Interview from Marketplace

By David Weinberg

Today a couple of the nation’s largest jewelry retailers are arguing in a federal courtroom in Ohio. At issue is a multi-million dollar ad campaign by the diamond retailer Zales. The ad claims that Zales’ Celebration Fire diamond is the most brilliant diamond in the world. Sterling Jewelers, the company that owns Zales’ competitors Kay and Jared, says Zales’ has to take back its superlative.

Zales’ claims the lawsuit is without merit. “Our advertising was based upon testing by qualified independent laboratory and our ads make that clear” said Roxanne Barry, the director of investor relations for the Zale Corporation.

Fred Cuellar, author of the number-one selling book on diamonds, “How to Buy a Diamond,” says it’s very easy to tell if Zales’ claim is true.

“It’s simple, there’s a formula you follow,” Cuellar says. “Efficiency rating times amplified light return equals weighted light return. Remember, a photon of light is a boson. Bosons are not Fermions. Am I losing you?”

Cueller broke it down in simpler terms. He said if Sterling, the company that is suing Zales, argues that the brilliance of a diamond is subjective, “They’re wrong and they’re toast.”

But Cueller says if Sterling argues that Zales didn’t do the proper test to determine the brilliance of the diamond, then they have a case. “I studied everything they did with the Celebration diamond and they didn’t follow the protocol and so they actually can’t make the claim based on the way they did the tests on their 50-something stones.”

If Zales loses the case, it will have to pull its ad campaign in the midst of the holiday season.

Here is the link to the original article:
http://www.marketplace.org/topics/business/jewelry-chains-fight-over-clearest-brightest-diamonds

June 6, 2012 Press Release for Diamond Cutters International

For Immediate Release

Diamond Cutters International honors both quantum physics creator and Rubik’s Cube inventor with Rubik’s Masterpiece to celebrate the 40th anniversary of the Rubik’s Cube, the world’s best-selling puzzle, as part of a major international exhibition.

Houston, Texas — As a young physics student in 1874, Max Karl Ernst Ludwig Planck, wanted to understand how matter moved through time and space. In a speech presented in Florence, Italy in 1944, titled Das Wesen der Materie [The Nature of Matter], the German-born physicist said, “The mind is the matrix of all matter.” Little did Planck know he was doing more than explaining the beginnings of quantum theory; he was setting the stage for what would become one of the most widely enjoyed and studied toy puzzles in history. One hundred years after Planck began his pursuit of understanding quantum mechanics, a young Hungarian inventor, architect and professor of architecture, Erno Rubik invented the Rubik’s Cube, a perfect model of Planck’s simple statement. Fifteen years further removed, another craftsman, this time in diamonds, precious stones and metals, Fred Cuellar, founder and CEO of Diamond Cutters International (DCI), created what was to become known as the Rubik’s Masterpiece, or as the Guinness Book of World Records refer to as, “World’s Most Expensive Toy.”

From a simple quote, to an inventor’s goal to be able to physically place a working model of that concept in a person’s hands, to one artist’s desire to create a version as beautiful as the complexity of the universe, the Rubik’s Cube and its $2.5 million counterpart the Rubik’s Masterpiece, have entertained, enthralled and enraptured people around the world. Today, in cooperation with the Liberty Science Center (LSC) in Jersey City and Google, a major exhibit celebrating the Rubik’s Cube is being developed to open April 2014 at the LSC before traveling around the world to various art museums, science centers, and alternative exhibit spaces for up to seven years.

“Erno Rubik was able to make the complex adapted system, which Plank was describing, into a toy, essentially placing the universe in our hands,” says Cuellar of Rubik’s invention. “When I first saw his plastic toy I thought to myself, this is far too incredible a puzzle; it needs to be made of the finest most precious material. I had to honor Rubik and ultimately Planck, using my own skills and talents, so I created the Rubik’s Masterpiece.”

So impressed was Rubik when he first held his namesake masterpiece in his hands that he said of Cuellar’s version of his puzzle, “This is my Mona Lisa.”

Cuellar’s Rubik’s Masterpiece will be the centerpiece of the 40th anniversary exhibit. Valued at over $2.5 million, the fully functioning Rubik’s Cube required 8,500 man hours to be crafted in 18 karat yellow gold with 25 precious stones per panel set in invisible settings. Cuellar used 185 carats of rubies, emeralds, sapphires, and white diamonds to create the classic colored panels of the Rubik’s Cube puzzle with one small difference. While the original Rubik’s Cube is colored red, green, blue, orange, yellow, and white, Cuellar—himself a lover of puzzles and codes—decided to replace orange with purple for a variety of reasons both clever and protective.

The color purple has historically represented royalty due to the fact that in ancient times it was the most difficult, and thus most precious color to create. Only kings and monarchs were allowed to wear purple and to this day it still represents this regal and noble class.

Secondarily, Cuellar wanted to honor both Planck and Rubik, and the color purple allowed him to do this through a clever use of an acronym. The ‘pu’ stand for Planck’s universe, while the ‘rp’ represent Rubik’s puzzle, and finally ‘le’ stand for light energy, which is ultimately what Planck and Rubik each had a desire to understand.

No photograph has ever been taken of the purple side of the Rubik’s Masterpiece, and until now, this design change has not been publicized, to eliminate the risk of others creating replica versions of Cuellar’s incredible work. But with its inclusion in the upcoming exhibit, Cuellar decided it was time to reveal the truth.

