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Cramer: It's a Putin Windfall

NEW YORK (Real Money) -- Grrr! Why does all news have to be presented so negatively? Last week, Vladimir Putin may have done the single most positive thing he could do for the American consumers' wallet: He banned U.S. chicken imports. Immediately, the outpourings were negative. The Washington Post pointed out that the ban is "also starting to negatively affect a number of U.S. food industries," particularly chicken; we send $300 million in chickens to Russia every year.

The chicken industry? Is that the real ramification for something that is eaten by tens of millions of people in this country? The pain in the chicken farmer's budget?

This Putin-hurts-chicken-farmers story is a classic example of how a huge positive gets turned by the press into something dastardly. Do you know that ever since Putin put this through, the price of all of our foodstuffs have been in virtual freefall? Do you know that hog futures, which had been soaring not that long ago, are now tumbling the maximum amount allowed and are back to where they were March 18? Do you know that the stubbornly high price of cattle is now crashing, as a newfound, Putin-inspired chicken glut has made poultry too competitive? Two weeks ago, we thought cattle could only go up in price. No more.

It's a Putin windfall and we better start acknowledging it as such and not fret about the poor chicken farmer.

Must Read: John Browne: Europe Has Energy Options to Loosen Putin's Grip

We are now in the midst of a wholesale retreat in prices for virtually every commodity I follow, save cheese. Grains, hogs, cattle, poultry, they are all getting hammered. The building blocks of the American diet are tumbling down in price. Which brings me back to a bigger point: the impact of chicken on Fed policy and the ideologues who bash the Fed out of anger or profit. 

Think back to June 18, when Janet Yellen said that inflation was on the high side but it was a little "noisy." The bond market intelligentsia -- who has forever favored higher interest rates even as the economy was dying on the vine -- immediately lambasted her for being naive and unwilling to admit that inflation had gotten not just troublesome but on the verge of running away.

What has happened since then? How about declines in just about everything that goes into the end price at the supermarket? Plus, this wholesale retreat -- which is really the level it is happening at for now -- is occurring simultaneously with a most unexpected decline in gasoline despite the summer driving season and geopolitical turmoil. That's how big the U.S.-created worldwide glut really is.

How about the big decline in natural gas which, right now, is lowering that air conditioning bill? How about the very big slowdown in the rate of home price increases we caught in yesterday's figures? How about a decline in mortgage prices we are getting with this relentless bond price increase?

Looks like Fed Chair Yellen nailed it perfectly with that "noisy" comment about inflation, even though she surely wasn't counting on the help that Putin gave her. She gets no credit for being right, of course, because she is considered soft on inflation and therefore a real lightweight.

I have been building a thesis that a decline in inflation isn't being taken into account positively enough by the stock market. I have been suggesting that when the price of gasoline goes down as it has while rates have come down and purchasing power increases, it means more money for the consumer to spend. But now I am realizing that I am thinking too small. The whole commodity-consuming industry, the consumer packaged goods business, is now beginning to get a windfall.

It may not be able to offset the rising dollar, but it's powerful and it's real and Putin just gave us the last piece of a very positive new puzzle. Numbers will soon be going higher, not lower for the commodity consumers at the corporate and the individual level. Chicken farmers? Sure, they may be hurting. The rest of us? It's all good.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the securities mentioned.

Editor's Note: This article was originally published at 6:30 a.m. EDT on Real Money on Aug. 13.

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