Jerome Powell, the chairman of the Federal Reserve, is the subject of a criminal investigation revealed last week by the Department of Justice. The investigation is examining whether Powell's testimony last June contained false or misleading statements, and it could lead the DOJ to file formal charges of perjury or false statements. In this video, I'm going to explain what is likely to happen to Powell, what is the real reason for the investigation, and what does this all mean for gold and


silver investors? Formally, the investigation centers on whether Powell's statements regarding the cost and scope of a federal building renovation were false or misleading. Powell cited earlier budget estimates of roughly $1.9 billion. But later, updated budget documents revealed a new estimate of $2.5 billion. That's an increase of roughly 30% or $600 million. Million with an M small. Now, I don't ever want to sound like I'm defending a fiat central banker, okay? But this is an


absurd reason to launch a criminal investigation. And Powell knows it. Listen to his reaction. >> But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role. The Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project.


Those are pretexts. 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. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead monetary policy will be directed by political pressure or intimidation. Obviously, this investigation is not about the building. It's about interest


rates, and that's a major clue why it's so good for holders of precious metals. But to understand it fully, we have to look at this from the government's perspective. In the next 12 months, the federal government has about 25% of its debt maturing, and it needs to be rolled over. Now, historically, in the last decade or two, this happened at near zero interest rates, and that kept the interest payment as low as possible. But now, we're up near 4%. And if the government refinances at such a high


interest rate, it's going to have a massive interest payment. And in case you're unaware, net interest is already the second largest line item in the federal government's budget. And so if that keeps growing, it's going to swallow absolutely everything that the government spends. The government simply cannot afford to roll over its debt at such high interest rates. So, as Powell mentioned, this criminal investigation is really just an attempt to strongarm the Federal Reserve chair into lowering


interest rates to help out an indebted nation. And this is music to any precious metals holders ears. If interest rates stay at their current level, that means that the fiscal situation of the US government continues to worsen. And that's already a great base case for gold and silver. But if interest rates actually get cut, well that means that real interest rates become even more negative. And you can see that negative real rates correspond to precious metals bull markets. So if real interest rates go even further


negative, this is like rocket fuel for the precious metals bull market. So when will we get these explosive rate cuts? Probably not until May or later. The investigation will take many months, realistically 12 or more before anything meaningful comes out of it. But Jerome Powell's current term as Fed chair is set to end in May. So realistically, Powell will finish out his current term, a new Fed chair will be appointed, and then this investigation will fade into obscurity without any criminal charges


filed against Powell. But there's one other key point here for gold and silver investors, and that is the fact that governments still haven't learned their lesson. If the problem is too much debt brought about by artificially low interest rates, then the solution can't be more debt brought about by artificially low interest rates, that doesn't make sense. That's fighting fire with fire. At some point, you have to stop borrowing and pay back what you owe. But as long as governments keep


trying to solve the debt problem with more debt, precious metals will continue to shine. So for those of you who add to your stack at golds.com, we thank you very much. We really appreciate it. And I'd like to end today's video with a meme. Looking here at the abysmal performance of maybe the dollar or some other part of the centrally planned economy, saying, "I don't get it. We had all those meetings." Thanks for watching.