“We are excited to be a part of this incredible exhibit,” says Cuellar, “and to be able to share our creation with not only the guests of the Liberty Science Center but ultimately the world.”

The interactive Rubik’s Cube Exhibition will explore the interplay of design, engineering, mathematics, and creativity. In addition to DCI’s spectacular creation, the exhibition will include elaborate Cube artwork; Cube-solving robots; virtual reality simulations of Cubes that aren’t really there; a glowing 35-foot-tall Rubik’s Cube that can be manipulated by anyone with an Internet connection; and a tiny nanoscale Cube.

“Rubik’s Cube has stood the test of time,” says LSC CEO Paul Hoffman, “and yet remains on the leading edge of innovation. Not a week goes by without somebody—an architect in Turkey, a musician in China, a mathematician in Moscow, or a roboticist in Japan—using the Cube in an ingenious new way.”

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About Fred Cuellar, the Diamond Guy®
Having once been unable to afford to purchase a diamond ring for his bride-to-be, Fred Cuellar set out to learn all he could about the diamond business and in so doing has become one of the world’s leading experts. He is the founder of Diamond Cutters International (DCI) where Fred’s industry pioneering work in diamond corresponding grading and diamond bonding have not only revolutionized the diamond industry but has made DCI one of the world’s top diamond cutting, design, importing and sales organizations with a client list that reads like a who’s who of world political leaders, celebrities and championship sports organizations, including President Barack Obama and First Lady Michelle, President George W. Bush and First Lady Laura, the Saudi Royal Family, Erno Rubik, Oprah Winfrey, the Dallas Cowboys, the Denver Broncos, the Detroit Red Wings, the New York Yankees, the LA Galaxy where David Beckham received his first championship ring and more.

To assist others that suffer from the same plight that he once did, Fred launched the MyGemologist™ program and the philanthropic Adopt-A-Diamond™ program, as well as authored “How to Buy a Diamond,” now in its seventh edition and the number one selling book on diamonds in the country. Fred was also instrumental in developing a number of purchasing techniques, including “buying shy,” that have help save thousands of dollars for buyers and increased sales for the diamond industry worldwide. Fred’s tireless work has benefited not only the diamond industry but diamond buyers.

About Liberty Science Center
Liberty Science Center is a 300,000-square-foot learning center located in Liberty State Park on the Jersey City bank of the Hudson near the Statue of Liberty. Liberty Science Center (LSC.org) is dedicated to bringing the excitement of science to people of all ages, Liberty Science Center houses seven museum exhibition halls, a 3D theater, the nation’s largest IMAX® Dome Theater, live simulcast surgeries, tornado and hurricane-force wind simulators, K-12 classrooms and labs, and teacher-development programs. 600,000 students, teachers, and parents visit the science center each year, and tens of thousands more benefit from the center’s off-site and online programs.

Contact: Dee Doan
Diamond Cutters International
Phone 713.222.2728
Fax 713.622.3805
4265 San Felipe, Ste. 960
Houston, TX 77027

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Your Personal Diamond Expert

Everyday with the aid of my gemologists and personal assistants, “Ask The Diamond Guy®” handles countless e-mails and help-line calls! The response to this support site for the best-selling book on diamonds, How to Buy a Diamond, has made it one of the top diamond information sites! Now, we’ve taken it one step further with our “My Gemologist®” Department. This service is free of charge and is my way of thanking all my readers who have made us the most acknowledged jeweler in the Guinness Book of World Records. Here is what it is and does:

My Gemologist® is first and foremost your personal assistant to help you find the right diamond with great guarantees from the best jeweler at a phenomenal price. Some of the most frequently asked questions we receive daily are: – Where is a bonded jeweler in my area? – I can’t find a particular diamond. – I can’t talk the jeweler’s language so I’m afraid I’m not getting a good deal. What do I do? – How do I negotiate when I’ve found a good jeweler, etc? My Gemologist® will be your middleman, personal shopper, consigliere, godfather, negotiator, facilitator. Call him what you will but if you’re having trouble with your purchase in any way you can lay it all in the lap of My Gemologist®. To be assigned your own personal gemologist to do your bidding, just click here to fill out the following information with your specific needs, and a Diamond Cutters International representative will be assigned to be your own gemologist and cater to your every need within 48 hours. If you require immediate assistance, you can also call our My Gemologist® 24/7 department at 800-275-4047 anytime 24 hours a day 7 days a week.

Take care, The Diamond Guy®

Pink Diamond Sets New Record

pink-diamond

Diamond hidden from the public over 60 years finally resurfaces and sold for a record $46,158,674—most expensive diamond sold at auction. One cannot help but wonder that if “The Graff Pink”—named by Laurence Graff immediately after purchase—at 24.78ct fancy intense pink is $47 million, how much would “The Steinmetz Pink” at 59.60ct fancy vivid pink go for at auction?

Dangerous Metals: The Truth About Tungsten and Cobalt Wedding Bands

Fred Cuellar, The Diamond Guy®, and Dr. Mark Mehaffey discuss the truth about removing wedding bands–including gold, platinum, silver, titanium, stainless steel, cobalt, and tungsten. The equipment to remove or cut tungsten and cobalt wedding rings are not as readily available as some have lead you to believe. Fred shows you how to remove these tungsten and conbalt rings.

