RealMoney Radio: The Fed's Fast Brake

Cramer says that when the Fed thinks the economy is growing too quickly, it can grind it to a halt.
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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, Cramer said.

Today stocks moved up as a result of new data showing that orders for durable goods had decreased. But when new homes 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 policy makers.

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, Cramer said, right now there simply isn't enough of the metal in the world 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 policy makers 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.

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James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, 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

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