"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.
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, PleaseCramer 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.