Harry Winston Engagement Rings vs. Tiffany & Co. Engagment Rings

I’m constantly asked to compare engagement rings from Harry Winston and Tiffany & Co. “Fred, is the Tiffany Embrace® better than the micro pave Harry Winston? Is the classic Winston better than a classic Tiffany? Or is the double claw prong solitaire of the Winston better than a Butter Cup Tiffany solitaire?” The answer? Depends.

Environment regulates behavior—so what’s your lifestyle? If you are a rock climber or a neurosurgeon, you need a ring that can handle that environment, if that is your choice. Not all wedding ring styles are as resilient as others. A six prong head is more secure than a four prong head; and the more diamonds in the ring the more possibility that one of them may fall out. So what is a person to do?

The task of any setting is to balance beauty and durability. If we want to be 100% sure your diamond won’t fall out, we can bury it in a block of platinum with a wall of metal surrounding the entire perimeter of the diamond. The diamond will be safe but the sparkle will be compromised because of the fortress that you’ve built around it. But today’s popular ring styles leaves the diamond almost “naked.” The shanks (the part that slides on your finger) are very thin and delicate. The head (the part that holds the center diamond) is mounted fairly high and tends to be decorated with a crown (halo) of small diamonds. Less metal and many small diamonds are what is selling these days to decorate the diamond you have chosen. Are they beautiful? Absolutely! Are they easily damaged? You bet! We are back again to the balance between beauty and safety—which is a lot like life. You can buy a castle and hide away in it and be “technically” safe but you will miss some beautiful experiences that always come with their share of risks. So what are my recommendations when it comes to these beautiful settings? Simple, pick what you love, pick what calls out to you. You know that life and rings don’t come with any lifetime guarantee to never fall apart or get hurt. But, if you are in a rock solid relationship with your jeweler they will give you lifetime repair guarantees that will cover any damage you might inflict on your beautiful new ring, at no cost to you, as long as you keep up with annual checkups. So don’t worry, while your wedding ring is a “symbol” of your love for each other and can be damaged, smashed, trashed or even lost, your love for each other is invicible! Have a great day! Hug a diamond. Talk to you next time.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

The ‘Blood Diamond’ Resurfaces

By MICHAEL ALLEN from Wall Street Journal

CAFUNFO, Angola—On paper, Angola is a poster child for the global effort to keep “blood diamonds” out of the world’s jewelry stores.

International pressure helped end a vicious civil war a decade ago by strangling the ability of rebels to trade diamonds for weapons. Angola is now a leading member of the so-called Kimberley Process, an industry-wide effort to prevent commerce in rough diamonds by insurgent groups. Today, Angola is the world’s fifth-largest diamond producer by value, and its gems are coveted for their size and purity.

But a visit to Angola’s diamond heartland reveals that plenty of blood still spills over those precious stones. Here in the sprawling jungle of northeast Angola, a violent economy prevails in which thousands of peasant miners eke out a living searching for diamonds with shovels and sieves. Because they lack government permits, miners and their families say they are routinely beaten and shaken down for bribes by soldiers and private security guards—and, in extreme cases, killed.

The Kimberly Process has never been more than a country of origin repackaging and rubber stamp. –Fred Cuellar

This sort of violence, which has made headlines in nearby Zimbabwe, is threatening to tear the Kimberley Process apart. Diamond retailers can ill afford more bad publicity about tainted stones. But many of Africa’s diamond-producing nations are wary about any effort to beef up the industry’s policing of human rights.

Around Angola’s mines, tales of confrontation abound. In an interview with The Wall Street Journal, Linda Moisés da Rosa, 55 years old, denounced the killings of her two sons, both diamond miners. In September, she said, Angolan soldiers descended on a large mine near here to chase away diggers. When some refused to leave, she said, the soldiers caved in the mine, burying alive around 45 men, including her son Pereira Eduardo Antonio, 21. “These kids were stubborn,” she said, adding that the soldiers said that the killings “should serve as a lesson to anyone who wants to come dig here again.”

In February, she said, her oldest son, 33-year-old Tito Eduardo, the family’s sole breadwinner, got into a dispute with private security guards at another mining site. She said the guards had agreed to let local diggers sift gravel for diamonds in exchange for around $30 a day. They accused her son of failing to pay the bribe, and when he argued back, she said, “they killed him with a machete.”

Military officials didn’t respond to requests for comment. Angola’s secretary of state for human rights, António Bento Bembe, blames his nation’s long civil war for creating a climate of abuse. “I know lots of these cases happen, and I know of many other cases you haven’t heard of yet,” he said in an interview in Luanda, Angola’s capital. “It is urgent to cultivate a culture of human rights.”

The issue has plunged the Kimberley Process into the worst crisis in its brief history. Born at a time of great bloodshed on the African continent, the 75-nation Kimberley Process was initially lauded for its commitment to human rights. Rebel movements had seized control of diamond regions in Angola, Sierra Leone and the Democratic Republic of Congo and used the gems to finance marauding guerrilla armies. Facing a public-relations nightmare, world diamond companies agreed to buy rough stones only if they are certified by internationally recognized governments. The Kimberley Process says well over 99% of the world’s rough-diamond trade is now “conflict-free.”

The Kimberly Process was destined to fail because you can’t have an industry regulate itself. It’s back to the fox guarding the hen house. Self-regulation doesn’t work when there are piles of money on the table. –Fred Cuellar

But critics say there’s a big loophole in that definition: It doesn’t take into account human-rights abuses in diamond territory controlled by governments themselves. “The Kimberley Process cut the financial lifeline of rebels, but at the same time it gave legitimacy to corrupt governments that abuse their own people,” says Rafael Marques, a human-rights activist who has worked extensively in northeastern Angola.

