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Jim Cramer's 'Mad Money' Recap: Who Needs the Fed When U.S. Has Growth and Profits?

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NEW YORK ( TheStreet) -- The Federal Reserve isn't the deciding factor in our stock market anymore, Jim Cramer told his Mad Money viewers Tuesday. The deciding factors are growth and profits, and the U.S. has them in spades while everyone else doesn't.

Cramer said today's news U.S. GDP grew by 3.9%, the fastest back-to-back quarters in over three years, is proof the market's rally is backed by higher corporate profits and the fact that consumers feel wealthier, more secure and more confident.

Must Read: 10 Stocks George Soros Is Buying

All that wealth and confidence is great news for the economy, Cramer continued. It means more homes being built, more businesses being started and more people being hired. It also means the market's rally is self-sustaining despite the bears who have been saying for years that all would be lost once the Fed stopped its bond buying.

But for as good as things are here in the U.S., they're not that good overseas. That means international money continues to flow into stocks like Apple (AAPL) , a stock Cramer owns for his charitable trust, Action Alerts PLUS, because Apple still only trades at 15 times earnings even though shares are up 47% for the year.

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Mark Sebastian over the chart of CBOE Volatility Index  (VIX.X)  to see what it might be telling us about the direction of the overall markets.

Sebastian noted that while the VIX remains at historically low levels and all of the volatility from a few weeks ago has vanished, the VIX still trades nearly two points higher than it did in June and July -- the last time the markets marched higher.

So why is there more fear now than over the summer? Sebastian felt that investors must still be worried an interest rate hike may be coming in mid-2015. But that's not going to happen, according to Sebastian. The dollar remains at multi-year highs while commodities from oil to corn to soy are at multi-year lows.

While top-line unemployment may be falling, the underlying metrics show many workers are only working part-time, leading to a total lack of wage inflation.

Sebastian felt the increase in the VIX is simply the markets lagging the latest thinking on interest rates. Once the market realizes rate hikes are not on the horizon, the VIX will fall, sending stocks even higher.

Cramer said he agreed with Sebastian's analysis.

Must Read: Why the U.S. Economy Is So Much Stronger Than Anyone Expected

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