The Fed better wake up! A rate increase is trouble

In 2007, Jim Cramer notoriously went on a wild rant against the Federal Reserve, claiming that "they know nothing!" His rant followed 17 straight interest rate hikes that ultimately led to the great recession, and Cramer could clearly see investors were playing with fire.

And while many laughed at the antics of the "Mad Money" host back then, sure enough the economy had a monstrous downturn. And here we are again—Cramer's ready to rant!

The economy is once again looking strong, and the hot topic of the day has become a question if the economy will overheat. Outgoing Dallas Fed President Richard Fisher has called for an immediate increase in rates.

"Right now, he couldn't be more wrong. In fact I would go so far as to say his call to action is dangerous if the Fed listens to him, and it could cause a tremendous downdraft, if not a bear market, in all worldwide equities, along with a dramatic decline in economic activity," Cramer said.

Richard Fisher, former president and CEO of the Federal Reserve Bank of Dallas.
Adam Jeffery | CNBC
Richard Fisher, former president and CEO of the Federal Reserve Bank of Dallas.

Now to be clear, Richard Fisher does make a lot of sense, on paper. Cramer can understand why he would call for rates to be raised, based solely on the domestic situation. But the U.S. economy isn't operating in a vacuum.

Import countries like Mexico and Brazil have such weak currency that they will certainly be crushed if rates were to rise. Additionally, Europeans are desperately trying to do anything in their power to devalue the euro just to get their economies moving.

"The turmoil out there is so palpable, the ongoing destruction so obvious to me that we might as well be back in August of 2007 when the Fed knew nothing about what was really happening," said the "Mad Money" host.

Cramer wouldn't be surprised if rising rates caused the collapse of countries in Latin America and epidemically spread around the globe—it could be catastrophic and take down the U.S., too.

Plus, where is the emergency? Why does this rate hike have to happen right now at a time with low inflation in the U.S.?

The good news is that Fisher is not a voting member, and fortunately, Cramer sees that Fed Vice Chairman Stanley Fischer has a good grasp on reality. Fischer understands how fragile things are right now, especially in Brazil which has billions in U.S. denominated debt.

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Cramer's ultimate hope is that the Fed will allow Fischer's view to trump Fisher's.

"If the Fed wants to show us that it knows something this time, and not nothing like the last time, then it should let Stanley Fischer's hand stay steady on the tiller while wishing Richard Fisher well in his coming retirement," Cramer said.

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