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The Power of Gold: The
History of an Obsession
Peter L. Bernstein
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Prologue |
About one hundred years ago, John
Ruskin told the story of a man who boarded a ship carrying his entire wealth in
a large bag of gold coins. A terrible storm came up a few days into the voyage
and the alarm went up to abandon ship. Strapping the bag around his waist, the
man went up on deck, jumped overboard, and promptly sank to the bottom of the
sea. Asks Ruskin: "Now as he was sinking, had he the gold? Or had the gold
him?"
People have become intoxicated, obsessed, haunted, humbled, and exalted over
pieces of metal called gold. Gold has motivated entire societies, torn economies
to shreds, determined the fate of kings and emperors, inspired the most
beautiful works of art, provoked horrible acts by one people against another,
and driven men to endure intense hardship in the hope of finding instant wealth
and annihilating uncertainty.
"Oh, most excellent gold!" observed Columbus while on his first voyage
to America. "Who has gold has a treasure [that] even helps souls to
paradise." As gold's unquenchable beauty shines like the sun, people have
turned to it to protect themselves against the darkness ahead. Ruskin's paradox
still arises and challenges us anew. Whether it is Perseus in search for the
Golden Fleece, the Jews dancing around a golden calf, Croesus fingering his
golden coins, Crassus murdered by molten gold poured down his throat, Basil
Bulgaroctonus with over two hundred thousand pounds of gold, Pizarro surrounded
by gold when slain by his henchmen, Sutter whose millstream launched the
California gold rush, or modern leaders such as Charles de Gaulle who deluded
themselves with a vision of an economy made stable, sure, and superior by the
ownership of gold - they all had gold, but the gold had them all.
When Pindar in the fifth century BC described gold as "a child of Zeus,
neither moth or rust devoureth it, but the mind of man is devoured by this
supreme possession," he set forth the whole story in one sentence.
John Stuart Mill nicely paraphrased this view in 1848, when he wrote
"Gold thou mayest safely touch; but if it stick unto thy hands, it woundeth
to the quick." Indeed, gold is a mass of contradictions. People believe
that gold is a refuge until it is taken seriously; then it becomes a curse.
Nations have scoured the earth for gold in order to control others only to find
that the gold has controlled their own fate. The gold at the end of the rainbow
is ultimate happiness, but the gold at the bottom of the mine emerges from
hell. Gold has inspired some of humanities greatest achievements and provoked
some of its worst crimes. When we use gold to symbolize eternity, it elevates
people to greater dignity - royalty, religion, formality; when gold is regarded
as life everlasting, it drives people to death.
Gold's most mysterious incongruity is within the metal itself. It is so
malleable that you can shape it in any way you wish; even the most primitive of
people were able to create beautiful objects out of gold. Moreover, gold is
imperishable. You can do anything you want with it and to it, but you cannot
make it disappear. Iron ore, cow's milk, sand, and even computer blips are all
convertible into something so different from their original state as to be
unrecognizable. This is not the case with gold. Every piece of gold reflects the
same qualities. The gold in the earring, the gold applied to the halo in q
fresco, the gold in the dome of the Massachusetts State House, the gold flecks
on Notre Dame's football helmets, and the gold bars hidden away in America's
official cookie jar at Fort Knox are all made of the same stuff.
Despite the complex obsessions it has created, gold is wonderfully simple in its
essence. Its chemical symbol AU derives from aurora, which means
"shining dawn," but despite the glamorous suggestion of AU, gold is
chemically inert. That explains why its radiance is forever. In Cairo, you will
find a tooth bridge made of gold for an Egyptian 4500 years ago, its condition
good enough to go into your mouth today. Gold is extraordinarily dense; a cubic
foot of it weighs half a ton. In 1875, the English economist Stanley Jevons
observed that the £20
million in transactions that cleared the London Bankers' Clearing House each day
would weigh about 157 tons if paid in gold coin "and would require eighty
horses for conveyance." The density of gold means that even very small
amounts can function as money of large denominations.
Gold is almost as soft as putty. The gold on Venetian glasses was hammered down
to as little as five-millionths of an inch - a process known as gilding. In an
unusually creative use of gilding, King Ptolemy II of Egypt (285-246 BC) has a
polar bear from his zoo lead festive processions in which the bear was preceded
by a group of men carrying a gilded phallus 180 feet tall. You could draw an
ounce of gold into a wire fifty miles in length, or, if you prefer, you could
beat that ounce into a sheet that would cover 100 square feet.
Unlike any other elements on earth, almost all the gold ever mined is still
around, much of it now in museums bedecking statues of the ancient gods and
their furniture or in numismatic displays, some on the pages of illustrated
manuscripts, some in gleaming bars buried in the dark cellars of central banks,
a lot of it on fingers, ears, and teeth. There is a residue that rests quietly
in shipwrecks at the bottom of the seas. If you piled all this gold in one solid
cube, you could fit it aboard any of today's great oil tankers; its total weight
would amount to approximately 125,000 tons, an insignificant volume that the
U.S. steel industry turns out in just a few hours; the industry has the capacity
to turn out 120 million tons a year. The ton of steel commands $550 - .02 cents
an ounce but the 125,000 tons of gold would be worth a trillion dollars at
today's prices.
Is that not strange? Out of steel, we can build office towers ships,
automobiles, containers, and machinery of all types; out of gold, we can build
nothing. And yet it is gold we call the precious metal. We yearn for gold and
yawn at steel. When all the steel has rusted and rotted, and forever after that,
your great cube of gold will still look like new. That is the kind of longevity
we all dream of.
Stubborn resistance to oxidation, unusual density, and ready malleability -
these simple natural attributes explain all there is to the romance of gold.
Even the word gold is nothing fancy: it derives from the Old English gelo,
the word for yellow. This uncomplicated chemistry reveals that gold is so
beautiful it was Jehovah's first choice for the decoration of his tabernacle:
"Thou shalt overlay it with pure gold," He instructs Moses on Mount
Sinai, "within and without shalt thou overlay it, and shalt make upon it a
crown of gold round about." That was just the beginning: God ordered that
even the furniture, the fixtures, and all decorative items such as cherubs were
also to be covered in pure gold.
God issued these orders many thousands of years ago. What is the place of gold
in the modern world of abstract art, designer jeans, complex insurance
strategies, computerized money, and the labyrinths of the Internet? Does gold
carry any significance in an era where traditions and formality are constantly
crumbling beyond recognition? In a global economy managed increasingly by
central bankers and international institutions, does gold matter at all?
Only time can tell whether gold as a store of monetary value is truly dead and
buried, but one thing is certain: the motivations of greed and fear, as well as
the longings for power and for beauty, that drive men to own gold are alive and
well at this very moment. Consequently, the story of gold is as much the story
of our own time as it is a tale out of the past. From poor King Midas who was
overwhelmed by it to the Aly Kahn who gave away his weight in gold every year,
from the dank mines of South Africa to the antiseptic cellars at Fort Knox, from
the gorgeous artworks of the Scythians to the Corichancha of the Incas, from the
street markets of Bengal to the financial markets in the City of London, gold
reflects the universal quest for eternal life - the ultimate certainty and
escape from risk.
The key to the story is the irony that gold cannot fulfill that quest. Like
Ruskin's traveler jumping off the boat, people take the symbolism of gold too
seriously. Blinded by its light, they cashier themselves for the illusion.
Do we have the gold? Or does the gold have us?
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Copyright © 2000 by Peter L. Bernstein
Printed and paraphrased without permission on this
non-revenue producing personal web page.
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