Much of the recent controversy is focused on Zimbabwe, where the group Human Rights Watch last year reported that government soldiers massacred over 200 people in a fight to control diamond fields in the east of the country, raped local women and press-ganged peasants into mining work. The Kimberley Process temporarily suspended exports from the area on the grounds that the turmoil was allowing undocumented stones to be smuggled into the world market. Last month, a monitor installed by the Kimberley Process recommended that the ban be lifted, kicking off a fierce debate. A Kimberley Process committee has been deliberating the recommendation and the issue will be taken up in a meeting of the entire group in Tel Aviv starting Monday.

Global Witness, a human-rights organization that helped conceive the Kimberley Process, called for Zimbabwe to be suspended from the group. “Thanks to the impunity and violence in Zimbabwe, blood diamonds are back on the international market,” said Elly Harrowell, a Global Witness activist.

Jewelers are starting to worry that the bad publicity could spook consumers. Matthew Runci, chief executive of Jewelers of America, a trade group which represents jewelry chains from Tiffany & Co. to Zale Corp., says the Kimberley Process should either figure out a way to incorporate human-rights monitoring into its oversight of member countries or invite an outside organization to do it for them. “It’s essential that the public’s confidence in diamonds be maintained at a high level,” he says. Once a diamond has been cut and polished, it’s virtually impossible for the consumer to tell its country of origin.

Tiffany’s can’t take the human rights stage and at the same time run sweatshops out of Botswana. –Fred Cuellar

Cecilia Gardner, a former New York federal prosecutor who serves as the general counsel of the World Diamond Council, says the Kimberley Process is a voluntary organization and isn’t equipped to enforce human-rights compliance. “We don’t have an army, we don’t have a police force,” she says.

In Angola, which far overshadows Zimbabwe in importance to the jewelry market, the Kimberley Process appears to have little appetite for human-rights issues. Last August, when a Kimberley Process peer-review team arrived to check the country’s compliance procedures, Angolan forces were just mopping up a major operation to expel some 30,000 illegal Congolese miners from Angolan territory near here. According to a U.S. State Department report citing local media and nongovernmental organizations, military and police “arbitrarily beat and raped detainees” and forced them to march to the border without food or water. The government has denied committing abuses and says the army was merely securing the nation’s borders.

A confidential Kimberley Process report on the review visit makes no mention of alleged human-rights abuses, although it criticizes Angola for failing to present a plan to better document the output of peasant mining. The group spent just two days in Lunda Norte, an area near the Congo border that has become a flashpoint for clashes between diggers and security forces. According to a draft of the internal report, the delegation intended to visit the site of a large illegal mining operation but was thwarted by “a last-minute decision to participate in a graduation ceremony for new border patrol security officers.” As the team was preparing to depart, the chairman of the Kimberley Process at the time, Namibian politician Bernhard Esau, pronounced the visit a success and brushed off questions about alleged abuses of peasant miners. “The Kimberley Process is not a human-rights organization,” he told reporters.

The roots of Angola’s current blood-diamond problems have much to do with geology. Unlike in Botswana and South Africa, where multinational corporations use heavy machinery to extract diamonds out of deep shafts, much of Angola’s diamond reserves are alluvial, meaning the stones have been washed out of the earth and scattered across the countryside. They’re available to anyone with a shovel and wood-framed sieve, and are difficult for mining companies to secure. More than a million people world-wide earn a living from artisanal mining in alluvial fields, including tens of thousands in Angola alone.

Angola’s artisanal miners, known in Portuguese as garimpeiros, played a pivotal role in the country’s civil war, which lasted for 27 years and left at least a half-million people dead. U.S.-backed troops of the Union for the Total Independence of Angola, or UNITA, fighting to depose a Soviet-supported socialist government, controlled much of the country’s diamond territory. To fund their war effort, they enlisted peasant diggers from here as well as neighboring Zaire, now known as the Democratic Republic of the Congo.

While UNITA forces committed plenty of atrocities, some people here in Cafunfo say they generally treated garimpeiros fairly. They allowed diggers to keep a percentage of the diamonds they found and established an immigration policy to bring in Congolese workers on 30-day permits, says Enoque Jeremias, a local human-rights investigator. “It was a fair system,” he adds.

The war’s end led to a surge in diamond production, as large mining companies dusted off old claims and launched new operations. Among the players are Odebrecht SA of Brazil, Russia’s state-owned Alrosa; and a company controlled by Israeli diamond magnate Lev Leviev, all of which operate in joint ventures with the government diamond company Endiama.

But the garimpeiros were hardly prepared to put away their shovels. There’s little agriculture here and almost no jobs outside of the mining sector. Plus, vast parts of the countryside haven’t even been explored yet, much less mined. The peasants proved adept at finding diamond deposits that the big companies missed, and this so-called informal production continued to account for more than one-quarter of the country’s diamond exports, according to the Partnership Africa Canada, an Ottawa-based nongovernmental agency that deals with mining issues.

To soak up those diamonds, Angola authorized foreign-run buying operations to be established in the bush. U.S. diamond giant Lazare Kaplan International Inc. became a fixture in the area, signing a technical agreement with the government to set up buying houses. Lazare Kaplan says it let the agreement expire in 2008, when world diamond prices collapsed, and is now winding down operations in Angola. Lazare Kaplan Chairman Maurice Tempelsman, the late-life companion of Jacqueline Kennedy Onassis, says the company was trying to bring development to the area and help strengthen Angola’s Kimberley Process controls. “I am strongly committed to the protection of human rights,” Mr. Tempelsman says, adding: “I believe in this imperfect world, involvement in trying to bring about constructive change is the best course.”

