Yellen: "If Current Fiscal Policy Settings Are Maintained, US Budget Will Be On Unsustainable Path"

Tyler Durden's picture

Will be? Has this woman, or anyone else who is cheering the wonderful recovery in the US economy which is literally based on massive, and unrepayable, borrowing from the future, seen a chart of the exponential US federal debt? And another tidbit from a speech Yellen is currently presenting: "Fed's Yellen says long term securities buys "actually quite similar" to the Fed's traditional monetary policy approach." Well, of course: whenever the Fed does not get the desired result it merely goes in the market and buys various assets, monetary base be damned. As to how distorting the Treasury curve and all equity marrkets is part of the Fed's mandate, we leave to Ron Paul's first debate with Bernanke which is coming up soon.

Other soundbites from Yellen via Reuters:

  • Fed's Yellen says unemployment is likely to remain high for some time, inflation too low
  • Fed's Yellen says strongly supported Fed's bond buy decision, but it is no panacea
  • Fed's Yellen says US needs credible plan to bring down deficits while addressing economy's short-term needs
  • Fed's Yellen says premature fiscal tightening could retard already tepid economic recovery
  • Fed's Yellen says Fed has commitmentt and tools for eventual removal of extraordinary accomodation
  • Fed's Yellen says objective of treasury buys is to reduce long-term interest rates, spur growth
  • Fed's Yellen says US economic performance continues to be impaired by lingering effects of the financial crisis
  • Fed's Yellen says if current fiscal policy settings are maintained, US budget will be on an unsustainable path
  • Fed's Yellen says Fed policy should provide support for sustained expansion of global economy

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Salinger's picture

"Has this woman, or anyone else who is cheering the wonderful recovery in"


so Tyler are you saying that we are in fact in a recovery?

Vergeltung's picture

no, I do not believe he is.....

Sudden Debt's picture

defenition of recovery:


I beat the hell out of somebody with a baseball bat for 20 minutes.

broken scull, every bone in his body is sticking out of his skin... it looks nasty.


And after those 20 minutes, I pauze for 5 minutes.



Cognitive Dissonance's picture

Fed's Yellen says are you Gellin?

Say whatever you want Ponzi master and imperial keeper of the public myth. We understand that you're just a puppet for the real masters of the universe.

Turd Ferguson's picture

CD, I actually have Scholls gels in the shoes I am wearing as I type. They're fantastic! Seriously.

Cognitive Dissonance's picture

Then I guess we can believe everything Yellen tells us since she's correct about the Gellin.

groucho_marxist's picture

isn't the answer gellin like a fellon?

Cognitive Dissonance's picture

Thanks for the update on Yellen. I made one small improvement.

Fed's Yellen says are you Gellin while a Felon?

Sudden Debt's picture

another rocket scientist...

trav7777's picture

the message coming from the bankers is pretty unanimous - austerity.  They honestly seem to feel like they've done us a favor with all this QE covering the interest owed on the money they've conjured out of their asses to "lend" to us.

Let me translate Yellen's spiel:  "GET BACK ON YOUR FUCKIN WHEELS, GOY HAMSTERS"

Rogerwilco's picture


You nailed it. Yellen is placing her CYA marker in the record and getting us ready for the "A" word that will appear more and more after the holidays. Alan Simpson and Erskin Bowles are our new best friends -- really.

hedgeless_horseman's picture

Erskin's idea of austerity is phoneing in the order for RFI's Virginia Peanut Soup himself.  It is indeed excellent soup, especially with a glass of Dry Sack.

Charley's picture

The deficit fears are being deliberately fanned because there is no exit from QE2 except by reducing federal spending. Austerity is the exit plan for QE2.


According to Modern Monetary Theory, deficit reduction through reduce spending and higher taxes is a monetary operation to reduce liquidity.

Turd Ferguson's picture

12-01 09:12: Fed's Yellen says long term securities buys "actually quite similar" to the Fed's traditional monetary policy approach


Yes, traditionally the Fed has immediately re-purchased with newly created cash, direct from the Primary Dealers, bonds that were just issued two weeks ago.

Good Lord in Heaven, they really believe that we are all the dumbest Mfs on the face of the planet.



TBT or not TBT's picture

Most people have no clear idea what a bond is.   I'd guess half of the population don't even know the "Federal Reserve" prints the paper money, has a "balance sheet", or buys "bonds", nevermind "Treasuries"....whatever those are.   

