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The price of gold could beat the record high of $1,609.51 an ounce it hit earlier this week, a fund manager told CNBC Thursday.
"Gold will go much higher," said Irakli Menabde, founding partner of fund manager M2 Capital Partners.
"It's one of the most attractive investment opportunities out there."
The price of spot gold (Exchange: xau=) has tripled since the current bull market began five years ago.
While the price of gold usually falls during the summer, the past month has been very different.
During the last sizeable spike, in the 1970s, it saw a 24-fold increase from $35 to $850 per ounce, according to Menabde.
"Gold is a reflection of what's going on in fiscal and monetary policies of the developed world and what's going on in terms of the great inflation scare in emerging markets," he said.
Gold, seen as a safe haven in times of economic turmoil, has shot up as fears grow about debt crises on both sides of the Atlantic.
In recent years, its price has also been boosted by the increased buying power of India and China in particular.
As inflation is currently high in India, gold has become a more popular investment. India and China accounted for 58 percent of physical gold demand around the world in the first quarter of this year, according to the World Gold Council.
Another important factor in the rise of the price of gold has been the increase in exchange-traded funds (ETFs) buying physical gold.
Investments in ETFs backed by physical bullion rose to a record 2,156 tonnes on July 15, according to Barclays Capital.
Robbert Van Batenburg Head of Global Research, Louis Capital Markets told CNBC that the ETFs need for physical gold, stored in vaults, could have negative consequences.
"There has been a surge of ETFs to gold," he said. "At some point, this is going to put so much stress on the system and I fear regulatory zeal will be drawn towards these ETFs at some point."
M2 Capital Partners is sponsoring the GATA Gold Rush conference in London in August.
Menabde called for a gold stock market and said: "The gold physical market is more about the defensive nature of gold, but a gold stock market would also deliver dividends and surging share prices."
"We have seen the decoupling between the gold price and gold stocks, and at some point we will see the divergence between gold stocks price and physical price."
Cramer on Wednesday raised his price target on Apple from $400 to $500 a share. Yet at the $500 level, the technology stock will be selling at just 11.5 times his estimates for next fiscal year's earnings, only three quarters of what the average company in the S&P 500 index sells for.
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The price of gold could beat the record high of $1,609.51 an ounce it hit earlier this week, a fund manager told CNBC Thursday.
"Gold will go much higher," said Irakli Menabde, founding partner of fund manager M2 Capital Partners.
"It's one of the most attractive investment opportunities out there."
The price of spot gold (Exchange: xau=) has tripled since the current bull market began five years ago.
While the price of gold usually falls during the summer, the past month has been very different.
During the last sizeable spike, in the 1970s, it saw a 24-fold increase from $35 to $850 per ounce, according to Menabde.
"Gold is a reflection of what's going on in fiscal and monetary policies of the developed world and what's going on in terms of the great inflation scare in emerging markets," he said.
Gold, seen as a safe haven in times of economic turmoil, has shot up as fears grow about debt crises on both sides of the Atlantic.
In recent years, its price has also been boosted by the increased buying power of India and China in particular.
As inflation is currently high in India, gold has become a more popular investment. India and China accounted for 58 percent of physical gold demand around the world in the first quarter of this year, according to the World Gold Council.
Another important factor in the rise of the price of gold has been the increase in exchange-traded funds (ETFs) buying physical gold.
Investments in ETFs backed by physical bullion rose to a record 2,156 tonnes on July 15, according to Barclays Capital.
Robbert Van Batenburg Head of Global Research, Louis Capital Markets told CNBC that the ETFs need for physical gold, stored in vaults, could have negative consequences.
"There has been a surge of ETFs to gold," he said. "At some point, this is going to put so much stress on the system and I fear regulatory zeal will be drawn towards these ETFs at some point."
M2 Capital Partners is sponsoring the GATA Gold Rush conference in London in August.
Menabde called for a gold stock market and said: "The gold physical market is more about the defensive nature of gold, but a gold stock market would also deliver dividends and surging share prices."
"We have seen the decoupling between the gold price and gold stocks, and at some point we will see the divergence between gold stocks price and physical price."
Cramer on Wednesday raised his price target on Apple from $400 to $500 a share. Yet at the $500 level, the technology stock will be selling at just 11.5 times his estimates for next fiscal year's earnings, only three quarters of what the average company in the S&P 500 index sells for.
