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Cramer: Retail Investors, Don’t Misjudge the Market

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Despite signs that the US economy is challenged, the stock market just keeps going up. Something's not copasetic, right?

That's the conventional wisdom, at least. If you're a retail investor it would seem like a reasonable conclusion.

After all, few things are more important to the health of our economy than jobs and the latest jobs data released Friday was, in a word, dismal.

The economy created a paltry 88,000 jobs and although the unemployment rate fell, the Street considered it a negative development reflecting that fact that 500,000 Americans left the labor force.

Time to cash out – no?

Jim Cramer doesn't think so – in fact he thinks gains make all the sense in the world. And he's worried that individual investors may overlook the tailwinds in the market - and they may be significant.

"You have to look at what's happening overseas," insisted the Mad Money host. If you don't, you're likely to misjudge the stock market and assume the rally is out of steam.

Looking at Europe, Cramer thinks the wealthy have a new reason to take their money and park it someplace else. And that reason is Cyrpus. To secure a bailout, Cyprus forced heavy losses on its wealthiest depositors.

"Would you really keep your money deposited in banks that, perhaps tomorrow, the European Union might say should not be insured," said Cramer.

Therefore, the Mad Money host thinks it's perfectly reasonable to expect European money to come here – to the US. "If you are a wealthy European, all you have to do is wire the money into a U.S. bank. At this point, it's just foolhardy to keep your money there," Cramer said.

Thomas Barwick | Stone| Getty Images

Turning attention to China, Cramer sees another reason for the US stock market go gain. China is facing record high inflation.

"I think China is struggling and if I lived there I would fear unrest," he said. Because parts of China are so very poor inflation can leave the working poor unable to afford staples such as food. Historically, hungry people rise up. "If I could get my money out of China and put it here, I would," said Cramer.

"Finally, there's Japan," said Cramer. The Mad Money host doesn't think Americans realize just how aggressive Tokyo has become in its attempt to fight deflation.

"The government there has decided that it's going to print yen more aggressively than I have ever seen a developed country inflate in all my life," Cramer said.

"In addition, the government is buying securities including ETFs. Can you imagine if the Fed decided to buy our ETFs? Can you imagine Ben Bernanke saying today we bought the RTH, get those retailers moving? How crazy would that be? But that's what's happening in Japan," Cramer said.

Again, another reason for money to rotate into the US market.

"I can't imagine a rich person wanting to keep his money in yen if the central bank is embracing inflation that aggressively."

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All told, Cramer said it's likely that these are the catalysts driving the US stock market. That is, money is flowing out of Europe, China and Japan and into the US.

"I think American investors don't understand this – that foreign money is driving stocks higher. There's a wave of it flooding our markets every day. I say don't get out of the water, surf it, the tide's going our way!"

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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