“We have to tell people that diamonds are valuable,” he said. “We are trying to maintain the price, just as De Beers did, as all diamond producing countries do. But what we are doing is selling an illusion,” meaning a product with no utility and a price that depends on the continued sense of scarcity where there is none.
It's interesting that Russia has become the largest producer of diamonds. Historically DeBeers controlled enough of the market to monopolize it. So it's probably too early to tell if it's simply the recession or if it could be more of a larger consumer shift away from an artificially expensive item.