NEW YORK (
fills his blog on
every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- why gold is a currency;
- why Europe is much worse off than we are; and
- the potential bottom in oil and gold stocks.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Gold Is a Currency
Posted at 3:55 p.m. EDT on Friday, June 1
We have made up our minds with this employment number that nothing's safe, which, alas, has people buying gold. Remember gold? I think this move tells you that sometimes the market's just wrong.
We have heard endlessly that gold is no longer any good, that it has lost its luster and that it is not an investment and that it is anything but safe ... and then we get today and suddenly "of course it's the safe haven."
I have always found this not-safe-haven talk to be extraordinarily wrongheaded and have always felt the need to defend gold, even though it does not need defending given its 11-year record of gains.
But the reason I defend it shines on a day like today. I constantly refer to gold not as a commodity or a precious metal, it is a currency.
And right now all currencies are under assault from each other. The Europeans need the euro down to stay competitive. The Chinese have been subtly revaluing their currency down to regain export power.
And the U.S.? After today's employment number we are reminded that the safe haven that is the dollar isn't safe at all, except politically. Without growth -- and this employment number calls our growth into question -- we're just another deadbeat country that has spent too much with little opportunity to grow our way out of our hole.
As long as actual interest rates, real rates, are low, as long as paper currencies can't be backed up by the finances of the countries that print them and as long as we keep having a hard time finding the stuff gold will do just fine.
There are periods where we have been lulled into thinking that gold's just some sort of speculative nuttiness (witness the recent head slam Warren Buffett and Charlie Munger put on gold at the
There are other periods where people say you can't own gold unless we have inflation. These people have been proven wrong repeatedly because gold thrived during the last deflationary move in 2008-2009. But what matters is that owning gold is simply an alternative for all of those who trade and invest and save in the currency of their home country. Because right now every home country seems like a pretty lousy place to trade, invest and save.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.
A Reminder -- Stay Clear of Europe
Posted at 7:20 a.m. EDT on Thursday, May 31
Them vs. us: Isn't that what it comes down to here? Why are we, as Americans, so willing to buy domestic stocks while not wanting to touch anything with European exposure?
I think that a lot of it has to do with our differing political systems and central banks. I hear constant criticism of our
and of Ben Bernanke in particular. But what is he guilty of? Is it creating an environment in which people aren't afraid of their shadow and actually want to invest? Is it giving us confidence that he has our back if something goes wrong? Is it that he's recognized that deflation, not inflation, is the bogeyman? Is it his understanding that Europe could pull down the U.S. economy, and make the recovery so uneven that he could not afford to raise rates like so many wanted him to do?
How about the U.S. political system? We aren't crazy about it. But, let's face it, we aren't getting rioting in the streets. When we hear the term "Occupy Wall Street" these days, we think of an advertising campaign about a brokerage firm.
Yes, our political parties may be diverge over what needs to be done. The Democrats are insisting that there be some tax hikes -- a responsible and easily defended position -- while the Republicans insist on none, which is a reasonable position for now, given how weak the economy is. Neither is antibusiness, per se -- although at times Obama sure sounds like he is.
Now contrast that with Europe, where the European Central Bank inspires no confidence whatsoever. The ECB hasn't even taken back its second rate boost from last year. Unlike the U.S. Fed, in which there are many voices but only one matters, we are given to believe that many people matter in the ECB, and that they don't agree on much at all.
Really, why should there be any confidence? You have some people signaling that the euro should be broken up. Others love it. Some want bonds printed by the ECB. Others think that's preposterous. You have banks in Europe that would have been shuttered in the U.S. years ago because of their reckless lending. The U.S. has standards, at least. Europe has nothing -- no real rules at all.
All that means no one really knows what's going on. That produces a situation in which you don't want to put money to work, because you are afraid it will be instantly for naught. It would be better to go buy U.S. Treasuries.
The U.S. is not perfect here. We have tons of flaws. But when you compare us to Europe, it's night and day. I would fear having any investment confiscated over there. I would fear an imminent outbreak of class warfare.
Here we just debate the merits of private equity, and even then, we don't reach many conclusions of any gravitas.
In short, it doesn't really matter at this point how well a company is doing in Europe. The fact that it is in Europe means it is subject to these inanities -- and, in the end, that's all that really counts.
Commodity Stocks Trying to Bottom
Posted at 7:16 a.m. EDT on Tuesday, May 29
The charts are saying that oil is trying to make a stand here.
Chart after chart shows that the stocks are trying to find their footing after a huge decline that seems to be about oil going to $85 and natural gas not going above $3.
But now Iran's thumbing its nose at the world and is even backing Syria -- is there anything bad they aren't connected with -- and there are signs that Brent can't get below $105 despite the stronger dollar.
Oil's real important here. We don't have enough domestic stocks to mount a rally. You can only take
Bed, Bath & Beyond
so far, as they have run a great deal as alternatives to Europe.
are typical of the space.
These are two of the worst-acting stocks I have come across since the incredible oil decline of 2008. They are crowded with sellers who seem to know nothing but to bang bids.
Price means nothing to these sellers. Nothing at all. But at a certain point all sellers exhaust themselves and even though these companies have the best growth -- Anadarko -- and the best balance sheet -- Devon -- nothing means a thing to these sellers
If these stocks bottom, then
bottom. And what would make that bottom? If they have converted far along enough to be more oily than gassy and if, somehow, bellwether
can stop going down.
There's a lot of speculation that somehow Carl Icahn's pressure can stop the decline in the stock through some changes in the board. I like Icahn, but unless he mounts a tender offer good luck with that. But the simple fact is he can put a bottom in CHK, which could put a bottom in the perceived cohorts while it switches from quarter to quarter to more oil than gas.
The other group of stocks that is trying to put in a bottom that has been in freefall is the gold group. I do not like these stocks at all and would vastly prefer owning the
SPDR Gold Shares
Still, those who want to take a chance, which would be gutsy because each of these companies have issues finding cheap gold, the order of quality and price right here starts with
, which has successfully negotiated various coups in Africa, then
, simply because it has had fewer problems, then
, which is a bet that it can get back on track after some issues at some key mines, and finally the disastrous
, which may have simply stopped going down because it has some good properties that will cause it to get a bid as part of a needed consolidation, although at $6 billion that's a tall order.
Still, Goldcorp and
, particularly the latter, would be nuts
to try to take a run at AEM these days just to get some growth going.
Now, you could argue that these two groups are bottoming because the dollar may be faltering vs. the euro. I think it's because they have fallen too hard, too fast in May and people recognize bargains when they see them.
Either way, you want cheap? There they are for the taking. Others are. Should you?
Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long DVN.