3 key themes for 2013

To do well in the market in the coming year, you must understand the euro, oil and gold.

By Jim Cramer Dec 27, 2012 10:16AM

Thestreet logoPhotodisc Blue Getty ImagesThree trends that weren't supposed to happen in 2013: a strong euro, weak oil and positive gold. These three trends have to be explored, because they are pretty difficult to fathom but must be fathomed if we are to understand 2013.

First, the euro. We all know that the euro was supposed to be kaput by now, replaced by the deutsche mark, franc, lira and everything else, with the deutsche mark starting the trend. This was a total misread of history and of the denouement of World War II. There's no way that we could ever understand the depth of fear of another war or the guilt the Germans feel. They are simply not going to let this happen. We focused only on the economics of it, not the politics, and the richer countries are willing to lose money endlessly on Greece if that's what it takes, because Spain, Italy and Ireland are coming back, as is the European stock market. The bankers and hedge funds in this country are way too smart for their own good, because they know the numbers but not the history. The euro could go higher still, because I sense that no one large owns it.

Oil is a function of supply. It is beginning to dawn on people that the statistics for the U.S. are far more robust than what the numbers and predictions indicate. Every month, numbers coming out of Texas and North Dakota are much better than people expect. Endless upside surprises, and yet most of the big interests aren't even drilling there yet. The major oils are slow of foot and let the independents in while they focused on unstable areas such as West Africa and Indonesia, both of which will perhaps be confiscated by poor countries that mistakenly gave them rights. The whole federal-lands thing is a big sideshow.

There's talk that natural gas will tighten because of the lack of drilling, but Mark Papa, the best wildcatter there is and the CEO of EOG Resources (EOG), says there's no demand for the stuff, and very few plants are being built to use it. Plus all of the power plants that can convert have already done so. If we could harness natural gas as a surface fuel, I have no doubt that gasoline would be at $2.50 rather fast, but the administration would despise that, because it would encourage fossil fuel use. We are the reason why oil is not going higher. If Iran joined the Council of Nations, oil would go to $75, but it won't, so take that off the table.

Finally, gold, is now finishing up 6% for the year despite predictions that this, the 12th straight up year, would bring the long-expected crash. Gold is the opposite of oil. There's just not enough of it. Go over the quarters of Goldcorp (GG), Agnico-Eagle Mines (AEM), Newmont Mining (NEM) and Barrick Gold (ABX). The costs are astronomical, the finds pitiful and, like oil, the only countries where confiscation isn't an issue are in North America. Everything else is dicey.

In 2013 it will be even harder to find, so gold, I believe, will have still one more up year.

Gold is endlessly described as a hedge against inflation, or a hedge against chaos, or a hedge against deflation, or a hedge against central bank reflation. Gold is a story of the worldwide middle class trying to get its hands on some precious metals to become and feel rich. There's not enough gold being found. Period. End of story.

Cramer's face 


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.




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Dec 27, 2012 12:19PM
Jim stumbled into one thing, but even a blind squirrel can find his own butt in the dark every once in awhile.  Here's 3 investment strategies that will actually work in 2013:

1. - Short the dollar against the Euro
2. - Short bonds
3. - Listen to Cramer and then do the opposite of whatever he recommends

If you want to take it a step further, get used to the ever expanding underground economy that will only grow exponentially thanks to tax hikes and Obamacare.  While it's hard to imagine now, the amount of business conducted under the table is going to go through the roof.  More and more workers will be paid in cash and won't even be listed on the books.  We're going to see a huge increase in the numbers of workers employed through temp agencies.  We're also going to see lots of people "hired" as independent contractors - they'll be doing the same work but they'll be responsible for their own benefits, tax withholdings, etc...  Look for big increases in usage of websites like Craig's List as people will be bartering and trading and paying cash person-to-person to avoid taxes.  In addition, as food prices rise, you'll see more and more people getting their food from places other than the grocery store - they'll be growing/raising their own, fishing and hunting more, utilizing more roadside stands and markets, etc...

Dec 27, 2012 12:59PM
It's funny how a man like Jim can still refuse to face the truth that the consumer is not the jubilant spender we were supposed to believe to be the savior of our fragile (tanking) economy. Now his optimism is narrowed down to Texas and  North Dakota as beacons indicative of a strong US economy. Things are turning out to be much worse than the consensus among analysts, and when all is said and done, history will show we never had a recovery at all, while the markets were rigged to the upside.
Dec 27, 2012 1:26PM

The Major Problem....With utilization of a Mobile workforce, Independent contractors, Temporary workforce and Underground employment....Is in my opinion a loss leader to the "Destruction of the Middleclass.".....Not necessarily elimination, but certainly a change in values assigned..

And a much bigger "wealth distribution" to those in control or what is considered the Rich or upper levels of a Society.

The lower middleclasses and the poor will struggle as a undermining portion of a Nation..

The barriers will become harder to break....And the Elite will encumber themselves only to their own.

I think Greece is a good example in recent times...But we are not really close to their plights at this time.....I would sooner compare ourselves to our period of time say 1850s through roughly the 1940s.

Without stabilization, we could fall back to somewhere in those time frames for a large segment of our population...Just getting by..

Dec 27, 2012 12:49PM

Brutus....Yes I see a much bigger influx of "independant contractors" and such organizations as "man power" or other "temp agencies"...

Companies and Corporations want to eliminate those departments, that have to handle people, along with training and wasting production time on teaching people the ropes or bringing them into the "company culture". It eliminates benefits,pensions,healthcare,sick time and vacations from the business at hand. And the time is spent more wisely adding to the bottom line...

In many cases it stifles employee organizations and the possibility of Unions entering; The hiring or contracting Workplace....Majority of workers become independant contractors and it's every man/woman for themselves....Competeing for that slot, whether it be temporary or in some cases long term. Legions of workers with no permanent ties to the workplace..

