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To avoid Japanese-style deflation, Cramer said the Federal Reserve chairman's plan is two-fold: get money back into equities, especially in growth and high-yielding stocks, and send the stock market back up so that people will start spending again.
Ben Bernanke is doing his best to send stocks higher, Cramer said Tuesday, because it's the one way he can prevent the US economy from falling into an elongated period of economic stagnation, like Japan had in the 1990s.
Gee, I didn't realize that what was wrong with the economy was that all the people I see in the street weren't spending because their stocks had been lower, and equities were constrained, and they were too worried about Japanese stagflation to buy a home theatre projection system.
Funny, I thought the problem was that a generation of increasing real estate values based on cheaper and cheaper mortgage attainabilities, and more and more unqualified people chasing limited real estate, created a wealth bubble, while at first assembly line positions went overseas to cheap labor, and now hi tech, development, IT and lab level positions followed, until when the real estate dam burst, there were only a few low paying service jobs left, and the unemployment being by now systemic, no one had any confidence to spend until full employment would be attained in a marketplace devoid of good jobs.
But what do I know?
Bernanke had better not be thinking along the lines Cramer is. He had better be considering the death spiral of deflation because he is making a civilizational bet.
We need to bring back industry, R&D, engineering and labor, and we need to invent new industries which WILL REMAIN HERE PAST INVENTION.
If that means, sooner or later a trade / currency or other 'war', well then.... IT'S OUR CHILDREN'S FUTURE AND THEIRS WE'RE AT RISK FOR.
We hold the baton.
Who's for worrying about the employment in Tolucca?
