A report by Standard Chartered predicts that gold is heading for $5,000 an ounce. The days when people were dumping gold, and mocking its future prospects, are long gone. It appears that the growing demand for gold will outpace the supply. Yet, one might ask why this is happening? Why is there a sudden demand for gold?
Think of a man who has been walking happily among the trees only to realize he is lost in a dark wood. Financially speaking, paper and/or digital representations of wealth are like pleasant trees as we walk happily along. Soon enough, however, the trees become a forest and we are lost. The estimated value of global stocks are around $36 trillion, with total world derivatives close to $800 trillion. A dark forest of paper, indeed. In all of history, men have probably mined no more than 170,000 tons of gold. If melted into a single slab, all this gold would approximate a giant cube not more than 21 meters in length, width and height. At the current price of gold, this cube wouldn't amount to $9 trillion. So ask yourself: As we seek a way out of our forest, is gold bound to rise? Common sense suggests it will. After all, gold is rare while other wealth-storing instruments have been inflated. And then there is our "monetary nihilism" to consider.
It was Friedrich Nietzsche, writing in the 1880s, who foresaw an era of nihilism and the "transvaluation of all values." Aside from questions of general philosophy, what if we have been following a philosophy of "monetary nihilism" these past 100 years, and have already perpetrated a transvaluation of all financial values? What if, in this regard, we are about to reap what we have sown? What if, instead of the death of God suggested by Nietzsche, we are looking at the death of the almighty dollar? Think of those "madmen" who have been warning of this advent for decades. Were they blasphemers, or were they prophets? It seems we are on the point of finding out. For if gold is headed to $5,000 an ounce, what does it say about the dollar's future? And what about the Republic for which it stands? Are we not talking about an economic tumble of cosmic significance?
If the dollar collapses perhaps gold will take its place. I see many people shaking their heads. It is impossible to go back to the gold standard, they say. It is old-fashioned, and some observers are clever enough to see that other old-fashioned things would have to reappear as well. The old order -- moral, epistemological and metaphysical -- would have to stage a comeback. The present-day culture of borrowing and consuming could not go on as it has.
But isn't there something inside of us that wants to find the true path? Lost in our forest of paper investments, where true and false values are increasingly difficult to distinguish, where do we look for answers? It is only natural, under the circumstances, to look for answers in the past. How did our ancestors answer the question of value? And how well has it served us to depart from their ways? We believe ourselves to be more advanced than our forefathers. We enjoy a higher standard of living. But is our understanding of fundamental things superior to theirs?
If modernity is the era in which man denies right and wrong (moral nihilism), the era in which man denies that truth is knowable (epistemological nihilism), the era in which man denies objective reality (metaphysical nihilism), then wouldn't it follow that such an era would see the rejection of gold as money (financial nihilism)? For we, as a civilization, have gone down every one of these paths. And a disaster is now beginning to manifest itself.
Upon reflection it seems obvious that we can no more reject right or truth or reality than we can reject gold (which now stages a comeback). Clearly, our nihilism has backfired with such force (although delayed) that every attempt to defend the nihilistic creed merely intensifies a crisis of return; that is, a return to traditional value systems, which include quite naturally the gold standard. This crisis, I might add, is not a voluntary thing. It is being forced upon us by moral, epistemological, metaphysical and financial bankruptcy.
Discarding the guideposts of the past, straying from the folkways and laws of his forefathers, man finds that he has lost touch with himself; denying what he is, and who he is (which is the universal symptom of our time). One only has to examine the creeds that hold fascination today to realize that as they claim to be creeds of identity, they are actually creeds of misidentification (sexual, ethnic, and cosmic). The epidemic of narcissism in our midst is an epidemic of self-misidentification insofar as the narcissist denies his true self in favor of an "image." In all of this, he remains cut off from feeling -- from the roots of his being. Here is the false foundation of today's prevailing value system.
In Carl Jung's Psychology and Alchemy the good doctor suggests that "[religious] rites are attempts to abolish the separation between the conscious mind and the unconscious, the real source of life." Further down the paragraph he warns against "the danger" of cutting off instinct. Look at the financial world today and ask yourself whether instinct has suffered an attenuation. Using science to validate religion, Jung argued that lower animal instincts and transcendent religious instincts are denied by modern man, and that this denial is dangerous. It leads directly to a lack of meaning, and to confusion. Think, once more, of the man who is lost in the woods. Such a man does not have the animal's sense of direction, nor does he hear the voice of God that would lead him out of the wilderness. Not everyone is bound to reach the Promised Land.
