Jim Cramer's Best Blogs

NEW YORK (TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

• the type of stocks you should buy in the current economic environment.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

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Stocks to Own in a Deflationary Economy

Posted at 9:58 a.m. EDT on Friday, July 6

The 30-year at 2.6%? That's crazy. It signals deflation on an order that seems out of synch with the reality of the situation where we have more cash at the corporate level and the individual level than we know what to do with.

We should be borrowing like mad in this country to do projects, but no one seems to have enough interest in doing projects that there is any demand. We should be buying homes like crazy with these rates and buying apartments hand over fist in order to be able to get some income, but it doesn't seem like people are doing that either.

The government should be borrowing hundreds of billions of dollars at this rate so it has all the liquidity it will need if the economy runs out of gas and the bond vigilantes come here. And while I never advocate margin, it seems pretty straightforward that it is worth borrowing money to buy higher-yielding stocks.

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We are at a totally nutty moment where, if we created, say, 25,000 more jobs in this big country, it would have been reasonable to expect rates not to go down like this, but the market's judgment has been made up: President Obama is not going to do anything big -- or won't be allowed to do anything big -- to create jobs between now and the election, and that in itself will produce the deflation that Federal Reserve Chairman Ben Bernanke is so worried about but seems hopeless to prevent.

The only sector that has been consistently adding jobs is oil and gas, but because we have no program to use it, the jobs are going away.

Remember, though, that with this job deflation comes commodity deflation that will only be good news for the General Mills (GIS) and Krafts (KFT) of the world.

The weakness is a definitive buying opportunity for all of these kinds of stocks.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long GIS and KFT.

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