Bernanke: The time when projections become reality is coming closer.

Excerpts from bernanke's speech today before senate before the Committee on the Budget.

The Committee (FOMC) decided to continue its program to extend the average maturity of its securities holdings, to maintain its existing policy of reinvesting principal payments on its portfolio of securities, and to keep the target range for the federal funds rate at 0 to 1/4 percent.

Assuming that most expiring tax provisions are extended and that Medicare's physician payment rates are held at their current level... the budget deficit would be more than 4 percent of GDP in fiscal year 2017, assuming that the economy is then close to full employment. Of even greater concern is that longer-run projections, based on plausible assumptions about the evolution of the economy and budget under current policies, show the structural budget gap increasing significantly further over time and the ratio of outstanding federal debt to GDP rising rapidly. This dynamic is clearly unsustainable. 

Over the longer term, the current trajectory of federal debt threatens to crowd out private capital formation and thus reduce productivity growth

Even the prospect of unsustainable deficits has costs, including an increased possibility of a sudden fiscal crisis. As we have seen in a number of countries recently, interest rates can soar quickly if investors lose confidence in the ability of a government to manage its fiscal policy....we can be sure that, without corrective action, our fiscal trajectory will move the nation ever closer to that point.

If something the world has learned is that one of the assets with more value is the confidence and never should be jeopardized. Now looks like the key word for ECB and Fed is confidence.