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Apple's stock [AAPL 387.41 
0.51 (+0.13%) 
] rallied 10 points on Wednesday while the overall market did nothing, yet Cramer said stocks are still the best asset class to own. To make his case, he compared the United States versus the "United States of Apple or more appropriately, iUSA." This comparison shows why stocks should be owned, he said, especially as companies are doing everything right while the country's leaders are doing so many things wrong.
0.51 (+0.13%) ] rallied 10 points on Wednesday while the overall market did nothing, yet Cramer said stocks are still the best asset class to own. To make his case, he compared the United States versus the "United States of Apple or more appropriately, iUSA." This comparison shows why stocks should be owned, he said, especially as companies are doing everything right while the country's leaders are doing so many things wrong. For starters, Cramer noted the U.S. is deeply in debt. If the U.S. wasn't such a large part of the world economy with a currency that has a legacy of being worth something, he thinks the International Monetary Fund would be knocking on the U.S.'s door at this rate of spending.
Apple, on the other hand, has $76 billion in cash and no debt to speak of, Cramer said. Some critics have actually complained that Apple should be putting its cash to work. Cramer thinks it made the right decision to keep its cash, though. After all, he doesn't think there have been any companies worth acquiring. He would, however, like to see Apple pay a dividend. Being as there are only 30 companies in the U.S. with a market capitalization larger than the cash position of Apple, some may argue it already has more than enough money saved for a rainy day, he argued.
So when it comes down to it, would you rather invest in a country that is deep in debt or a company that's prudent enough to say it will sit on its money until it finds a company worth buying? Cramer is going with the latter.
Next, Cramer compared U.S. leaders to Apple's management. For a long time, people thought of Apple as an one-man band, Cramer said. Many people thought Steve Jobs was the brains behind the operation and the one guy calling all of the shots. Since Jobs took a medical leave of absence last year, though, we've learned that Apple is culture full of great minds, who develop innovative products and give the customers what they want, Cramer said. Apple's management seems to encourage innovation and then nurtures it.
Meanwhile, Cramer asked what innovation has Washington fostered?
"Who the heck can even afford to innovate in that horrible atmosphere of rancor and anger where partisanship is the worst it's been since the Civil War," Cramer complained. "Oh, and let's face it, with the United States, the customer is always wrong, or at least the domestic customer, since we give money away left and right to unfriendly foreign regimes that a less diplomatic man than myself might call our enemies."
Cramer then discussed the balance of trade. Many companies and unions are complaining that we need more protection from trade partners overseas, he said. They want the government to help them sell more, but Apple is taking share left and right. It's destroying its competition around the world, he noted. Thanks to ingenuity, execution and brainpower, Apple is doing well in market after market.
Many Americans believe our best days are behind us, Cramer said. Nobody believes Apple's future isn't as bright as its past, though. He thinks Apple's future prospects are strong.
So what's the bottom line? To Cramer, Apple is a great example of why capitalism is worth cheering for. Unfortunately, Apple also puts U.S. leaders to shame because all they can do is bicker.
The price of gold could beat the record high of $1,609.51 an ounce it hit earlier this week, a fund manager told CNBC Thursday?
A. TRUE
B. FALSE
Many Americans believe our best days are behind us, Cramer said. Nobody believes Apple's future isn't as bright as its past, though. He thinks Apple's future prospects are strong?
A. TRUE
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OPEC's proven crude oil reserves rose 12.1 percent in 2010 to 1.19 trillion barrels led by Venezuela, which has surpassed Saudi Arabia as the group's largest reserves holder, OPEC said in its Annual Statistical Bulletin.
The latest figures are unlikely to quell scepticism about reserves estimates from the Organization of the Petroleum Exporting Countries, some of which analysts say may be exaggerated although the producers deny doing so.
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OPEC's proven crude oil reserves rose 12.1 percent in 2010 to 1.19 trillion barrels led by Venezuela, which has surpassed Saudi Arabia as the group's largest reserves holder, OPEC said in its Annual Statistical Bulletin.
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AP |
OPEC's growth in oil reserves was mainly due to Venezuela, whose holdings climbed to 296.5 billion barrels from 211.2 billion in 2009, the report said. Top OPEC exporter Saudi Arabia's reserves were steady at 264.5 billion barrels.
Iran and Iraq also boosted their reserves last year. In October, Iran increased its reserves to 150 billion barrels within a week of an upward revision by Iraq, ensuring that Tehran continued to rank above Baghdad.
"OPEC has a fantastic history of competitive reserves upgrades," said Bill Farren-Price, analyst at Petroleum Policy Intelligence.
