Central banks have created an environment where both major downturns as well as expansions are almost impossible, venture capitalist Chamath Palihapitiya said Tuesday.

A well-known investor across a multitude of areas, including as a very early Facebook executive and a big proponent of cryptocurrencies, Palihapitiya told CNBC that entities like the Federal Reserve have used quantitative easing to stage-manage an essentially stagnant economy.

"I don't see a world in which we have any form of meaningful contraction nor any form of meaningful expansion," he told CNBC's Scott Wapner during a "Fast Money Halftime Report" segment. "We have completely taken away the toolkit of how normal economies should work when we started with QE. I mean, the odds that there's a recession anymore in any Western country of the world is almost next to impossible now, save a complete financial externality that we can't forecast."

A lack of downturns is not necessarily a good thing, Palihapitiya added, and he criticized central banks for refusing to allow normal economic cycles to play out.

"Central bankers have lost all intestinal fortitude to actually put a country through a recession, because it's actually regenerative and useful," he said. "Even if they had the wherewithal to do it, the political infrastructure will just completely absorb that intent. So we are probably not, save of something crazy, going to see massive, massive negative growth except in countries that are so fundamentally crippled that they tip over."

For investors, that means a limited menu of choices.

"So the reality is we're going to grow low single digits every year, which means there's no growth anywhere else, which means you're better off buying equities and you're better off buying equities that are substantively ones that are sort of the deflationary stocks, the cheaper, faster better stocks, the tech stocks," he said.

Palihapitiya is CEO of Social Capital and he also is a minority stakeholder and board member of the NBA's Golden State Warriors.