Stocks closed lower on Wall Street on Monday, and to Jim Cramer this was a perfect example as to why he has been against the Federal Reserve raising interest rates. During his long career on Wall Street, Cramer has seen the first stages of a rate hike and knows it is not good for stocks.
"Stocks in a ton of industries go down, even as a few go higher, which is exactly what we saw today," the "Mad Money" host explained.
And while Cramer is against the rate hike, he does accept its inevitability. Low rates cannot last forever, even if they are good for the stock market for the duration.
Eventually, too much money would chase too few goods, and that would trigger inflation. The Fed has two mandates. First is to promote an environment for a flourishing economy. Second is to do so without igniting inflation, which could create a situation with people who cannot keep up with the rising price of goods.
The most important ramification Cramer expects is for the dollar to soar. That will cause exports of U.S. companies to decline dramatically versus overseas competition. That could prompt big layoffs for manufacturers that cannot keep up.