Reserves are one of the criteria OPEC has used in setting output targets. Iran and Iraq were rivals in the past over OPEC quotas, and OPEC in the next few years is expected to tackle the issue of bringing Iraq back into the quota system. Iraq is exempt at present.
Iraq boosted its reserves to 143 billion barrels last year, up 24 percent, the report said. Iraq has said its reserves increased as work by international oil companies started to yield results.
Venezuela's move to the No. 1 reserves spot bumps Iran and Iraq to third and fourth place respectively. Commenting on the OPEC report, an Iranian official said the country still held its status as OPEC's second-largest producer after Saudi Arabia.
"Iran is still the second crude producer of OPEC and insists on this," an unnamed Oil Ministry official told Iran's state news agency IRNA on Tuesday.
Rising global share
OPEC said a year ago its reserves increased in 2009 because of Venezuela. President Hugo Chavez's government said in January it had had overtaken Saudi Arabia as the world leader.
Venezuela's new deposits were booked in the South American country's Orinoco extra heavy crude belt.
The boost in Venezuela's figures helped OPEC attain a larger share of the global total. OPEC holds 81.3 percent of the world's proven crude reserves, up from 79.6 percent in 2009, the report said.
Saudi Arabia, by far OPEC's largest exporter, holds an advantage in that its oil is mostly light, conventional, easily-pumped crude. The Orinoco oil needs to be upgraded or mixed with a lighter grade to create an exportable blend.
Some countries such as Algeria, Kuwait and the United Arab Emirates had no change in their reserves in 2010 or in any year since 2006, the report said.
This trend has also given rise to doubts about the estimates, as analysts say it is unlikely new additions to reserves will exactly match production.
OPEC's 12 members pump more than a third of the world's oil. Several producers, including Saudi Arabia and Venezuela, have denied suggestions their reserves have been exaggerated.Senate Budget Chairman Kent Conrad said Thursday that it's impossible to enact the "Gang of Six" plan for spending cuts, a tax code overhaul and changes in benefit programs by the Aug. 2 default deadline, so a short-term extension of the debt limit is the most likely solution.
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Melina Mara | The Washington Post | Getty Images Kent Conrad |
The North Dakota Democrat, part of the so-called "Gang of Six" senators, said doing nothing is not an option.
"We're all going to have to do things we'd prefer in a perfect world not to have to do," he said.
Conrad's comments came after President Obama signaled Wednesday that he could support a short-term increase in the U.S. borrowing limit as long as it is part of a broader deficit reduction deal.
Obama previously promised to veto a short-term extension of the $14.3 trillion debt limit. But White House spokesman Jay Carney said in a written statement the president would consider an exception if congressional leaders look like they're getting close to a deal for a long-term debt limit extension with deficit reduction.
Conrad told MSNBC he believes 40 senators back his group's $3.7 trillion deficit-reduction proposal and a program of tax changes and revisions in the Social Security and Medicare programs.
"Our tax system is completely out of date," Conrad said in a separate interview on CNBC. "It’s anticompetitive, it's antigrowth, it's holding us back, it's hemorrhaging revenue. We can do a lot better than that. It’s going to take time."
In the CNBC interview, Conrad said the plan would cut the deficit by $3.7 trillion in 10 years, of which a $500 billion "downpayment" would come within six months. It would also raise $1 trillion in new revenue, repeal the Alternative Minimum Tax and lower tax rates besides making major changes to entitlements.
He conceded that some proposals are unpopular, but said "we're all going to have to do things we'd prefer in a perfect world not to have to do."
The bipartisan plan would target some of the most cherished tax breaks enjoyed by millions of families—those promoting health insurance, home ownership, charitable giving and retirement savings—in exchange for lowering overall tax rates for everyone.
Many taxpayers would face higher taxes—a total of at least $1.2 trillion over the next decade, and perhaps more.
The plan, released this week, punts on many of the most difficult issues, leaving it to congressional committees to fill in the details later.
But supporters say it provides a framework to simplify the tax code, making it easier for businesses and individuals to comply while eliminating incentives to game the system.
"I think this is an attempt to find a middle ground on taxes that emphasizes keeping rates low and broadening the base as much as possible, and I think that's a very positive aspect of it," said Eugene Steuerle, a former Treasury official who worked on the last tax reform package that passed Congress, in 1986.
The plan, released this week, punts on many of the most difficult issues, leaving it to congressional committees to fill in the details later?
A. TRUE
B. FALSE
B. FALSE
But supporters say it provides a framework to simplify the tax code, making it easier for businesses and individuals to comply while eliminating incentives to game the system?
A. TRUE
B. FALSE
B. FALSE
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