The quote refers to the detrimental effects of combining easy monetary policy with minimal regulatory oversight in financial markets. This mixture can lead to economic instability, as it encourages reckless behavior among financial institutions, resulting in crises that can severely impact society. The author's perspective highlights the importance of balancing monetary policies and regulations to prevent such explosive situations.

Joseph E. Stiglitz, in his book "The Great Divide: Unequal Societies and What We Can Do About Them," argues that the resulting economic disparities and crises are a direct outcome of these policies. The lack of oversight allows wealth to accumulate in the hands of a few, widening the gap between rich and poor and exacerbating social inequalities. Stiglitz advocates for more stringent regulations to ensure financial stability and equitable economic growth.