Jim Cramer knows that no one wants to hear this, but we are China. It's true.
When Cramer got up at 4 a.m. on Monday the Chinese market was down 8 percent, a true crash, and the S&P 500 futures were flat. Sure enough, when investors woke up the futures were smashed, down 0.6 percent.
Some say that Cramer's theory is completely ridiculous; they think that the U.S. has nothing to do with China. They believe that our markets are not linked because when the Shanghai Stock Exchange Composite Index nearly doubled from November to June, the U.S. market did not double along with it.
So, why the heck would we be affected now that the Shanghai composite has fallen to 3,726 from from 5,191?
"The answer? Simple: because in a world where there is very little growth, we need every country to do its part to get the global economy expanding, and the stock market complex in China is doing the exact opposite," the "Mad Money" host said.
Plus, the "floor" of support in China is completely false. The Chinese government has taken desperate measures to prop up its market, such as the 1,400 stocks that were suspended, stocks that have stopped trading, new IPOs that have been cancelled and the banning of all short-selling.
It's just plain lunacy to Cramer that the Chinese market could still be up 15 percent for the year, let alone stand on its own two feet.
So, why should investors in the U.S. care?
First, there is a huge number of large American companies that export to China. Second, because it is now widely known that the Chinese communist government is not as shrewd or masterful as once thought. And third, because the U.S. market is always held hostage by futures trading, which tends to be a reaction to whatever bad is happening overseas.
Some might think that is silly, but it's a fact of life for Cramer.