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Mad Mail: What's the Link Between Oil and the Dollar?

Thursday, 29 May 2008 | 7:52 PM ET

Dear Jim: I saw you on the Today Show last Thursday morning talking about oil prices…you said that they are going up because there isn't enough oil to meet the demand of consumers. I was under the impression that our currency is just inflated because the Federal Reserve is printing money, which gives the appearance that oil prices are going up. There's a lot of misinformation out there. I'd love to hear your two cents. --Shannon

Cramer says: “This is a classic misdirection play. Some are akin to saying the speculators are driving up oil. In the end, the demand for oil is far greater than the supply…All that you really need to worry about with the declining dollar is that we have a bad budget deficit and a bad trade deficit, and the impact is a weaker dollar. It is not higher oil prices. That’s a marginal factor.”

Mad Mail
Mad Money host Jim Cramer answers your emails.

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Prof. C: I'm so glad that last Friday night I was one of the few Upper Eastsiders who weren't stuck in traffic on the Long Island Expressway, headed for a holiday weekend in the Hamptons. Why? Because I would have missed one of the most instructional shows I've ever viewed on TV. After a more than disappointing week in the market, your insight and encouragement were just what I needed. It's so hard to stay disciplined during "corrections," but with your strategies in mind, I've calmed down and can proceed with confidence while I turn my lemons into lemonade. --Elizabeth

Cramer says: “When I did my first trade, the Dow was at 1,300. It then went to 13,000. What I learned during that period – where there were many times when I should have been shaken out because of my nerves, where I believed that you had to leave, where I could have panicked. But in the end, to be crass about it, I made an awful lot of money following exactly the dictums and the precepts I put out on that show.”

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Dear Cramer: In your book Real Money, you wrote how a competitor can come in and dethrone an industry giant by selling a similar product even if it does so with a lower margin than the industry leader. Looking at the supermarket aisles from Wal-Mart to Vons, it seems that Dr. Pepper Snapple Group is employing the same strategy by selling carbonated soda at lower prices with lower margins than both its competitors, Pepsico and Coca-Cola. Is DPS a buy? --Francisco

Cramer says: “Wrong logic. Those companies are pure plays. Don’t think like that. It won’t make you money.”

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  Price   Change %Change
DPS
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KO
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PEP
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WMT
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