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When large institutions are deciding whether to put their money to work or not, they like to have a top-down view before they pick their stocks, said Jim Cramer on his

"RealMoney" radio show Wednesday.

Once they have their world view, they know what stocks to pick.

There are three camps of investing, he said. First, there is the hard-landing theory, in which people believe that the

Federal Reserve

will take interest rates too high, which will cause inflation.

Second, there is the soft-landing thesis, according to which people believe that the Fed will gently raise rates until the economy cools -- and once it cools, the Fed will be finished raising rates, Cramer said.

In this scenario, the earnings in the economy are not destroyed, and a recession does not result.

The third camp has emerged since Monday, Cramer said. In this camp, there is a slowing in the economy, but a speed-up in inflation.

In the hard- and soft-landing theories there is no speed-up of inflation, just a diminution of it, Cramer said.

"I want to disagree with the third theory,

also known as the stagflation theory," Cramer said. "Because the only thing that works in the third camp is gold."

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On May 12, gold hit $730; today it is at $630, Cramer said. This tells me the Fed is wrong, because in stagflation, gold should be going higher.

Right now the banks are moving up, Cramer said. This happens in a soft landing. If we were going through or nearing a recession, the banks would be near default.

"Today, things are not that bad," Cramer said. "But it changes everyday. I don't want to get my hopes up."

To see the most recent edition of The RealMoney Radio Recap in its entirety, please click here. This recap is published every day around 3 p.m. ET.

Jim 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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