As the market speculates on when the Fed will begin to slow its quantitative easing program, former Goldman Sachs Asset Management chairman Jim O'Neill isn't alone in believing a taper would mean turbulence for financial markets.

But for O'Neill, it would also "not be a stretch" to see 5% yields on the 10-year Treasury, reports Bloomberg.

Given the 10-year's current 2.11% yield, that would imply a big sell-off in the bond market.

O'Neill talked about that — and his prediction for a bond crash — in his Bloomberg View column earlier this week:

A return to normality eventually implies a benchmark 10-year Treasury yield of 4 percent or more. It won’t happen all at once, but that’s where we’re heading. With yields at roughly 2.2 percent, there’s a long way to go. This transition will mark a recovery of the equity culture and the cooling of investors’ protracted love affair with bonds.

Investors are already pulling money out of bonds and emerging markets like crazy. O'Neill goes on:

High-yield complex municipal bonds and emerging-market bonds are quite likely to suffer a bit more than U.S. Treasuries when the moment comes. The same probably goes for gold (though you might think it has suffered enough in recent months). I wouldn’t mind betting that much-unloved peripheral European bonds will end up being a better thing to own when this happens -- along with various reasonably valued equity markets, of course.

O'Neill believes that once the "love affair" with bonds subsides, investors will fall back in love with equities, even if they too feel a pang from the taper.

Read the rest of O'Neill's column at Bloomberg View >