Kinda like hiring "vagabond worker bees" or "soldiers of fortune."

And a "handful or a couple of people" in Human Resources can manage the workforce.



Dec 27, 2012 1:01PM

The "Underground Workforce" is becoming much more prevalent....Especially where one breadwinner has a stable taxpaying job with benefits...The other part of the group or pair has the freedom to freelance and add to household income, picking and choosing to work for the man...

This has been going on for 2-3 decades and is getting much worst...

I find the Majority of this group to be somewhat lazy and and mediocre at best with their skills..

But they are accepted because they can be paid less and are hired to to do a specific task for a short time period....Their back-up is the person with stable employment; Otherwise they would starve to death...

There is great advantage to illegal or legal immigrants in this mantra....

And we as Americans in many cases exploit this factor...It's just done quietly.

Dec 27, 2012 1:08PM
Looks like we are seeing a little race to the exits to lock in on that "known" capital gains rate.  Surprisingly orderly, I would think the risk of missing out and getting a huge bump might start a small stampede. 
Dec 27, 2012 1:32PM
I think a lot of people were just waiting and seeing if a plan might come at the last minute.  Now that it appears none will share price now comes into play.  Might see some unusual event in the next few days.  JMHO
Dec 27, 2012 12:07PM
Could this be an admission that Jubak's liberal bias has failed?  Isn't he on NBC?  I occasionally read his predictions ... and then invest just the opposite. 
Dec 27, 2012 2:15PM

To do well in the market in the coming year, you must understand the euro, oil and gold.


heres what u need understand....its all KOOLADE!!!

Dec 27, 2012 2:49PM
Okay... Brutis, stop posting your junk history. Indeed we could see a hyper-inflation condition but not like Germany. This one will numb the overpriced good and compromise the retailer. Jim is off in la-la land dreaming about stock gains in 2013... the wiser move would be to sell now and avoid the rush as organized finance plummets to ZERO. You went to Harvard, Jim... name ANYTHING solid about the composite of businesses and institutions today? They have nothing, ergo, they can fall to ZERO. If I went to Harvard, I would have focused strongly in Validation 101. Nothing from nothing leaves nothing and even the briefest of glances at who is working and succeeding now, validates the nothing. They took OVER jobs, not formed them. They READ about them in textbooks, not LEARNED on the way up the ladder. They are connected alumni, not self-made individuals. All ingredients for massive failure.
Dec 27, 2012 12:43PM

To "support confidence in the markets" the government central economic planners sit behind the curtain pulling the levers and pushing the buttons that keep the stock markets trending gently upward. This year they've decided to engineer a 5-7% gain. 

Dec 27, 2012 1:56PM

I'm not really sure NEXT Time.....Don't really see any running to the exits...Volume kinda THIN...

Particularily on on stable equities.....Maybe a few losses being taken, others are buying some stocks that are beaten down the last week or so about 3-5%


Other Companies that have came out with prospects or going forward good ratings are being gobbled..

The Market doesn't really have any "stable" guidposts at this time.


And everyone seems to be sitting on their hands and playing "wait and see." ?????

Dec 27, 2012 12:52PM
I just wonder how the market would have responded if Mitt was elected president?  My bet, would be that the market would be up at least 1000 points! 
Dec 27, 2012 2:15PM

Tog & Brutus

I have seen this trend of companies using hiring agencies in Ontario for a decade now.  General laborer and low skill manufacturing (what little is left) use agencies exclusively, it is impossible to be hired full time in those areas.  Makes sense as new projects/contracts may last a few months but these days there are no guarantees about work after that.

As far as alternative food sources I have friends who have built large planters in their backyards (average size lots for a home built in the last 10 years) and have started composting table scraps for soil.  They are buying maybe 1/2 the veggies and 1/3 the fruit they previously bought.... might have to join in.

Dec 27, 2012 2:20PM
Well RE-Tog;  If you need a little gamble give me odds on were we will be Monday PM.  I'm saying.  chances are 1:10 for down 300, 1:4 for down 150 and 1:2 down 100.
Dec 27, 2012 2:00PM

Just don't feel this "fiscal cliff" BS is that big of a deal...And trends will remain intact..

With a possible switch and shuffle effect...That will be short lived...

But Kramer may have a better Crystal Ball..........???


I bought mine at WalMart.

Dec 27, 2012 2:03PM

Haven't been to a Casino for almost a month....And we have a little Christmas money...left over.

Ms Lilly says she wants me to treat her to a little R&R....We deserve it.


Dec 27, 2012 5:31PM
Well strong afternoon rally, recovered almost all of todays losses.  Hope it rolls over into Friday!
Dec 27, 2012 6:04PM

BRUTISBEAR5:Let me set the record straight.Yes, I retired as a teacher when they

offered a buyout if you had 20 years service.I retired and opened a business.I hope to

go public with it in 2 years.Be sure to buy the IPO, Brutis and Classic lady.

Dec 28, 2012 4:44AM

The Republican, Neo-Con. Libertarian and Tea Party Fascists plans to take over America will never succeed as long as all us vigilant, just and patriotic Democrats are there to STOP you.


It will NEVER happen under our watch!




God bless Freedom, Prosperity and Justice for all in America!



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[BRIEFING.COM] Equity indices continue drifting near their recent levels with the S&P 500 (+0.1%) showing a slim gain, while the Russell 2000 (+0.6%) remains near its session high.

Not much has changed among the ten sectors with materials (+0.6%) and industrials (+0.5%) remaining ahead of their peers. The industrial sector has continued drawing support from transports as evidenced by a 1.0% gain for the Dow Jones Transportation Average.

However, the solid gain masks the ... More


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