Cramer's 'Mad Money' Recap: Why the Gold Rally Is Good (Final)

Stock quotes in this article: CL , F , ADCT , WYNN , FWLT  

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NEW YORK (TheStreet) -- "Stop fearing high gold prices," was Jim Cramer's lesson to the viewers of his "Mad Money" TV show Wednesday.

He said that gold is no longer the barometer of global chaos, and the rally in gold, is actually a good thing.

Cramer said the bears, of course, always spin the rally in gold as a sign of pending doom for equities. But that's simply not the case, he said. Investors need to stop worrying about the rally in gold, and in fact, should embrace it. Cramer cited reasons why he believes a rally in gold is good for stocks.

Reason No. 1: A rally in gold means a falling dollar. Cramer said a falling dollar is fantastic for any company that exports its products. He said a weak dollar benefits construction equipment companies, aerospace firms and drug makers.

Reason No. 2: High gold prices means no deflation. Cramer said it was deflation that derailed the economy in the Great Depression, but that's just not possible now with gold continuing to rally.

Reason No. 3: High gold prices means reflation. Cramer said there's a big difference between reflation and inflation. While inflation is bad, reflation means companies are growing their earnings, which is exactly what Wall Street wants to see.

Of the many whys to invest in gold, Cramer again gave the nod to the SPDR Gold Trust (GLD) ETF.

He also added the Market Vectors Junior Gold Miners (GDXJ), a new gold ETF that focuses on the small to medium gold miners. He the new ETF gives investors a new opportunity to invest in the miners that still some room to grow.

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