Our current difficulties arise from an excess in democracy at the expense of the original representative, constitutional republic idea.   One or the other of the founders famously pointed out the contraption ought to work well until people figure out they can vote themselves goodies out of the national treasury(at which time pandering politicians can make their career helping them).   That's where we are today.

Goyim Sheep's picture

And just like that the US Deficit Commission releases a preliminary report with $4 trillion in deficit reduction by 2020. Good luck with that one.

goldsaver's picture

"If you stay on the train tracks you could possibly be hit by that incoming train"

"If you poke the bear with a stick, she might get annoyed"

"If you keep setting fire to your curtains, you might get an awful smell of burnt hair"

Wow, she must work for a bank!

Internet Tough Guy's picture

'Inflation remains too low'. Funny stuff.

Jason T's picture

Someone at the Fed knows 3rd grade math.


How about the Fed itself is a cancer that is killing America and should be purged and replaced with national bank that will issue interest free debt free money.  Something we once called in America, "The American System?"

Jason T's picture

Ben is going to do a Rudolf Havenstein policy to get unemployement at 1% like in the summer of 1922.  


Inflation was high enough to get unemployment down.  

Kina's picture

Fed's Yellen says the Ben Bernank is not sustainable.

PeterSchump's picture

The Amerikn peeples looked up frum de tellyvishun fer a minute, so sumone had to say sumtin.

TBT or not TBT's picture

This stuff sounds to most of the population like the parent characters on the old Peanuts cartoons...sorta whiney nasal sing-songy vocalisations with no meaning.

Dr. Engali's picture

Wake up sheeple.!!!!! Good Lord this is frustrating.

Sudden Debt's picture

Yesterday, on the news there was a 5 minutes overview of the financial troubles in Belgium.

Today, when I was talking to my collegues, almost everybody had seen the news.

BUT none of them remembered ANYTHING about those 5 minutes!!

It was like they all went to the kitchen to get Chips and Cola during those 5 minutes!

Some of them even disputed that this was on the news!


DavidC's picture

S&P bouncing around 1200, Dow nearly 11,200, must be a recovery.

As I've posted elsewhere, the Feds announcement at 12 must be a doozy if the markets already like it before it's been announced.


Milton Waddams's picture

Lulz... An entire family of lifelong economic academics, and yes a position at the Fed is an extension of a career in academia.

Tell me again why people who did not have the moxie to duke it out in the "real" economy are qualified to opine on it, let alone have some control over it?

Yellen is married to George Akerlof, a Nobel prize-winning economist and professor emeritus at the University of California, Berkeley. Her son, Robert Akerlof is currently a postdoctoral associate in Applied Economics at MIT's Sloan school of business.

Mark Medinnus's picture

Yellen, who highlights the trouble with rhetorical tribbles, should ponder this: how many QE Klingons finally constitutes a swarm? 

rawsienna's picture

Ms Yellen


You and yor academic frinds may think that buying longer term treasuries is "actaully quite similar" to the traditional approach but let me assure you the market does not.  Tell me Ms academic genius, when the time comes to tighten policy, will the FED sell those longer dated treasuries into the market at a time when the treasury has large funding needs?  I may suggest the decision to sell assets from the portfolio is a more complicated/difficult process than just raising the FF rate.  You run the risk of losing complete control of the long end of the curve. Tail risk is much greater. Fools.

Black Friday's picture

Not that it is needed or even 100% correct but I had to vent a little and made one of those Xtranormal things.

My first time and unscripted so take what you will from it.

The Franchise's picture

The way these statements are being framed now amazes me. No wonder why J6P doesn't know what to do with himself other than buy more iBroke. "If we continue down this path" deficits "will be on" an unsustainable path. What is all this "if" shit? The tracks were laid with the system we have in place, shit the system is the track, the fraudulent and corrupt are conducting the train which is the Fiat.... there is no "if" and there is no moving the goal posts. We are just deciding the how which will decide the when, f the "if" bullshit Yellen.

TruthInSunshine's picture

Poor Janet Yellen.


So 2000 & Late.

jmc8888's picture

Sounds like Old Yellen is frothing at the mouth.  That would explain the lunacy.

Mark Medinnus's picture

Old Yellen - this is great!

Mark Medinnus's picture

Old Yellen - this is great!

gwar5's picture

People like Yellen say, "Will be on an unsustainable path..."  to give the impression there is still time. 

Too late. The Fed has already set sail on a one way journey without enough lifeboats.

theprofromdover's picture

Well someone better teach Ron Paul not to ramble on too long, and keep his questions tight, and short.