Cramer: New threat looming in new quarter?

(Click for video linked to a searchable transcript of this Mad Money segment)

As investors prepare for the third quarter, Jim Cramer is hearing chatter of a new threat.

It's inflation.

"That's what we're supposed to be worried about. There's big concern," he said. "There's inflation in beef, chicken, cheese, coffee, milk, pork, dairy, almonds, limes, avocados and more."

In part, those higher prices stem from the drought conditions in California, as well as Texas and Oklahoma. And, as serious as the specific circumstances may be, the "Mad Money" host has a hard time believing that inflation, broadly, threatens the stock market.

"I don't mean to sound cruel, but people will trade down and avoid the most inflated areas of commodities, at least until the weather cycle changes," Cramer noted.

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Therefore, Cramer believes making investment decisions based on inflation as a broad market catalyst is probably misguided.

In defense of his outlook, Cramer said this wasn't the first time that the market has encountered a spike in commodity prices. And despite dire predictions, in the past, they haven't triggered high prices of any lasting consequence.

"It was only a few years ago that corn, the backbone of the food chain, went through the roof," Cramer said. That was supposed to be a game changer. "But ultimately, the weather improved and the price of corn dropped sharply, in the very next season. I believe the same thing will happen again to these other commodities. Limes? Already peaked. Same with coffee."

And, Cramer added that other gauges, which measure inflation broadly, are few and far between. "For example, there is little to no labor inflation," Cramer added.

Also, he said, even where there is inflation, oftentimes the higher costs are not passed along to consumers. "Markets such as Whole Foods have to keep prices low to compete. The same is happening at restaurants. They are eating these costs for the most part with the exception of a penny here and a penny there."

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All told, Cramer thinks anyone who's worried about inflation taking down the market, has got the situation all wrong. Although he concedes that commodity inflation may have short-term impact on specific stocks, that should be the worst of it.

Fed Chief Janet Yellen has characterized inflation data as noisy. "I think that's a pretty good way to look at it," Cramer said.

Call Cramer: 1-800-743-CNBC

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