Thanks for that post. In theory I can see how they could cut rates now. So in essence the FED won’t actually be adding liquidity to the system rather than slowing down the money contraction of the private banks. If dollars are still being destroyed in the credit contraction in lieu of rate cuts then the value of the Dollar will hold because there are fewer of them. So putting Cramer in context here, being the mouth piece of his hedge fund and investment bank buddies, he is saying the credit contraction taking place is now getting out of control. The third and possibly fourth Bear Stearns hedge fund blow ups and the belly flop of AHM this week acted as the catalyst for his psychotic rant yesterday. I imagine there is some very large ugly blow ups simmering under the surface right now getting ready to pop up. I also imagine most central banks across the globe are saying good riddance to this excess liquidity and the pesky inflation (possibly hyper-inflation) threat but are sitting on pins and needles to avoid a global systemic shock in the credit markets. From my very limited view there is little margin for error here. We do live in interesting times.
