The "Red Line" separating politics from monetary policy has just been erased. What many considered an impossible scenario in a developed democracy has become reality: The Department of Justice has launched a criminal investigation into Federal Reserve Chair Jerome Powell. It is a move that shatters the illusion of an independent central bank and signals a new, volatile era for the global financial system.
The market’s verdict was instantaneous and unforgiving. Recognizing that the last barrier against unchecked inflation is under siege, investors aggressively dumped US Dollars. The primary beneficiary of this panic? Silver, which rocketed up by $5 in a single session.
Officially, the investigation centers on alleged irregularities and cost overruns regarding the $2.5 billion renovation of the Fed’s headquarters in Washington. But on the trading floors, nobody believes this is really about marble facades.
Jerome Powell himself dropped the diplomatic mask in a statement released late Sunday, using unusually sharp language:
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
The cat is out of the bag: This is an open power struggle. The White House has been demanding aggressive rate cuts for months to boost the economy (and service the national debt). However, Powell and the Fed have held firm to prevent fueling the "second wave of inflation" that has plagued us since late 2025.
The news triggered an immediate repricing across all asset classes. Risk assets were dumped, while "safe havens" saw massive inflows.
Wall Street reacted allergically to the political uncertainty. The S&P 500 lost over 3.5% in early trading, while the tech-heavy Nasdaq 100 plunged by nearly 4.2%. Investors fear that a politically directed interest rate policy could lead to long-term hyperinflation, eroding real corporate earnings. The only sector flashing green in a sea of red was mining stocks (gold & silver).
Even more dramatic is the action in the forex markets. The US Dollar Index (DXY), which measures the greenback's strength against a basket of currencies, crashed below the psychologically important 98-point mark.
The message is clear: If the Fed loses its independence, the Dollar becomes a risk currency.
For financial historians, this is a watershed moment. Central bank independence is sacred. When politicians take control of the printing press, history shows that galloping inflation almost always follows—one only needs to look at Turkey in the early 2020s or Argentina.
The market is now pricing in a new risk: Fiscal Dominance. If Powell falls and is replaced by a loyalist, monetary policy could be dictated not by inflation data, but by the wishes of the Oval Office. In plain text, this means: Low interest rates at any cost and flooding the markets with fresh Dollars.
In this environment, silver is the undisputed winner. A price jump of over $5 in a single trading session is a direct flight from the fiat system. Silver is not just an industrial metal, but a monetary metal.
In a world where the central bank becomes politicized, paper money loses its function as a store of value. Silver, on the other hand, has no counterparty risk. It cannot be devalued by decree or "fired" by a political indictment.
The attack on Jerome Powell is more than a personnel debate; it is an attack on the stability of our monetary system. If Wall Street trusts Powell more than the political leadership, and Powell is now being dismantled, we are facing turbulent times.
Analysts have warned that this could mark the beginning of an era where inflation is politically desired. In such an environment, Gold and Silver are no longer just an option, but a necessity.
Do not wait until trust in the Dollar has completely eroded. Use the Spargold App to buy physical silver and gold now. In times when institutions falter, precious metals remain the only rock in the storm.
Stay farsighted
Yours, Nils Gregersen
