Global Economic Crisis and Gemstones

Recently, WHO announced COVID-19 outbreak a pandemic. It has become a global health crisis, affecting the whole world’s economy. Over the course of my gemstone business, I have heard many stories of how people overcame global economic crisis by gemstone investment by buying and selling gemstones and jewellery after the crisis is over.

Here are some stories that would help you to understand about the relationship between a global economic crisis and gemstones:

Case 1:

Just before the World War 2, a Jewish man received breaking news that an impending war was coming. So he sold all of his fortune (worth US$200,000 at that period, what a gemstone investment!) and bought a valuable Emerald pendant. Fortunately. he survived the war and the first thing he did was to sell the Emerald pendant. He immediately went to find a credible jeweler and sold it for US$300,000 which was more than what he had paid for. With that huge sum of money, he was able to restart his life all over again.

Case 2:

During the 1997 Asian financial crisis, an elderly Indonesian lady came to my father’s (Mr. Tay Thye Sun) gemological laboratory (Far East Gem Lab) to evaluate her 0.70ct diamond. She waited and watched how Mr. Tay evaluated the stone. Deemed satisfied with my father’s professionalism, she brought out her small little pouch containing more diamonds ranging from 2 carats to 5 carats and requested Mr. Tay to value them all. After the service was done, she said “if you know anyone who wants to buy them, please let me know”. She was a wise woman who had set aside some money by investing them into diamonds creating her own emergency fund!

Case 3:

This story was also before World War 2 which involved a man who owned a pawnshop. War was coming, so he came out with an ingenious plan. He took all the goods from his pawnshop, found a piece of land, and buried all them which consisted of gold, jewellery, and gemstones (Maybe he got the idea from the crown jewels? They hid the jewels 60 feet below Windsor Castle!) After the war had ended, he claimed to the goods owners that all of it was taken away during the war, leaving the owners dumbfounded. Nobody knows what he did after.

Case 4:

Looking at the Jewish people, they are proficient in two industries: The diamond industry and the technology industry. They have been through a long history of getting unsettled, so they always need to ‘pack and go’ quickly. Fortunately, diamonds are highly portable, and as for technology they just store it in their brain (they have good memory) or maybe an USB stick.

Case 5:

I heard this story from one of my friends who is working in a pawnshop (visit https://www.singpawn.org to access the Singapore Pawnbroker Association): They had a client who uses the pawnshop regularly. She would bring really expensive jewellery to the pawnshop every now and then to pawn off her items. The client mentioned that the money obtained from the pawn is to pay off worker salaries. Once she received payments from her customer, she would then return and redeem the pawned goods.

During this challenging time, we are able to see many governments are pumping so much money into the economy to help people tide through. There are many uncertainties but also many opportunities. There would be people attempting to sell their gems and jewellery for cash. However most with cash in hand are not sure what to do as the financial markets now are volatile and fragile.

Gems & jewellery are, I would say, great instruments to store value. I will also acknowledge that when you sell at the wrong timing with the wrong sales pitch, you would lose a lot of money. But can you imagine a world where we go back to barter trading when people do not believe in cash anymore?

If you are interested in finding out more about gemstone investment during this period, please email me (Tay Kunming) at info@fegj.com.sg. I would be happy to share my insights with you.

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2020 Copyright – Global Economic Crisis and Gemstones, Tay Kunming, 3th April 2020.


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