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Cramer: European Debt Crisis to Linger

Get used to the European debt crisis because it's not likely to go away anytime soon, Cramer said Tuesday.

"This crisis will loom for years and years and years unless Europe takes the hit, their banking system absorbs it, and the euro gets blasted into smithereens," Cramer said, adding that European countries are clinging to the euro as a way to prevent future wars and conflict. "But we all know this will happen."

After all, it seems the International Monetary Fund will force actions that European governments will find difficult to accept, Cramer said. As it stands now, Cramer thinks these governments aren't cooperating. Until Europe's larger countries accept the severity of the debt crisis, Cramer isn't sure any tough steps will be taken.

Cramer said "bond vigilantes" are in control of the bond auctions in weaker, indebted countries, like Portugal and Ireland. The group is so powerful, he isn't sure the euro will hold together. But Cramer doesn't think the poorer European countries, including Portugal, Spain, Ireland and Greece, can afford to stay in the euro.

"If they had their own currencies, they could devalue their way out of debt and attract new foreign investment," Cramer explained. "But as long as they’re stuck on the same currency as France and Germany, all they can do is make huge, painful cuts to government spending."

Europe's debt crisis matters because it's holding the U.S. markets hostage, Cramer said. America's fiscal house is so out of order that we're apart of these European debt troubles, Cramer explained. It's not that the U.S. dollar is strong, but that the euro has weakened.

To fix this problem, Cramer thinks Europe needs to create a two-class system of currencies. After all, he thinks keeping the euro together is doing a lot more harm than good. Cramer said Europe will eventually sort this out, but until then, get used to the ominous headlines.

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