It was just about one year ago that Jim Cramer made a fool of himself on that now famous CNBC segment. Unfortunately for this country, Ben Bernanke, who was holding strong on interest rates prior to that video, went on a rate cut rampage afterwards, sending inflation through the roof in the process. Here is a chart of the Fed fund rates with the timeframe of Cramer’s idiotic blowup highlighted:

Alan Greenspan described in his book The Age of Turbulence that he often was disappointed when Reagan tried to pressure him into lowering rates. For the most part, Greenspan stood his ground and acted with his independent authority as chairman of the Fed. Unfortunately his independent nature became reckless starting near the end of 2001 when he started his quest to create the largest bubble (Hint: housing) in the history of the world, by jacking down short term interest rates to 1%.

Bernanke, on the other hand, held his ground against the influences of imbecile clowns on television (Hint: Jim Cramer) at the beginning of his term. But as pressures mounted, he caved in with a Greenspan like show of aggressive rate cutting to satisfy Wall Street. As the rest of the world stays busy fighting inflation with responsible central banking policies, Bernanke is foolishly attempting to keep the irrationally high housing prices going a little bit longer. But it is a dangerous tightrope we are walking and it could very well bankrupt our nation in the process. Foreign investors are getting nervous about the sanity of their decisions to buy U.S. treasury bonds at such low interest rates, especially in light of continued record deficits in the United States that will hamper our ability to meet the pay back promises of those treasuries. The responsible fed action is to let the housing slump run its course, stand firm on inflation, and strengthen the U.S. dollar, all of which could gain momentum with a modest quarter point interest rate rise. The actual action from the Federal Open Market Committee yesterday was to hold rates steady at 2%, and HOPE for the best.

For related reading: