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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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Wed, 12/01/2010 - 10:25 | 767552 Salinger
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?

Wed, 12/01/2010 - 10:25 | 767556 Vergeltung
Vergeltung's picture

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

Wed, 12/01/2010 - 10:38 | 767586 Sudden Debt
Sudden Debt's picture

defenition of recovery:

Imagine...

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.

 

THAT PAUZE IS ALSO CALLED A "RECOVERY" ASS THE GUY HIS BLOOD GETS TIME TO DRY UP!

Wed, 12/01/2010 - 10:24 | 767553 Vergeltung
Vergeltung's picture

sigh.

Wed, 12/01/2010 - 10:29 | 767563 Cognitive Dissonance
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.

http://www.drscholls.com/drscholls/massaginggel.jsp

Wed, 12/01/2010 - 10:32 | 767581 Turd Ferguson
Turd Ferguson's picture

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

Wed, 12/01/2010 - 10:38 | 767602 Cognitive Dissonance
Cognitive Dissonance's picture

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

Wed, 12/01/2010 - 10:38 | 767604 groucho_marxist
groucho_marxist's picture

isn't the answer gellin like a fellon?

Wed, 12/01/2010 - 10:50 | 767634 Cognitive Dissonance
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?

Wed, 12/01/2010 - 10:27 | 767564 Sudden Debt
Sudden Debt's picture

another rocket scientist...

Wed, 12/01/2010 - 10:49 | 767631 Thomas
Thomas's picture

A rocket surgeon.

Wed, 12/01/2010 - 10:28 | 767565 trav7777
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"

Wed, 12/01/2010 - 10:50 | 767633 Rogerwilco
Rogerwilco's picture

@trav

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.

Wed, 12/01/2010 - 11:21 | 767697 hedgeless_horseman
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.

Wed, 12/01/2010 - 10:29 | 767566 Charley
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.

Wed, 12/01/2010 - 10:30 | 767576 Turd Ferguson
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

LIES LIES LIES!!!!

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.

LIES LIES LIES!!!

 


Wed, 12/01/2010 - 11:33 | 767768 TBT or not TBT
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.

Wed, 12/01/2010 - 10:31 | 767577 Goyim Sheep
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.

Wed, 12/01/2010 - 10:32 | 767584 goldsaver
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!

Wed, 12/01/2010 - 10:33 | 767587 Internet Tough Guy
Internet Tough Guy's picture

'Inflation remains too low'. Funny stuff.

Wed, 12/01/2010 - 10:35 | 767590 Jason T
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?"

Wed, 12/01/2010 - 10:37 | 767596 groucho_marxist
groucho_marxist's picture

we're doomed

Wed, 12/01/2010 - 10:39 | 767608 Jason T
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.  

Wed, 12/01/2010 - 10:41 | 767609 Kina
Kina's picture

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

Wed, 12/01/2010 - 10:42 | 767612 PeterSchump
PeterSchump's picture

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

Wed, 12/01/2010 - 11:35 | 767783 TBT or not TBT
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.

Wed, 12/01/2010 - 10:43 | 767615 Dr. Engali
Dr. Engali's picture

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

Wed, 12/01/2010 - 11:59 | 767944 Sudden Debt
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!

NOW THAT IS FRUSTRATING!

Wed, 12/01/2010 - 10:44 | 767620 DavidC
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.

DavidC

Wed, 12/01/2010 - 10:45 | 767621 bob_dabolina
bob_dabolina's picture

TNX

Wed, 12/01/2010 - 10:45 | 767622 Milton Waddams
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.

Wed, 12/01/2010 - 10:51 | 767637 Mark Medinnus
Mark Medinnus's picture

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

Wed, 12/01/2010 - 10:58 | 767654 rawsienna
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.

Wed, 12/01/2010 - 11:03 | 767667 Black Friday
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.

http://www.youtube.com/watch?v=91IbtF1QGrY

Wed, 12/01/2010 - 11:10 | 767686 The Franchise
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.

Wed, 12/01/2010 - 11:20 | 767714 TruthInSunshine
TruthInSunshine's picture

Poor Janet Yellen.

 

So 2000 & Late.

Wed, 12/01/2010 - 11:22 | 767723 jmc8888
jmc8888's picture

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

Wed, 12/01/2010 - 11:38 | 767791 Mark Medinnus
Mark Medinnus's picture

Old Yellen - this is great!

Wed, 12/01/2010 - 11:40 | 767801 Mark Medinnus
Mark Medinnus's picture

Old Yellen - this is great!

Wed, 12/01/2010 - 11:29 | 767750 gwar5
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.

Wed, 12/01/2010 - 12:52 | 768199 theprofromdover
theprofromdover's picture

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

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