Lazare Kaplan’s withdrawal has left a wide-open field for other buyers, including a company controlled by Israel’s Mr. Leviev, as well as a flood of newcomers from West Africa and the Middle East. Their storefronts line the muddy streets of Cafunfo, trying to outdo each other with mirror-signed bling.

For Ahmad Mouein, a Lebanese buyer who bills himself as “Boss Mouein,” it’s a great business opportunity despite the recession in the diamond market. “Sometimes a digger here can sell you a $500,000 stone for $5,000, $10,000,” he marvels. He says the Kimberley Process hasn’t succeeded in its primary mission of halting smuggling. “Kimberley or not Kimberley, my friend, for the diamond, you can do what you want.”

By many accounts, the presence of these buying houses has only fanned the violence by encouraging more peasants to get into the mining business at the same time that government security forces have been tasked with stopping them.

At one such illegal mine, an hour’s motorcycle ride over trails outside of Cafunfo, a Dantesque scene unfolds. Perhaps 500 young men are clambering over a vast pit dug deep into the red earth. They’ve been at it for a year now, and figure they have months to go until they hit a vein of gravel they believe will contain diamonds. Their tools are rudimentary—pikes and shovels—and the work is backbreaking, alleviated only by the homegrown marijuana many smoke and the small sachets of alcohol that can be had everywhere for a dollar.

They live on the site in homemade tents and work in shifts. To support themselves, they say, they make agreements with buyers, especially the West Africans, to split the take.

Caxaculo Milonga, 44, says he’s on the hook with a man he knows as Boss Ibrahim from Senegal. Although Boss Ibrahim paid medical expenses when a run-in with police and soldiers sent him to the hospital, Mr. Milonga complains that the deal is unfair because he has to give Boss Ibrahim 50% of all production, then sell the rest to him at a rock-bottom price. “We work like slaves and they’re cheating us,” he says. “You can’t argue or he’ll call the police.” Another garimpeiro says his sponsor at one time was a police investigator in Cafunfo, making any negotiation pointless.

Concerns about security forces are never far away. Last year, as part of the latest effort to expel Congolese diggers, the Angolan army moved into the area in force. In recent months patrols have paid a visit to the mine, harassing miners and slapping them with the flat side of their machetes, the miners say. The diggers worry that the army is just waiting until they hit gravel so they can move in and take the diamonds for themselves.

Near another illegal mining site, peasants described a similar scenario. In December, an army patrol swept through the village of Bundo in search of mining tools, says Cazanguia Andre, the 60-year-old deputy chief of the village. He says he ran into them on the way back from tilling his field, and they accused him of being a garimpeiro. They then hit him twice in the head with a rifle butt and struck him with a pole, he adds, breaking his arm. Later, after they discovered shovels at the local church, which Mr. Andre says were being used for construction, they arrested three people.

A lieutenant at a nearby temporary army encampment declined to be interviewed but said his squad hasn’t committed any abuses of the local population and isn’t involved in any mining activities.

Back in Bundo, four garimpeiros give a different story. They say when soldiers swept through they discovered the garimpeiros working with a water pump in a pit. The soldiers confiscated the pump. Then a negotiation ensued, says one garimpeiro, and the soldiers agreed to give back the pump in exchange for $54—as well as a split of the action. “When we hit the gravel, the soldiers will be present to get their share,” he says.

Blood diamonds were bred out of civil wars. The wars maybe over but the corruption has just gone higher up the ladder. Puppet masters of blood diamonds are the governments themselves. If the U.S. continues to barter and trade with corrupt regimes, then the U.S. buying public has no one to blame for the blood that is on our hands. –Fred Cuellar

Click here for original article.

Recommended Article: Blood Diamonds

More questions? Ask the Diamond Guy®

The Miser versus the Entreprenuer

Why is Ayn Rand so popular today?
By Jay Richards

“Do not store up for yourselves treasures on earth, where moth and rust consume and where thieves break in and steal,” Jesus commanded his disciples, “but store up for yourselves treasures in heaven . . . For where your treasure is, there your heart will be also.” Some take this biblical passage and others like it as a direct assault on capitalist aspirations. But that’s a misreading of the text, and of capitalism.

Look carefully at the command. Whom does Jesus have in mind here? Clearly, he’s not referring to just anyone engaged in commerce or investment, or even to someone who happens to be rich. He’s talking about the person hoards his wealth-that is, a miser.

Misers keep their wealth, or rather, their money, safe. They hole up in their bedrooms, counting their gold bullion and hiding it in their mattresses. Jesus is condemning the person who by hoarding trusts his possessions rather than God. As he puts it elsewhere: “You cannot serve God and wealth” (Matthew 6:24).

For sustained prosperity, policy makers need to ask what policies best encourage entrepreneurs to act like entrepreneurs, and not like misers.

Many of the biblical warnings about wealth seem to apply to misers. But how many misers like Ebenezer Scrooge have you met? Do you know anyone who keeps a bag of money in his mattress, where he can count it? Probably not. We see misers on TV, read about them in children’s books and in Dickens. Sure, there are a few survivalists, who fear the imminent arrival of Armageddon. They separate themselves from society, and store up food, water, and guns for the dark night ahead.

