Bears, Do Not Read This

Bears, do not read this column. It will ruin your weekend. Because this is a column about how the Federal Reserve can now ease at will if it wants to because inflation and housing values and employment are plummeting so fast and the dollar is so strong that they have room to move down if they want to.

This week's rally is a celebration rally that the world's tightness against commodity inflation has succeeded in giving the Fed some room to cut more if it needs it to stem the housing and employment declines.

Mind you, the Fed does not need to use it. It just needs to have it. Until this week, any time the shorts went to work, short of when the government tied to limit their activities, there was no penalty. No takeovers. No private equity. Nothing. Just the sheer notion that stocks were overly shorted. No longs were the enemies, they were out of bullets. Only the shorts. As in too crowded.

Plus, the hedge funds were all pressing the commodities bet: why not, it was the only thing working.

Now, everything has changed. Oil could go down $5 a day and nobody would care. Our drivers won't pay north of $3.50 a gallon. We found the level.

So, that gives the Fed the ability to cut if it needs it because otherwise, knowing the way these commodity markets work, the dollar will now rally to the point where it doesn't help us.

Just like that.

I told you bears not to read this.

Now, before the "rigorous" people who believe "he knows nothing" speak, let me tell you that I don't believe the fed will ease.

It doesn't matter, though. The fact that it can, the fact that it can now take the short rates to 1% allows the big deposit banks a chance to refinance and build capital. That does the trick and works us out over time.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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