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Cramer: Deceptive bubble forming in the market

(Click for video linked to a searchable transcript of this Mad Money segment)

With the market sitting at or near all-time highs for most of the year, Cramer says investors have to consider the potential of a bubble.

Nothing less would be prudent.

Few people can argue that the Fed hasn't created some kind of bubble. The bond buying program has pushed bond rates to historic lows, which in turn has forced investors to buy stocks if only for yield.

Without question, the environment has been engineered.

"The Fed has also made capital so cheap that companies can afford to buy back their own stock, which can radically inflate the earnings per shares," Cramer added.

It's perfectly reasonable to conclude that there's a bubble in the market. The thing is, bubbles are only dangerous if they pop.

Siegfried Layda | Getty Images

And no matter how big of a bubble the Fed may create, Cramer doesn't think it poses any significant threat for investors.

That's because with Janet Yellen's confirmation hearing getting underway on Thursday, Cramer feels confident that policies implement by Ben Bernanke won't change much.

"That's the real point here," Cramer said. "It's steady as she goes."

In other words, If the Federal Reserve continues to backstop the economy in the same way, there shouldn't be much if any collateral damage from the policies it's implementing.

"If anything there will only be collateral positives," Cramer said. "The Fed's easy policies allow people to buy more cars and more homes. It also drives stocks which makes people feel wealthy. And indirectly in sparks purchases of all shapes and sizes.

Ultimately the end result is bullish for the economy and therefore bullish for the stock market. Therefore, Cramer believes if and when the Fed inevitably tapers, the economy will be able to support stocks at or near their current levels.

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All things considered, Cramer believes the stock market remains an attractive investment, bubble or not.

"If there is a Fed induced bubble, and I'm not sure there is, but if there is, we got a lot of certainty from Janet Yellen that it's here to stay. A bubble is something that isn't dangerous, per se, as long as you know that the bubble's not going away any time soon."

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