Why is leverage important to a Central Bank? It is one more straw that will break the camel's back.
So these things keep happening; but here is the problem, Chris: the Fed has printed almost four trillion dollars to put out the fire from 2008. What is going to happen if we have a liquidity crisis next month or next year? They are at the limit of their balance sheet. They are already insolvent on a mark-to-market basis. And again, that is not guesswork. I actually was told that by a member of the Federal Open Market Committee. They are leveraged 80-to-1. They cannot do more. So the next crisis is going to be bigger than the Fed. It is like they build a five foot sea wall and here comes a forty foot tsunami. There is only one clean balance sheet left in the world and that is the IMF. So the only way you are only going to reliquify the world in the next liquidity crisis is by the IMF printing their world money, these Special Drawing Rights or SDRs, and that is going to be the end of the dollar as a global reserve currency.
The entire interview is pretty scary, but so are the comments.
http://www.peakprosperity.com/podcast/85207/jim-rickards-coming-crisis-bigger-fed
"A long time ago back in 1995 I quit making contributions to my 401k. Here is why: 1-No trust in government to fairly tax such accounts by 2030. 2-Fear of government mandated "roll-in". 3-Too restrictive with the potential to get extremely restrictive. A "roll-in" would be the same as a "bail-in" except for retirement accounts. The government with the enforcement of the US Fed would demand such action under a catastrophic market crash similar to the one Rickards spoke of. Your 401k and other retirement accounts would be "rolled into" social security, which essentially means government debt(bonds), thereby liquidating whatever you had into a G FUND, like what Blackrock manages."
What that millionaire says is true - all of the 401Ks and IRAs, I see, being seized.
You will get "bonds", but your Social Security and other retirement will be dictated by what the Government says you will get.