Contrary To What The "Experts" Have Been Telling You - Gold Is Horrible In A Market Crisis

For awhile it looked like the performance of gold might make for one major difference between 2011 and 2008.

In 2008, gold got destroyed as the market tumbled.

Gold, meanwhile, was at 1900/oz. just a few days ago.

Now gold is getting put through the meat grinder with everything else. Pretty much only US Treasuries, the dollar, and the yen are doing well.

What's the problem with gold? Quite simply, nobody has debts or bills to pay in gold.

Think of a financial crisis as basically a period in which everyone is scrambling to raise money to pay their debts. Mostly people have debt in dollars. A lot of people in Europe have debt in euros. There's a ton of yen-denominated debt out there. There's basically no gold-denominated debt (as far we know). Thus gold is a really great thing to sell (to raise cash). Very few people have an acute need to own more of it.

When growth is bad, and interest rates are ultra-low, there's a case for holding gold. When things are getting really ugly though, cash re-becomes king.