Japan wants in. The creators of the Jack-and-the-Beanstalk magic stock growing beans are back and playing it our way: stock splits,

B2B, wireless -- Japan is taking a page from our book, or we are taking one from Japan's 1986 to 1989 playbook. It is so wacky anymore, who knows?

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And so, the inevitable comparisons between the 1980s run-up in Japan and our own

NDX

ramp start anew. I know, if you please all, you please none, so I have studiously avoided the big bear case. But let me break precedent and tell you what happens if we have another year like this one next year. Three things will happen to the U.S. economy that will be bad for the long-term:

Everyone with a hint of rationality will margin to the moon because the returns are so great.

Everybody who works at a dot-com will be able to outbid everybody else for anything, causing terrible inflation.

There will be days where stocks will drop so far and so fast that people will rue the day they owned them as the spigot will have been turned off too late to avoid a Nikkei-like tumble.

So why tempt fate? Why bother to be long at all? Because it doesn't have to end like this. If the

Fed

takes steps to cut off margin and stop fueling leveraged trading, then we can avoid a Nikkei run. We can cool things off. Yes, they need cooling off. We need to make the market functional again. (And yes, I regard moves such as

Commerce One

(CMRC)

to be a sign of dysfunction, not function.)

As a trader, I am happy in any environment. But as an investor, I would hate to see all our markets reach heights that make a Japan inevitable. Fortunately, the Fed has studied Japan. The Fed knows that easy money and easy credit was behind the run in the Nikkei that ultimately destroyed that country's economic engine. I am rooting for the Fed to cool things off to save this market from its own dysfunction. It is my job to profit from it either way. But it would make my job a heck of a lot easier in the out years if the Fed acted before the NDX went up another 100%.

Oh yeah, and if the Fed doesn't do something to tighten margin or make it more difficult to buy stocks with credit, I think the odds favor exactly that kind of move.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. Cramer's fund also may be long or short certain stocks in his B2B rotisserie league or Red Hot index. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.