Cramer couldn’t believe the stock market didn’t crash Tuesday.
After all, President Obama's Democrats and their Republican rivals were further apart than ever in an impasse over America's debt limit as Wall Street braced for a looming U.S. default and credit downgrade.
One week before a deadline to act, the two sides pursued competing plans to raise the debt ceiling that appeared to have little chance of winning broad congressional approval.
There was no compromise in sight to raise the nation's $14.3 trillion debt ceiling by August 2 to avert a default that could trigger global financial chaos. Cramer thinks there’s a 50-50 chance political leaders will ultimately come to an agreement before time is up. What happens if we don’t get a deal, though?
At first, Cramer expects everything but gold to go down. He wouldn’t get out of the stock market, though, because shortly after the checks stop going out, lawmakers will figure it out. So instead of this being a 12-alarm fire, Cramer thinks a shutdown may be nothing more than water and smoke damage.
Getting out of stocks would be a mistake, Cramer said, because it’s the best asset class that would most likely be the least impacted by the shutdown. Strong companies will continue to be strong despite Washington’s shenanigans, he said. Of course, Cramer would avoid the bank stocks, but stocks like Apple , Caterpillar and Google remain buys.
For investors looking for an insurance policy, Cramer recommends owning gold — gold coins, gold bullion or the SPDR Gold Shares exchange-traded fund.
So what’s the bottom line?
“I figure it a bit of rough seas, but we will tough it out and get back on course, as we always do, as we have ever since 1776,” Cramer said. “I simply refuse to join the President in yelling, ‘Nation overboard!’
“I am staying on the ship,” he added. “You should, too.”
When this story was published, Cramer’s charitable trust owned Apple and Caterpillar.
Reuters contributed to this report
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