Perpetual Accomodation

Noland:

"There should be little dispute regarding the acute global vulnerabilities associated with the leveraged U.S. homeowner here at home and highly leveraged and speculative markets here and across the globe. Yet there is a fine line between vulnerabilities that restrain risk-taking and those systemic vulnerabilities that keep timid central bankers adverse to the risk of taking away the punchbowl. As we are witnessing yet again, the danger of central bankers accommodating a long period of Credit and speculative excess is that the associated fragility will only entrap them in perpetual accommodation."