The gathering of the world's major central bankers at the Jackson Hole retreat in Wyoming could also be characterised as meeting of the world biggest and most influential fund managers.

Key points: G4 central banks' balance sheets have grown to $US14 trillion since 2008

G4 central banks' balance sheets have grown to $US14 trillion since 2008 Unwinding their asset buying programs while maintaining financial stability will be a focus of the Jackson Hole meeting

Unwinding their asset buying programs while maintaining financial stability will be a focus of the Jackson Hole meeting Macquarie estimates around $US400 trillion worth of financial assets tied to the unwinding decision

Together the G4 group — The Federal Reserve, European Central Bank, Bank of Japan and Bank of England — have amassed $US14 trillion of assets in the past few years.

Throw in the People's Bank of China and it is closer to $US19 trillion.

The expansion of central banks' balance sheets is even more extraordinary given they collectively held less than $US6 trillion in 2008.

The bank bosses would like to get out of the market and that poses some very genuine and large risks not only to global markets but also the global economy.

"We can't see how central banks can tighten and avoid dislocating (around) $US400 trillion of incessantly interacting financial instruments," Macquarie's strategy team wrote in a sobering note.

Financial stability the growing concern

The Jackson Hole meeting is unlikely to provide any blockbuster disclosures, with the most interesting conversations happening behind closed doors.

Next month's meetings of the Fed and ECB are far more likely platforms for policy announcements, but Jackson Hole is still worth watching.

Fed chair Janet Yellen and the ECB's Mario Draghi preside over bank boards with quite divided opinions.

Both leaders will deliver key note addresses.

Dr Yellen's chosen subject is "financial stability". It is a subject gaining an increasingly prominent airing among central bankers.

The Fed's deputy chair Stanley Fischer recently noted vigilance was needed as asset prices and debt were building up again, while another voting member on the Fed's rate setting committee John Williams told the ABC Wall Street was pretty well running on fumes.

It is an understandable concern given traditional measures of value in the US — such as the S&P500 or the Schiller-cyclically-adjusted price earnings ratio relative to GDP — are at historically elevated levels, Citi's global chief economist Willem Buiter wrote in a note overnight.

"Major balance sheet announcements by the ECB and the Fed are approaching, and central bank net asset purchases in advanced economies are set to fall from roughly $US100 billion a month currently to zero by end of 2018, while policy rates are rising gradually, too," Dr Buiter said.

Dr Buiter's view is, with the global economy looking more robust, it should allow for a moderate monetary tightening.

"However the case to tighten is only moderately strong given inflation is weak across all advanced economies," he said.

"The main risk from global tapering originates in financial markets, in our view, which could react sensitively to monetary tightening.

"For now, we suspect that the risk of a major asset market correction is a reason for central banks to tread cautiously and only remove stimulus very gradually."

The hawks are circling

Over in Europe, the hawks are keen to get going on wrapping-up the ECB's asset buying — or quantitative easing — program, currently rattling along at 60 billion euros a month.

"Based on our June forecast, there is no need in my view for taking further action for next year and, in particular, not for extending the buying programme," Bundesbank president Jens Weidmann told the German media overnight.

Almost simultaneously, and also in Germany, ECB boss Mario Draghi was urging caution.

"We must be aware of the gaps that still remain in our knowledge," Mr Draghi said in a speech in Lindau on his way to Wyoming.

Back in June, Mr Draghi was striking a more hawkish stance pointing to "a strengthening and broadening recovery in the euro area."

That simple observation threw markets into a mild panic and a rush to the exits.

If that is what the merest sniff of ending QE can do, just imagine when the real thing hits.

The markets waiting intently for some hints out of the central bankers' retreat are likely to be disappointed.

The impossibility of tightening

While some unwinding of bond buying and raising interest rates back to "normal" are underway — in the US at least — the central banks are still stuck with what Macquarie calls the "the impossibility of tightening".

The central banks want to build up their interest rate buffers in case they need to cut again, reduce the distorting impact they are having on bond markets and not blow up an even bigger bubble in equity markets.

"They [the central banks] cannot disconnect without potentially causing an unacceptable level of asset price re-pricing and a hit to confidence but, at the same time, the longer they wait the greater the ultimate value drop, and thus pressure on central banks to rescue the world, yet again," Macquarie's strategy note said.

As Macquarie pointedly noted, the side-affects of addictions are withdrawal symptoms.

"There are no viable strategies that one can construct in conventional sector and style rotations," Macquarie glumly informed its clients on ways to deal with the current policy confusion.

And that is the quandary the central bankers will be privately discussing in the backblocks of Wyoming over the coming days; just what are their strategies to rotate out of a market they have plunged in to.

It is a big question — a $US400 trillion question.

