William McChesney Martin Jr., the revered former head of the U.S. Federal Reserve, is remembered for many things - including an unprecedented term as chairman that lasted from March 1951 to January 1970.
But Martin is perhaps best remembered for the central-banking aphorism that says that the Fed's most important job is "to take away the punch bowl just as the party gets going." (See accompanying graphic below.)
We'll have to wait until June 30 to see if current Fed Chairman Ben S. Bernanke brings down the curtain on "QE2" - the quantitative-easing bash that he spiked with $600 billion worth of economically inebriating liquidity.
Before that happens, however, we may discover that recent interest-rate increases by central bankers elsewhere in the world will act as sobering cold-water bracers that end up crashing the global-growth party a lot sooner than Bernanke & Co. desire.
To understand how foreign central banks could end the bull market, please read on...