But this change in monetary policy will come after these central bankers have so massively distorted the bond and equity markets in relation to the economy that it could cause both equity and bond prices to crash simultaneously. This is because investors will rush to front-run the offer to sell sovereign debt and equities from central banks. It is no coincidence that the S&P 500 began its topping process once QE ended in October 2014 and that the average stock had fallen 25 percent in January of this year after the Fed began to raise interest rates.

The real purpose of all the extraordinary and unprecedented measures taken by central banks over the past few years isn't about achieving an arbitrary inflation target. I don't believe the Fed, theEuropean Central Bankor the Bank of Japan really believes 2-percent inflation is better for productivity and labor force growth than having no inflation at all. The reality is these central banks need an excuse to continue manipulating bond yields inexorably lower in order to accommodate soaring debt levels.

But in this endeavor, there is no easy escape. The equity and bond markets have become absolute wards of central bankers and central banks cannot stop buying government debt without causing markets and economies to crash. Of course, they will eventually have to stop in order to avoid runaway inflation. That is the huge dilemma facing global central banks. And unfortunately, this means the real economic and market volatility is yet to come.