Did the bottom just drop out of the market?

Diamonds are rarely a 1 to 1 exchange of wealth.

A majority of the time there is a discount in the selling of these especially if you have a large number to dispose of.

So while some "wealth" can be retained, a portion of the principal is lost in the transfer.

 

you are thinking in terms of retail transactions, where retail markups are large

precious stones are traded much like precious metals... their prices are indexed like we see gold . silver indexed on the financial pages... a popular market resource for diamonds is called Rappaport

 

currency value is very fragile... there is a large difference between internal account and external account values... a currency may look to be stable to the naïeve who do not look beyond internal account values, while external account values can be subject to large fluctuations from external sources