This raises a very critical issue that Mr. Pelley and his 60 Minutes producers failed to realize. That issue: The Milk Factor!
The Milk Factor
At left is a gallon of milk from my personal refrigerator. As I sat eating my morning cereal I realized that I have no idea about the cow that produced this milk. How is she being treated? Was the utter pump warm or cold when it was attached to her teats? What kind of feed is she being given? And the big question: Would it be possible for me to trace the milk in my cereal bowl back to the specific cow that produced this milk?
In truth, milk is liquid and gets mixed with a lot of other milk from a lot of other cows before it gets to my cereal bowl. I could, given enough time and resources create a traceable path for my milk to travel in order that I could trace my morning milk to a particular cow….in order that I could keep tabs on that cow to make sure how it was treated. But again…..resources. How high would it drive the cost of my milk to create that kind of accountability? Most likely so high that I would stop buying milk, which would put the farmer out of business and send the cow to the slaughterhouse because it would no longer have any purpose other than becoming another part of my breakfast as a steak.
The Gold Factor
Regardless of how humanistic the debate, the gold market is very much like the milk market. At many steps in its journey from source to consumer it is in liquid form, it is mixed with gold from other sources, and after leaving the original source it is untraceable by any known standards other than the establishment of a very expensive closed distribution path. Perhaps most important to the market is that this closed path would make the end product so expensive that only a Tiffany and Company type operation could afford the market. Which leaves us with the questions…..
How much would you expect to pay for milk that had to support a closed, totally accountable market path from one single cow to your table?
How much would you expect to pay for gold (or any other commodity) that required a closed, totally accountable market path from one single source to the end consumer?
And finally, how justified would that cost be if you knew that perhaps only 1% or less of that commodity was coming from questionable sources?
That is the situation with this 60 Minutes report on the gold mines of the People’s Republic of the Congo . The problem is a geo-political issue for politicians and governments, not home town, independent retail jewelers. To say that the home town, independent jewelry store is in any way responsible for the situation in the Congo gold fields is to say that my local convenience store is responsible for the treatment of the cow that produced the milk in my cereal. And to suggest that the home town, independent retail jeweler can control the Congo gold situation is again saying that the local supermarket can control whether or not the milk pump is warm or cold before it's put on the cow's teats!
Both are absurd, as was this 60 Minutes report. After all, as seen at left, Mr. Pelley himself sported a large gold ring in his report. We have to wonder….can Mr. Pelley tell us the source of the gold in his ring?
Clearly, blaming the gold markets for the problem was not the proper story here. Forcing the industry to establish a closed distribution system will do nothing more than put everyone from the miners to the local home town jewelers out of business.
If Mr. Pelley wanted to get to the real nadir of the problem he would have reported on the supply chain of AK-47 ammunition and RPG launchers to the Congolese thugs he just briefly discussed in his story. He failed to present the fact that it is the lack of marketing and distribution control of AK-47 ammo and RPG rounds that is the real problem in the Congo gold fields. That is where a true distribution control is needed….not with home town, independent jewelers regarding gold.
The timing of this story on the first weekend of the Holiday Season is regrettable.
The lack of journalistic acumen by Mr. Pelley is even more regrettable.
60 Minutes…..you are better than this.
Robert James FGA, GG
President, International School of Gemology
©2009 ISG
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Every Sunday I meet with Scott Pelley and the other staff members of the long running CBS news show, 60 Minutes, to review the investigations that the crew has been doing over the past few months. Of course I am one of millions of others who also attend these meetings via our local CBS stations, but for the decades of faithful attendance at these weekly reports I feel as if I am a part of this news team as I am sure other long time viewers do also.