The Federal Reserve has never been truly independent of political pressures, with officials appointed by the President and subject to changing political whims.
A revolving door exists between the Treasury and the Fed, with no significant socioeconomic barriers between officials.
The current administration’s relationship with Fed Chair Powell is described as “theater”, involving scapegoating and blame-shifting for economic outcomes.
During World War II, the Fed’s primary objective was to help finance the war effort by purchasing government debt with newly printed money.
The Treasury-Fed Accord of 1951 established the Fed’s independence, but it was a gradual process over a decade rather than an immediate change.
The Fed’s behavior during World War I was indirect, focusing on lowering bank reserve requirements to increase liquidity.
A 1978 statistical analysis by economist Winrob found that the best indicator of monetary policy is the president’s economic objectives, not Fed independence.
After the closure of the Bretton Woods system in 1971, interest rates became a poor indicator of Fed independence or dependence.
The Eisenhower administration’s low inflation rates were not a sign of Fed independence, but rather continued dependence on the Treasury.
The appointment of William McChesney Martin as Fed chair by the Truman administration, despite being seen as a move towards independence, was actually a sign of continued Treasury influence.
Historian Jonathan Newman argues that the Fed’s independence is a myth, with the president always having the upper hand in monetary policy.
Central banks bought over 1000 tons of gold annually for 3 consecutive years, driven by emerging markets in Shanghai, Dubai, and Mumbai, accounting for one-third of annual gold production.
Repatriation of gold by nations highlights its importance as a store of value that retains worth even if the global financial system collapses, destroying electronic assets.
The weaponization of the US dollar in 2022 and potential new Bretton Woods agreement are driving gold’s increasing significance in the global monetary system.
Gold is becoming a neutral reserve asset, with central banks accumulating it to minimize counterparty risk and reduce dependence on Western financial systems.
Family offices worldwide allocate only 1% to precious metals, but studies suggest increasing to 14-18% improves balanced portfolio characteristics.
Gold and silver are time-tested hedges against inflation and systemic risk, offering certainty in uncertain times and a safe haven when trust in traditional institutions collapses.
May 2025 COMEX deliveries set records: 16,000 gold contracts ($5.3B) and 14,000 silver contracts, with 3,200 silver contracts (16M oz) transferred from banks to non-banks.
Gold’s cup and handle breakout is significant, with gold up 25% YTD 2025, while silver lags but offers asymmetrical risk-reward at the current ~100 gold/silver ratio.
The Fed’s under-the-radar May 2025 Treasury purchases ($44B in 3-30Y bonds) stabilize waning demand, while the U.S. runs massive fiscal/current account deficits.
A potential gold revaluation could lead to much higher prices than $3,200-$3,500/oz, with historical examples from Roosevelt and Nixon revaluing gold in 1972-73.
Judy Shelton’s theory, backed by Trump, proposes reintegrating gold into the monetary system by backing 50-year treasuries with deliverable gold, potentially issuing gold-backed bonds on July 4, 2026.
The DXY index shows 10-year cycles in the dollar’s value, alternating between upward and downward trajectories since the 1980s.
Silver has outperformed the S&P 500 over the last 10 years, with miners showing even stronger performance.
Central banks have reduced their gold holdings from 74-75% to less than 20% of their balance sheets.
Gold’s performance has decoupled from real rates, with investors selling treasuries and buying gold following the 2022 US seizure of Russian assets.
Gold is experiencing its best performance since the 1970s, with a market exceeding $20 trillion.
Silver is expected to participate significantly in the next 5-10 years due to depressed capital in the mining industry and lack of new mines.
Central banks are purchasing more gold than officially reported, with a significant delta between estimated and declared purchases.
The US Treasury is likely participating in gold purchases, with former hedge fund manager Scott Basson (now Treasury Secretary) having gold as his largest position.
Emerging markets are poised for explosive growth when the dollar and yields are capped.
Family offices, pension funds, and large institutions have minimal exposure to gold, silver, copper, miners, and resource stocks, presenting potential investment opportunities.
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