A tapering of quantitative easing is now "off the table," and that's not a good thing, says hedge fund star Paul Singer, CEO of Elliott Management.

"The conditions for a loss of confidence are here right now," he said at an investment conference in New York Tuesday, according to CNBC.

Janet Yellen, who is expected to be nominated Wednesday to take over as Federal Reserve chairman for Ben Bernanke next year, won't curb the country's dependence on debt as Fed Chairman Paul Volcker did in the 1980s, Singer noted.

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"There's an absence of any signs that political leaders are willing to face this problem and address and restructure these obligations," he added.

"The s--- hits the fan when markets wake up and focus on" our mushrooming debt burden, Singer explained. "No growth rate and tax rate can fix this. It needs to be fixed by restructuring. There's no inflating out of it."

A combination of rising commodity prices and inflation, sluggish growth and accelerated quantitative easing could combine to sap investor confidence, he said.

John Makin, a resident scholar at the American Enterprise Institute, says the uncertainty surrounding monetary and fiscal policy could cause a recession next year.

The uncertainty on the monetary side concerns when the Fed will begin tapering, he wrote in an article for Politico.

"Now add to this the uncertainty over the debt ceiling, and you have a recipe for recession in 2014."

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