Fed chief Janet Yellen is facing a tough mid-'15. (Photo: AP)

David Stockman, the former head of the Office of Management and Budget, is getting more bullish by the day.

“The markets are going to be in for a huge, nasty morning after as people begin to look at where we really are,” he said Thursday on CNBC’s “Futures Now” program. And he expects the crash to come soon.

“We seem to have them every eight years,” said Stockman, a former Republican congressman from Michigan. “We had one in 2000 and everyone said, ‘This time was different.’ Then we saw a massive catastrophic decline. Eight years later, we had the same thing.”

As for 2015, “Now, we’ve had the weakest recovery in post-war history and what has happened?” he asked. “The Fed has simply reflated the bubble to an even more gigantic proportion.”

And it’s not just the Federal Reserve. Central banks around the world have been following a path of easy monetary policy and are now between a rock and a hard place, which also means trouble for the bond market.

“It’s not possible that the interest rate on the 10-year German bond should be 70 basis points when it was 5 just a few weeks ago — or even that the U.S. Treasury should be trading at 2% on the 10-year when we have taxes and inflation,” Stockman explained.

“Everything is totally distorted, and there is a day of reckoning coming down the pike,” he stressed.

In addition, the financial expert sees the economy and the markets have become overly dependent on low rates.

“We saw that Wednesday when the market had another spasm upward on the suggestion that the Fed won’t raise interest rates after all,” he stated. “The market seems to want to keep chopping up all of it on the basis that maybe the Fed will give them one more month of reprieve.”

The problem with the current dynamic, he adds, is that we now have “a coiled spring that is going to break loose one of these days, and there is going to be some pretty drastic and even violent adjustment.”

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