The confidence and enthusiasm that investors currently have about the ability of monetary policy to prevent all negative outcomes has been seen before, according to economist and fund manager John Hussman.

Specifically, the confidence and enthusiasm that investors have mirrors those in 2000 regarding the permanence of technology-driven productivity and in 2007 about the durability of housing gains and leverage-driven prosperity.

“Market history is littered with unfounded faith in new economic eras, and hopes that ‘this time is different,’” Hussman writes in a note to investors.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

“Those periods can be difficult, at least for a while, for investors who are less willing to abandon evidence and lessons of history, not to mention basic principles of economics and valuation.”

In Hussman’s view, this time is no different.

“It may be more drawn out, but it bears repeating that the 2008-2009 market decline, when it arrived, wiped out the entire total return that the S&P 500 had achieved, in excess of Treasury bill returns, all the way back to June 1995,” he notes.

“Regardless of any immediate relief from the Federal Reserve or the European Central Bank (both which I suspect are largely priced into the markets, and leave investors vulnerable to disappointments), I expect that stocks will achieve weak overall returns over the next few market cycles … .”

According to a recent CNBC survey, most market participants expect the Federal Reserve and the European Central Bank to take steps to stimulate their respective economies.

The survey, which included responses from 50 top money managers, investment strategist and professional economists, found that 89 percent said they believe the European Central Bank will purchase more sovereign debt, and 78 percent said they expect the Fed to undertake additional quantitative easing.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown