RealMoney Radio Recap: The Fed's Fast Break

"The Federal Reserve is conducting a scorched-earth policy to kill economic activity," Jim Cramer said on his "RealMoney" radio show Wednesday.

That is causing the market to act in a "schizophrenic" manner, he said.

Today, stocks moved up as a result of new data showing that orders for durable goods had decreased. But when new-home sales data showed an increase in economic activity, the market moved down, said Cramer.

Cramer believes that sort of "counterintuitive" market behavior is going to continue.

"The market will go down each time we see commodity prices go up," he said, adding that high copper prices are causing a headache for Fed policymakers.

Higher commodity prices may feed into higher consumer price levels, thus stoking inflation, Cramer said.

Despite the fact that the world has been awash with copper for pretty much the last 25 years, he said, there simply isn't enough of the metal in the world right now to feed global industrial demand -- most notably from China.

"Since the Fed can't create copper, what it is going to do is to reduce economic activity," Cramer said.

Whenever the Federal Reserve thinks the economy is growing too quickly, there is a risk that policymakers will put the brakes on and increase interest rates.

"Imagine a car on the highway that's going too fast," Cramer said. It will get pulled over.

Healthy Cynicism?

"As much as I tell you what I did see, let me tell you what I didn't see," said Cramer.

He drew attention to the proliferation of press stories about executive compensation and how new revelations blindsided him.

It seems that a number of public companies are being investigated by the Justice Department, he said, adding that it is a much more serious matter than being quizzed by the Securities and Exchange Commission.

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