Cramer's 'Mad Money' Recap: Profiting From the Reflation Trade

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"Inflation's back and better than ever," Jim Cramer told the viewers of his "Mad Money" TV show Friday.

He said when the government prints money like there's no tomorrow, some companies will actually prosper.

Cramer said that after the second worst deflationary death spiral since the Great Depression, signs of inflation are a comforting sign. He said Federal Reserve chairman Ben Bernanke's steps to re-inflate the economy by weakening the dollar is a welcome sign for companies that do the majority of their business overseas.

Cramer said the strong dollar has been hurting companies like Heinz ( HNZ), which went from double-digit gains to shortfalls and earnings misses, almost overnight, due largely to currency translations. But now, companies like Heinz can once again prosper as the dollar weakens.

Other companies benefiting from the weaker dollar include Coca-Cola ( KO) and McDonald's ( MCD), said Cramer.

Gold is another area that will benefit from a weaker dollar. Cramer said while Agnico-Eagle Mines ( AEM) is now too high, up 19% in 2 days, other gold stocks, like Eldorado Mines ( EGO) is still a buy.

In the oil patch Cramer likes BP ( BP), a stock which he owns for his charitable trust, Action Alerts PLUS .

Take Some Profits

"What do we do now?" That's a question many investors are asking after the huge market rally and today's quick decline. Cramer's answer: Take some profits and spend a little time on the sidelines.

Cramer said while there are a lot of positives in the market, there is also still a lot of risk. He said today's decline was for real and could continue through the end of month, as investors take profits from their recent gains. Cramer said he's starting to feel greedy, which is why a little profit taking seems in order.

Why be cautious? According to Cramer, the S&P oscillator he uses to judge where the markets has swung to a dangerously high overbought condition. While the glass may seem half full, he said, it's also still half empty.

With market pundits worried about inflation, and increasing rhetoric surrounding AIG ( AIG), it's more than possible the markets could continue to pull back, said Cramer.

More Time, Please

Cramer welcomed Gale Klappa, president and CEO of Wisconsin Energy ( WEC), to the show to discuss the realities of clean coal technologies in light of a recent Wall Street Journal article that said the technology is still not viable.

Klappa said that the article is accurate in its portrayal of clean coal, and that by his estimations it may take another 10 to 12 years before there is widespread use of the technology.

That said, Klappa noted that the air in the U.S. is cleaner than its ever been in the last 50 years. With 50% of the country's electricity currently being generated from coal, Klappa said it's clear that the country is already burning coal cleanly.

The issue, said Klappa, is carbon dioxide, which was never considered a pollutant until now. He said Obama's cap-and-trade program as written would create a huge burden on consumers, raising electricity rates by 40% to 56%. Klappa said what's missing from the plan is time for utilities to retool to cleaner technologies.

Outrage of the Day

Cramer said he wants everything that went wrong in our financial system investigated and everyone responsible put in jail but he said Congress shouldn't be doing it.

Cramer said the markets need a serious investigation and real reform, not political posturing. He said if Obama is serious about fixing the problems, he needs to appoint an independent commission with subpoena power and get the job done right.

"We need action," said Cramer, and not Congress voting on the bonuses handed out by AIG ( AIG).

Lightning Round

Cramer was bullish on Taiwan Semiconductor ( TSM), Xilinx ( XLNX), Hershey Foods ( HSY) and CBS Corp ( CBS).

He was bearish on TCF Financial ( TCB), Seagate Technology ( STX) and Dr Pepper Snapple ( DPS).

Check out the latest edition of "Cramer's Take on Top-Searched Stocks" on Stockpickr.

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

For "Mad Money" performance statistics and other links, check out Mad Money stats
At the time of publication, Cramer was long BP.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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