First you'll add 1/2 cup white sugar and 2 Tbsp of water into a sauce pan. Heating on medium heat, you want it to get violently bubbly just like this. Do not stir it.
Since what we're doing is burning the sugar, you want to let it get kind of an amber color. At this point, you can gently swirl the sugar around in the pot. Then, go ahead and take it off the heat.
If it gets this dark, throw it out and start over. You heard me. I went through with it and it was bitter and completely ruined. Just play it safe and stick with the lightly burnt sugar.
When you take the sugar off the heat, whisk in 3 Tbsp of butter and 1/2 cup of heavy cream. Yes, heavy cream [not milk]. Whisk it until it's all disolved.
Smooth, right? It's thin, but it will thicken as it sets. A couple of important hints: First, make sure you have all the ingredients ready before you start making it. Once the sugar starts to turn golden, it will all happen pretty fast. Another helpful thing to do is warm the cream for 20 seconds or so in the microwave so that it doesn't seize when it hits the boiling sugar.
Now...what should you do with this caramel? You can put it in a nice jar, tie it with a ribbon, and give it as a gift. Put it on ice cream or cheesecake. I like to add it in my hot chocolate for a much cheaper version of Starbucks' salted caramel cocoa. Or, you can do this [my favorite Christmas cookie]:
Shortbread cookies topped with caramel and sea salt. Oh. my. stars.
Before you put the shortbread cookies in the oven, poke a pretty deep hole in them. You may have to mold the sides a little because shortbread is pretty delicate, but it's worth it. As soon as the come out of the oven, use the end of a spatula to form the holes more cleanly. Then fill with caramel and 3 or 4 granules of sea salt.
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