The market carnage in recent days has been something to behold and, as the debate continues about the degree the Fed’s “significant downside risk” view of the world the other day is to blame, that uncharacteristically sour view of things certainly didn’t help.

Anyone thinking that gold is a safe haven like U.S. Treasuries or the U.S. dollar has been reminded that it is surely not. At times like this, the yellow metal is sold along with everything else, reviving long before other asset classes, but only after policy makers start talking about how much money they’re going to print up for the greater good.

At least that was the lesson of 2008, which, given how conditions have deteriorated in recent days, would be the appropriate comparison. Sadly, it appears that the question of whether 2011 will “rhyme” with 2008 or 2010 is now being answered.

But, in the mean time, lower prices are available for investors seeking to trade in some of their increasingly shaky paper money for something more substantial.

[Taking a quick break from the financial market crisis and the search for root causes while looking back at September 2008,  this discussion on what motivates people to buy and hold gold was found from September 24th, 2008 and it rings true today.]

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There seems to be a good deal of confusion these days about the reasons why individuals should own gold.

Who owns gold?

While there’s the “momentum crowd” – those who will buy anything that is going up or sell short anything that is going down – these folks are more traders than owners and don’t really factor into the “ownership” discussion.

This leaves basically two groups of gold owners – those who fear a financial catastrophe and those who fear the debasement of paper money.

However you look at it, there’s a lot of fear associated with owning gold.

It’s the End of the World as We Know It and I Own Gold
The financial doomsayers seem to believe that the metal is some sort of insurance against the wheels falling off of the global financial system (or, perhaps, the outbreak of another major war … or both), in which case, all your other investments are likely to go down the tube.

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[This item popped up in the "Likely Related, Automatically Generated" section at the bottom of the last post and I just couldn't resist putting it back up. It originally appeared here on July 28th, 2010 and, after watching it again, we've decided to leave the peanut butter at home. By the way, I went back and looked and, on July 28th last year, the gold price closed at $1,157 an ounce, the final low before beginning its big "QE2" move higher.]

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After today’s exodus of another 18 tonnes of gold bars from the SPDR Gold Shares ETF (NYSE:GLD), another graphic showing the latest damage to the “tonnes in the trust” might have seemed like the right thing to hoist up late in the afternoon, but there’s a much more important threat deserving of attention – BEARS!

In addition to the above story from Colorado, not far from here the other day in Glacier Park, Jack Hannah fought off a grizzly bear as detailed in this ABC News report, all of which might have us visiting the local sporting goods store to buy some bear spray before our next hike.

Full Disclosure: Long GLD, no position in bears or peanut butter.