Booyah Breakdown: The Wimpy Greenback

Jim Cramer often says that the weak dollar makes a company's good numbers look even better.

For example, in his April 17 blog, he said that part of the reason that Coke (KO Quote - Cramer on KO - Stock Picks), Merck (MRK Quote - Cramer on MRK - Stock Picks), Johnson & Johnson (JNJ Quote - Cramer on JNJ - Stock Picks) and McDonald's (MCD Quote - Cramer on MCD - Stock Picks) did so well this quarter was because of the weak dollar.

What does that mean? Does it get sand kicked in its face at the beach? And why is the dollar weak? (Obviously it has nothing to do with lack of sleep, vitamins or red meat, which is clearly my excuse.)

Today, the Booyah Breakdown is going to tackle the conundrum of anthropomorphizing the greenback. So pull out your cardigan and beanie because we're going back to Economics 101.

Why does the value of the dollar change?

Perception is the key. If the U.S. is perceived to be a thriving economy, the dollar is a wanted commodity. It's like anything else. If Paris Hilton shows up at some hot nightclub, it is perceived to be the place to be and the owners can charge top-dollar for admission.

But if other countries view our economy as struggling, then the value of the dollar falls, which seems to be the case these days. The U.S. is not perceived as the strongest place on the planet.

With the troubled housing market, the recent unimpressive producer price index and consumer price index numbers, the U.S. economy is seen as softening by our overseas compatriots, says Brad Sorensen, the head sector analyst at Schwab's Center for Investment Research.

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