After days of turmoil, global share markets have seen some upside and an uneasy sense of calm has emerged after the price of crude oil rose sharply.

But how long will that calm last and is there worse to come especially given concerns that heavier and deeper falls remain a real possibility?

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One of the world’s top central bankers is worried that the recent era of near-zero interest rates and trillions of dollars in money printing, or quantitative easing, might have set the global economy up for a hard fall.

Raghuram Rajan, the governor of India’s central bank, said the cheap and easy money had only served to ramp up asset prices to unrealistic levels and that there would be a day of reckoning if values failed to match reality.

If we continue down this path long enough, the reckoning will be pretty significant.

“By intervening directly in asset prices, we have distorted some of them to the extent that the markets are not sure of what pricing is, as well as markets are not sure what the central bank reaction function will be,” he warned.

Blinded by easy money.       Photo AAP

“My sense is that at some point the market has to live on its own.

“If you keep rates at such a level, you better hope that at the end of it those asset prices in fact materialise.

“If they don’t there is a reckoning to come.

“The worry is that if we continue down this path long enough, the reckoning will be pretty significant.”

Mr Rajan’s warning comes as the president of the European Central Bank, Mario Draghi, signalled the chance of even more economic stimulus, possibly as early as March.

The excessive optimism that has been spreading around is wrong.

Mr Rajan’s concern has been echoed by the Nobel prize-winning economist Joseph Stiglitz who said fundamentals have gone off track.

“Market turmoil can be a harbinger that something is wrong and, even if it is irrational, can have real consequences,” Professor Stiglitz told the World Economic Forum in Davos, Switzlerland.

“What is going on now is a message that the excessive optimism that has been spreading around is wrong.

“There was an excessive euphoria. Undoubtedly the loose monetary policies pumped up asset prices. They didn’t do much for pumping up the real economy.

“Where was all the liquidity going? Some of it just went into the balance sheets of banks and went into increasing asset prices.”