The mysterious five elements and I-Ching

The concept of five elements (金，水，木，火，土 Metal, water, wood, fire, and earth) became part of traditional Chinese culture earlier than I-Ching. The book of change echoed the Facilitative (相生) and Destructive (相克) aspects of the five-element concept. The question is what is the significance of the five-element concept, and how does it relate to the Chinese psyche.

In contemporary China, events are quite commonly referred to by numbers. For example, historic events like 77 incident, 918 incident, and the recent Xichuan earthquake was called 512 earthquake. For Chinese psyche, number has a mystic effect. The numbering system in the five-element concept looks like this:

Facilitative: A-B-C-D-E-A-B-C-D-E....to infinity
Destructive: A-C-E-B-D-A-C-E-B-D....to infinity

Where A=metal, B=water, C=wood, D=fire, E=earth

In circular form, it is like this:

If one thinks "facilitative" is physically closer to "destructive", he is wrong, because the arrangement of the elements are arbitrary. Destructive influence can just as well be put next to one another, with the facilitative influence jumping over!

What is the signification then for the five-element concept? It says every event will have facilitative effect towards something (not necessarily limited to one), and will have destructive effect towards something else (again not necessarily limited to one). This philosophical interpretation of reality form one of the key corner stone of I-Ching (and by extrapolation, the Chinese psyche too)