But in capitalist societies, misers are hard to find. That’s because capitalism, when functioning properly, discourages miserliness, and encourages its near opposite: enterprise.

Gift Givers

“The grasping or hoarding rich man is the antithesis of capitalism, not its epitome,” writes George Gilder, “more a feudal figure than a bourgeois one.” If you compare the miser with the entrepreneur, you’ll see that on the crucial points they are opposites. The miser prefers the certainty and security of his booty. Entrepreneurs, in contrast, assume risk. They cast their bread upon the waters of uncertainty, hoping that the bread will return with fish. They delay whatever gratification their wealth might provide now for the hope of future gain. The miser treats his bullion as an end in itself. The entrepreneur, whatever his motives-including the desire for more money-uses money as a tool. The carpenter uses hammer and saw; the doctor, scalpel and stethoscope; the entrepreneur, cash and credit. Only by the constant din of stereotype could we come to mistake the entrepreneur for the miser.

Capitalism, when functioning properly, discourages miserliness, and encourages its near opposite: enterprise.

In his modern classic, Wealth & Poverty, George Gilder explores a surprising feature of enterprise: supply precedes demand. After all, before you can exchange, you must first have something to exchange. I must have a good or service, a coconut or a potholder or an iPod that someone wants for trade to ever get started. Right off the bat, if I’m an entrepreneur, I have to think about the wants and needs of others. Great entrepreneurs succeed by anticipating and meeting the desires of others. In that sense, Gilder argues, they are altruistic-alter in Latin means “other.” Entrepreneurial investments, he argues, are like gifts, since they are made without a predetermined return. Competition between entrepreneurs in a free economy thus becomes an altruistic competition, not because the entrepreneurs have warm fuzzies in their hearts, or are unconcerned with personal wealth, but because they seek to meet the desires of others better than their competitors do.

Not for nothing did Ayn Rand dedicate her final lecture to a tirade against Gilder. But her official view of the capitalist, in the end, was skewed by the Marxist stereotype she had officially rejected. Gilder’s view captures much better the nature and subtlety of entrepreneurial capitalism.

‘The grasping or hoarding rich man is the antithesis of capitalism, not its epitome.’

Far from requiring vice, entrepreneurial capitalism requires a whole host of virtues. Before entrepreneurs can invest capital, for instance, they must first accumulate it. So, unlike gluttons and hedonists, entrepreneurs set aside rather than consume much of their wealth. Unlike misers and cowards, they risk rather than hoard what they have saved, providing stability for those employed by their endeavors. Unlike skeptics, they have faith in their neighbors, their partners, their society, their employees, “in the compensatory logic of the cosmos.” Unlike the self-absorbed, they anticipate the needs of others, even needs that no one else may have imagined. Unlike the impetuous, they make disciplined choices. Unlike the automaton, they freely discover new ways of creating and combining resources to meet the needs of others. This cluster of virtues, not the vice of greed, is the essence of what Rev. Robert Sirico calls the “entrepreneurial vocation.” Similarly, AEI’s Michael Novak has talked about business as a “calling.”

Why Rand?

So why do so many defenders of capitalism turn, not to the insights of thinkers like George Gilder and Michael Novak, but to apostles of greed like Ayn Rand? My guess is that Rand continues to be popular because of a key literary insight: However much she officially praised selfishness, her protagonists are not misers. On the contrary, the heroes of her novels are entrepreneurs. How many other authors or playwrights have done that? Survey novels, plays, and movies with business people as characters. Ordinarily, those characters are the villains, not the heroes. In fact, I can think of only two well-known movies in which a business man qua business man is the hero: It’s a Wonderful Life and Charlie and the Chocolate Factory. And even here there are dissonant notes. In It’s a Wonderful Life, George Bailey is balanced by the easy-to hate, greedy banker, Mr. Potter. And Willy Wonka, though an entrepreneur, is a bit antisocial and eccentric.

The miser treats his bullion as an end in itself. The entrepreneur uses money as a tool.

So Rand stands out from the pack. Whatever her philosophical failings, she recognized the heroic aspects of entrepreneurship. Without entrepreneurs, little of what we take for granted in our economy and our everyday lives would exist. Here in my office, the concrete forms of entrepreneurial imagination are everywhere: paper, scissors, pens, highlighters, ink, CDs, an empty Tupperware container that held the pork loin I ate for lunch, a flat-screen monitor, fonts, lamps, lightbulbs, windows, sheet rock, speakers, a laptop computer, and an optical mouse. Behind all these visible objects lie real but less visible innovations in finance, manufacturing, and transport that I scarcely comprehend. All of these things are gifts from entrepreneurs.

Encouraging Entrepreneurship

Of course, entrepreneurial capitalism doesn’t exist in an anarchic vacuum. Some individuals may have an entrepreneurial vocation. For an economy to channel their energy into productive ends, however, it needs to provide incentives. On the one hand, if financial policies encourage entrepreneurs to take unsustainable risks-in the reasonable hope of a government bailout or a quick sale of a bad loan to a government-sponsored enterprise-then they’ll take those risks. On the other hand, if unvetted federal officials capriciously dictate limits to compensation for corporate executives, and politicians consistently debase the currency, entrepreneurs may become averse to productive risk-converting investments from risky, illiquid, long-range ventures into much safer silver and gold. So for sustained prosperity, policy makers need to ask what policies best encourage entrepreneurs to act like entrepreneurs, and not like misers. Now that I think of it, perhaps that ought to be the economic question of the day.

