonous thought completely.

I was surprised and delighted when we replaced two heavy bedroom dressers this month. Beneath the years of accumulated dust and debris lay two shiny objects. I was grateful that I had found the rings, but more importantly that my suspicions about a fellow human being were completely unfounded. Another sign that this year may turn out to be better than expected.