I hate to disagree with Jim Cramer on
anything (outside of Sports), but I believe he is incorrect
about the Fed regarding the jobs data.
The present bout of inflation is not being caused by wage pressure, tight
labor market, or even monetary conditions — and those are the items that
typically cause the kind of inflation the Fed can respond to. This time, a
combination of overseas demand for commodities is what has been driving prices
higher. Add to that a few isolated and unique sectors domestically: Health care
costs have exploded, education is much higher, gasoline has risen.
Except for Real Estate — obviously up in response to ultra-low rates — how
does Sir Alan plan to cool global demand? The really scary part to me is that I
have no idea what the Fed can do to about a robust China, Korea, Singapore,
India, Taiwan and maybe even Japan or Europe. I think the Fed is in a box of
their own making . . .