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Message: <blockquote data-quote="Dannyalcatraz" data-source="post: 2859555" data-attributes="member: 19675">About American oil- we are third in production, but our reserves are about 1/10th of Saudi Arabia's, and less than most countries in the Arab world (except Israel) and other OPEC nations.  In other words, we may produce a lot, but we don't have as much to produce- we're going through what we have at a higher rate than similar producers.Much of our current production is from wells that are declining in output.  We know we can get more from those wells, but its going to require secondary and tertiary recovery methods to get to.Add to that the fact that most of what American wells produce needs significantly more refinement than most of the other major producers and you introduce another factor that effectively reduces the utility, and thus value of our production.<a href="http://www.gravmag.com/oil.html#producers" target="_blank">http://www.gravmag.com/oil.html#producers</a>Yep- and that could work for almost any mineral wealth out there- real or fantastic.  Harry Turtledove's "Darkness" series features dragons (used like WW2 fighters) that must be fed cinnabar and some other mineral (coal?) to enable them to produce flame.  Thus, cinnabar and coal mines were important strategic resources for the flights of (barely) trained dragons and their riders.As for some more background on diamonds:About a decade ago, the Russians were trying to get low interest loans to buy food, but South Africa was most visible among several nations that opposed helping them out.  In an incredibly subtle and crafty move, the Russian government invited Mike Wallace (as I recall) of 60 Minutes to do a special expose on Russian diamond wealth.  The vault's commanding officer (it was under a military base) gave him a tour of one of their vaults.  It looked like a large, well stocked library, with large cases with many shelves.  But instead of books, on every shelf was a bunch of shoebox-shaped & sized boxes.  He pulled one down to show Mike- it was filled with investment-grade 1 carat flawless brilliant diamonds...just like every other box on that case.  Each case was a different grade, size, cut, etc. of diamond.  As he explained, Russia had hundreds of such vaults.There was then a conversation that went something like this:"If we cannot get the loans we need to buy food" the officer said, "we will be forced to liquidate our diamond reserves.""Won't that adversly affect the price of diamonds?  Won't that drive their value down?""Da- there will be diminishing returns- the more we sell, the less we will get per carat- but we must feed our people..."Within a month, South African resistance to loans for the Russians had evaporated, and the Russians were buying food.At any rate, just because something is "rare" doesn't mean its worth your investment.  To give you another perspective, if you had bought a 1 carat "investment-grade" diamond for $1000 in (I think) 1970, it would be worth about $17K today.  Not bad, but not great.  By way of contrast, that same $1K invested in Blue Chalcedony (a fairly common stone) back then would be worth more than $1M today...</blockquote>

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