Who’s Really Controlling the Fed?
Most people believe central banks are independent agencies working tirelessly to keep prices stable, employment high, and markets strong. But what if the Federal Reserve’s “independence” is more about optics than reality?
Lynette Zang unpacks this critical issue, exposing how the Fed regulates the rate and speed of inflation to keep the public invested in the current money game while political leaders quietly tighten their grip on monetary policy.
White House Moves to Control the Fed
Recently, Treasury Secretary Scott Bessent emphasized the need for the Fed to reestablish its credibility as an independent institution focused on its legal mandates: stable prices, maximum employment, and moderate long-term interest rates.
But at the same time, the administration is actively reshaping the Fed’s leadership firing governors, installing allies, and pushing for immediate rate cuts. If successful, the president could command a majority on the seven-member Board of Governors, gaining effective control over interest rate decisions and bank supervision.
This is not just influence. It’s command.
From Price Stability to Market Management
Bessent’s Wall Street Journal op-ed points to “mission creep” at the Fed. Originally created to stabilize the currency, the Fed’s role has expanded dramatically. It now manages asset markets, stock and bond prices, and even fiscal rescues.
“They create the problems and then ride in to fix them,” Lynette notes.
Politics and the Fed’s Credibility Crisis
Political pressure on the Fed is not new. Presidents from Nixon to today have tried to sway rate decisions, especially during election years. But the stakes are higher now. Former Treasury Secretary Larry Summers warns that we are “on the foothills of a credibility crisis” as inflation expectations spiral.
“It’s not what’s true that matters to them,” Lynette explains. “It’s what’s believed to be true.” That’s why the Fed closely monitors consumer sentiment and inflation expectations because managing belief is how they manage you.
But history shows the erosion of the Federal Reserve’s independence has come at a cost: public trust and financial stability.
Why Sound Money Matters
Lynette’s favorite chart, the Fed’s purchasing power graph, tells the story clearly. When central banks lose independence, inflation and instability follow. When the public loses confidence in the Fed, they lose confidence in the money itself a pattern repeated throughout history.
Physical gold and silver stand apart from politics. They anchor purchasing power and wealth preservation even as institutions drift. This is why sound money strategies centered on tangible assets like gold and silver are essential for financial freedom and protection against hyperinflation.
How We Got Here: From the Gold Standard to Quantitative Easing
The Federal Reserve was created in 1913 as a kind of thermostat for the economy meant to regulate inflation and keep conditions stable. But from day one, the Treasury Secretary had a seat at the table. True independence never fully existed.
During World War I, the Fed became a furnace for war financing. By the 1930s and 1940s, presidents and Congress had effectively bolted the thermostat to the wall to fund massive programs, leading to debt and inflation.
In 1971, President Nixon ended gold convertibility removing the mirror that reflected the true value of money. The Fed could now print without gold backing, secretly turning up the thermostat to boost the economy ahead of elections. The result was stagflation: high prices and slow growth the very conditions we’re seeing again today.
By 2008, after decades of risk-taking, the Fed added new “buttons” and “wires,” buying assets, setting market prices, and backstopping Wall Street. During the COVID-19 pandemic, this experiment went further, blurring the line between monetary and fiscal policy and creating a top-down “zombie economy.”
What’s Next and How to Prepare
Today, with the administration replacing key Fed leaders, the president could soon set interest rates directly, approve regional presidents, and influence bank supervision. Handing the thermostat to one person risks inflating away savings, devaluing the currency, and eroding trust in the system even faster.
“We’re on the foothills of a credibility crisis,” Lynette warns. In every Ponzi scheme, credibility and new money are essential. If people stop believing the Fed can keep prices stable, the whole house starts to shake.
At Zang Enterprises, we don’t wait for someone else to fix the thermostat. We build our own anchored in sound money strategies with physical gold and silver, plus food, water, energy, security, community, barterability, and wealth preservation. Sound money doesn’t change with politics. Local resilience doesn’t depend on central banks. Combined, they give you the power to design your own climate instead of being controlled by theirs.
A Call to Action
As global instability rises and central banks face political pressure, investors are rushing into safe-haven assets like gold and silver. Gold mining stocks have surged to their highest peak since 2011, signaling fading trust in fiat currencies.
But history shows governments often respond to crises with more control and even forms of confiscation. Don’t wait for the system to fail. Take control of your financial future today.
Learn how to protect your wealth and prepare for economic instability with Zang Enterprises’ sound money strategies. Discover how physical gold and silver can help you achieve financial freedom and build resilience in uncertain times.
