The battle for the Federal Reserve’s independence has taken a decisive turn, and the markets are still sipping cocktails as though nothing is happening. Donald Trump has announced his (attempted) firing of Federal Reserve Governor Lisa Cook, citing alleged mortgage irregularities. Never before has a president tried to dismiss a Fed governor. It’s the sort of act that would once have sent Treasury yields rocketing, the dollar tumbling, and polite society into a collective faint. Instead, markets yawned, perhaps comforted by the delusion that the firing will be bogged down in courts and ultimately dismissed. But this isn’t about one governor and a mortgage form. This is about who controls the price of money.
The Federal Reserve’s mystique has always rested on the notion of independence, of unelected technocrats guarding the gates of monetary policy while politicians busy themselves with tax cuts and wars. The illusion has been useful, even stabilising. Investors like to think of the Fed as a neutral umpire, guided by models and mandates rather than political whim. That illusion is now being ripped to shreds.
With Cook gone, Trump will likely appoint four of the Fed’s seven governors. A majority. That alone does not hand him the keys to the interest-rate committee, because the regional Fed presidents also have votes. But here’s the rub: those regional presidents must be reapproved by the Board of Governors in Washington every five years. Every single one of them is up for renewal in February. Historically, this has been a box-ticking exercise. Under Trump, it could become a purge.
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Bill Dudley, himself a former president of the New York Fed, has warned that we’re entering uncharted waters. If the Board begins vetoing regional presidents who don’t bend to Trump’s will, the whole charade of independence collapses. Imagine FOMC meetings where half the room fears the sack if they raise an eyebrow at rate cuts. Imagine markets realising that the central bank’s decisions are not the result of debate and data, but the latest whim of a president preparing his re-election campaign. Chaos does not begin to cover it.
And this is where many alternative thinkers begin to look rather prescient. Because none of this is accidental. Trump’s economic team, with Stephen Miran now seated on the Fed’s board, have long envisioned what they call a monetary reset. The so-called Mar-a-Lago Accord. The strategy is simple enough: weaken the dollar, reflate American industry, neuter the bond market’s discipline, and (whisper it) revalue gold as the anchor of a new system.
History offers precedents. The Plaza Accord of 1985 worked only because the Fed cooperated with the Treasury in weakening the dollar. Trump appears to have learnt the lesson. Capture the Fed, align monetary policy with trade and industrial policy, and force through the reset. Already, gold has soared above $3,400 an ounce, not just on whispers of rate cuts, but because insiders see the bigger picture: if the dollar is to be debased deliberately, you want to be holding something real. Something that cannot be fired, reappointed, or vetoed by a political appointee.
What investors should worry about is not whether Cook wins her court case. That will drag on for months, perhaps years. The damage is already done. The precedent has been set: the White House can weaponise accusations, however flimsy, to reshape the central bank. And if the Fed falls, the ripple effects go global. The dollar’s credibility is the world’s financial oxygen. If it begins to look like a mere pawn in Trump’s “reset” strategy, borrowing costs could soar, foreign governments could accelerate their de-dollarisation, and gold’s ascent could turn vertical.
So far, markets remain complacent. Wall Street always assumes someone will step in to keep the music playing. Yet beneath the surface, the very architecture of the financial system is being rewritten. Independence was the thin veil of respectability that allowed the Fed to print, cut, and bail out while pretending it was all in the name of stability. If that veil is gone, we are left with naked politics. And naked politics always finds its scapegoats, its losers, and its victims.
For savers and investors, the lesson is brutal but clear. Do not assume that the central bank is there to protect you, or even the system. It is there to protect the state. And when the state grows desperate, it will conscript the Fed, the dollar, and your savings into its cause. Which is why, as ever, the rational course is to keep a portion of your wealth outside the system altogether. Physical gold and silver do not sit on anyone’s board, they do not bend to presidential tweets, and they do not require a rubber stamp from Washington.
The Fed may be falling. The dollar may be entering a carefully engineered decline. The reset may come with a flag-waving name like the Mar-a-Lago Accord. But through it all, an ounce of gold remains the same. It is only the paper promises around it that change, and not for the better.
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