Notes

1. George Gilder, Wealth & Poverty (San Francisco: ICS Press, 1993), p. 30.
2. Ibid., p. 27.
3. Ibid., pp. 20-24.
4. Ibid., p. 37.
5. Robert A. Sirico, The Entrepreneurial Vocation (Grand Rapids: Acton Institute, 2001).
6. Michael Novak, Business as a Calling: Work and the Examined Life (New York: The Free Press, 1996).

Image by Darren Wambold/Bergman Group.

Diamond Tips on Great Day Houston

Fox 26 – Valentine’s Day Jewelry Buying Tips

Stop Buying and Selling Blood Diamonds

The Kimberley Process and World Diamond Council are a sham.

Severe human rights violations, including murder, rape and forced labor, have taken place in the diamond fields of Marange, Zimbabwe. Recent reports from Human Rights Watch (HRW) indicate that these horrific conditions continue to take place.

Blood diamonds from Marange, Zimbabwe, have been issued Kimberley Process (KP) certificates and imported into the cutting centers, where they were cut and polished and then sold to dealers, jewelry manufacturers and retailers. Tens of thousands of carats of blood diamonds are now in dealers’ inventories and jewelers’ showcases — and are being actively sold to consumers.

The jewelry trade’s purchase and distribution of blood diamonds is funding a continuing cycle of horrific human rights violations. Our industry is providing money and distribution to those who murder, rape and enslave. Every time we buy or sell a blood diamond, we are sending a message of encouragement to the perpetrators of these inhuman crimes. We are legitimizing their dirty business. We become their partners in crime.

We must face the fact that the KP has been issuing certificates for Marange blood diamonds. The KP has made these “certified blood diamonds” perfectly legal. Customs officials did not — and do not — have the right to stop Marange diamonds with KP certificates. Instead of eliminating blood diamonds, the KP has become a process for the systematic legalization and legitimization of blood diamonds. When you get right down to it, the KP has become a blood diamond laundering system. The KP is not just a sham; it’s a scam.

To understand how this could happen, we must define “blood diamonds” and compare our definition to the KP definition of “conflict diamonds.”
Rapaport definition:“Blood diamonds are diamonds involved in murder, mutilation, rape or forced servitude.”

KP definition:“Conflict diamonds means rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments, as described in relevant United Nations Security Council (UNSC) resolutions insofar as they remain in effect, or in other similar UNSC resolutions which may be adopted in the future, and as understood and recognised in United Nations General Assembly (UNGA) Resolution 55/56, or in other similar UNGA resolutions which may be adopted in future…”

The KP definition of conflict diamonds does not address human rights violations and does not include blood diamonds. It is a legal definition established by governments to limit the scope and authority of the KP. The KP is a highly politicized process controlled by governments for governments. Its primary function is to protect governments and their revenue — legitimate or not — from rebel forces and consumer boycotts. The KP is essentially agnostic when it comes to human rights. As HRW concluded in its November 6, 2009, report: “This diamond monitoring body has utterly lost credibility.”

In spite of the above, there is a common misconception in the jewelry trade that diamonds with KP certificates are free of human rights abuses. Trade organizations, under the misguided leadership of the World Diamond Council (WDC), have promoted and continue to promote the KP as an acceptable standard for ensuring human rights compliance, even though they know that the KP has been issuing certificates for blood diamonds that have penetrated the diamond and jewelry supply chain. The WDC refuses to inform the trade that the KP cannot be relied upon to ensure human rights compliance and that polished blood diamonds are in the supply chain. The WDC has lost its moral compass. Its primary loyalty is now to the KP and not to the diamond industry or even the basic principles of human decency.

“Our narrative could end here, but I have a much broader definition for a blood diamond. Here is my definition:
  • Any diamond that was mined using oppressed labor in unsanitary working conditions.
  • Any diamond whose oppressed labor force was victimized in the form of rape, mutilations (loss of arms or legs), beatings, verbal abuse, unconscionable working hours, and below poverty wage structure.
  • Any diamond that the company who mined it or controls its tariffs is part of a monopoly.
  • Any diamond that funds wars or corporate greed where profits supersede human life.
  • Any diamond that is used to oppress any human life or the extinction of any race, tribe or sub-culture.
  • Any diamond that is purposely graded incorrectly and marketed for corporate profits instead of consumer satisfaction.
  • Any diamond that is sold at a price above its secondary market resale value forcing the consumer to take a significant loss if it was to be resold.”
  • -Fred Cuellar

What To Do?

• Raise Consciousness. We need to raise consciousness within the jewelry industry about the problem of blood diamonds so that people will stop trading them. Industry organizations that should play a role need to be awakened. I suggest sending emails to Terry Burman, chairman of Jewelers of America (JA), director of the Responsible Jewellery Council (RJC) and the WDC, at tburman@jewels.com; Matt Runci, president and chief executive officer (CEO) of JA, chairman of the RJC, director of the WDC, at matt@jewelofam.org; Cecilia Gardner, president and CEO of the Jewelers Vigilance Committee (JVC), director of the WDC and CIBJO, at clgjvc@aol.com. You might want to cc the email to other leaders and send a copy to us.

Ask these leaders to confirm that polished blood diamonds are in the distribution system and ask what you or they can do about it. Ask them to use their organizations to inform the trade about the problem. If you know anyone on the board of these organizations, give them a call and ask them to have their organization let people know about blood diamonds.

Email us at fairtrade@rapaport.com if you would like to help us raise consciousness. We will be holding conferences to discuss the issue at BaselWorld on Friday, March 19, 2010, at the Basel Congress Center from 2:00 p.m. to 4:00 p.m., and the JCK Vegas Show, Monday, June 7, 2010, at the Sands Convention Center from 2:00 p.m. to 4:00 p.m. We need new ideas and solutions. We need your help to get organized.

• Stay informed. Visit diamonds.net/zimbabwe for background information and google Marange diamonds to stay up to date. Help us stay informed. If you know about people or companies that are selling Marange diamonds, email us. While we don’t have the resources to investigate all claims, if a name comes up enough or the case is compelling, we will quietly notify relevant investigative authorities.

• Return diamonds that you suspect may be blood diamonds. Pay careful attention to diamonds that have a green hue. Unless you are absolutely sure of where the diamond came from, it is probably a good idea to return all diamonds with a green or green/gray hue in the D to Z and light green color range, not fancy green colors. While there are green diamonds from other places, about 60 percent of Marange’s cuttable diamonds are green and tens of thousands of carats have come onto the market over the past year. Furthermore, we are getting reports that the color of some green Marange diamonds is unstable and may worsen.

While many in the industry are opposed to the idea of returns, the hard fact is that you are going to have to make a personal decision about what to do. Thanks to the KP, blood diamonds are perfectly legal and you have no right to return them. On the other hand, do you really want to be selling what may be blood diamonds? It’s a financial and ethical issue with a high dose of uncertainty. There may be no clear answers. You might want to talk to a spiritual or ethical adviser.

• Ask Before You Buy. As noted in the HRW campaign*, “Zimbabwe’s Blood Diamonds, Ask Before You Buy,” asking is probably the most important thing you can and should do. Recognize that you are responsible for what you buy and that someone’s life may be at stake. Make sure you know who your suppliers are and ask them serious questions to ensure that the diamonds you buy are not from Marange nor involved in other serious human rights abuses. Err on the side of caution. Tell your supplier you really care about where your diamonds come from. If they know you care, they also will care. Make it a point to personally talk to every diamond supplier about human rights issues and how important they are to you.

You will also want your supplier to sign a document promising to refund payment for any diamonds that turn out to be associated with human rights violations. But don’t rely solely on the paper; remember to have the talk.

Conclusion

It’s time to transcend Kimberley and the WDC. One wonders how many lives will have to be destroyed before the demonstrations begin — before victims come marching down Fifth Avenue, as they did a decade ago. What will it take to get our trade to stop buying and selling blood diamonds?

I know that there are many good and decent people in the diamond and jewelry trade. And I know that many of you care but are frustrated and feel the situation is hopeless. I urge you to reconsider. I urge you not to give up.

We can and will beat this problem. It will take time and unprecedented levels of cooperation. But I do believe that there are enough people in our industry who really care about human rights and that we can make a difference by working together. There is so much good that we can do. I am confident that when the right people come together, we can and will build a more fair and ethical diamond market. We can and will create solutions that will make the world proud of us and our diamonds.

By Martin Rapaport

January 29, 2009

Click here for original article.

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“Certified”: A Dirty Word in Today’s Market

You see or hear the ads all the time—we sell only GIA, AGS, EGL etc “certified” diamonds with a “certificate” to back it up. Thanks for telling me—RUN! “Certified” is a word that is supposed to put you at ease, make you relax, so you put your guard down. But it is meaningless.


The lab “certificates” are riddled with disclaimers that specify it is strictly a bought opinion and in no way guarantees anything, making the “certificates” worthless. The jeweler will pretend he bears no responsibility because someone else graded it, so who or what “guarantees” the diamond? Nothing and nobody! Guess who is left holding the bag? Any jeweler who doesn’t tell you that “certified” does not guarantee anything, belongs in the same cell as Bernie Madoff. Look up the definition of certify (verb: certified) which includes “to guarantee as meeting a standard or to confirm formally as true, accurate or genuine.”

Do you know where the safest country in the world to buy a diamond is? Well, it’s not the United States anymore! It’s India where jewelers are buying back the diamonds they sell to customers who aren’t happy! “They’re not just selling diamonds, they’re selling security and trust”, said Marc Goldstein from Rapaport.* India is the first country whose jewelers stand behind the merchandise they sell with a lifetime buyback policy!

Currently only about twenty percent of jewelers in the U.S sell fully bonded diamonds! (Diamonds with a lifetime buyback policy). Disgraceful! I’m sick and tired of seeing a young couple down on their luck and being forced to sell their diamond to find out that it is only worth an average of 19.7% of what they PAID! Their usual response when they find out that they have been taken to the cleaners? “But it was “certified”?! Buying a “certified” diamond is about as safe as jumping out of an airplane without a parachute and told to flap your arms! I can’t be more serious about this pandemic that is destroying the integrity of diamonds. Please DO NOT buy a diamond from anyone who even whispers the word “certified”. Let 2010 be the year that we banish the dirty word “certified” from the diamond business forever and replace it with a fully bonded appraisal (F.B.A). That leaves you 100% in the driver’s seat! By refusing to buy any diamond that is misrepresented and only comes with a 30-90 day return policy you will never find yourself with a diamond you don’t want and no where to turn. Don’t buy “certified” diamonds from anyone! Fairness has to mean something again in the diamond industry!

*Goldstein, Marc. Rapaport. December 2009. Vol. 32 No. 12. Pg 49.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

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