US PRESIDENT Donald Trump was accused of turning the US into a banana republic over the threat of legal charges being brought against the chairman of the Federal Reserve, Jerome Powell.
On Sunday night, Powell revealed in a video statement that the Department of Justice (DoJ) had issued threats of criminal charges against him over testimony he gave to senators about a federal building renovation project.
Trump denied having ordered the DoJ to issue this threat but in this video Powell abandoned his usual diplomatic style when dealing with Trump and stated: ‘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.’
Powell’s predecessors as Chair of Federal Reserve, Alan Greenspan, Ben Bernanke and Janet Yellen issued a joint statement supporting Powell and his vow not to be intimidated by Trump.
They said: ‘This is how monetary policy is made in emerging markets with weak institutions with highly negative consequences for inflation and the functioning of their economies more broadly.’
The statement continued: ‘It has no place in the United States whose greatest strength is the rule of law, which is the foundation of our economic success.’
Yellen told broadcaster CNBC that the situation was ‘extremely chilling’ and that ‘the market should be concerned’, before adding: ‘It is the road to a banana republic.’
Apparently, these former masters of the US central bank had not realised that Trump and the American ruling class have been busy for the year of his presidency in tearing up all the ‘rules of law’ that they hold to be US capitalism’s greatest strength.
While they were happy to sit back while Trump waged economic war against US rivals through the imposition of tariffs, paid for by American workers, and all the illegal wars and bombings conducted across the world, the thought of him seizing control of the central bank has sent them into a frenzy.
What is causing them to fear this latest development of Trump attempting to secure dictatorial power over the supposedly independent central bank, is the effect it will have on the US economy.
Trump since his election has been exerting pressure on Powell to slash interest rates in an attempt to return to the days of cheap debt.
Trump represents the interests of those capitalist multi-billionaires who rely on massive and increasing amounts of debt to fuel their speculation in areas such as Artificial Intelligence.
Powell, on the other hand, represents the interests of Wall Street, the banks and major investment companies who have a more cautious approach to cutting interest rates, fearing Trump’s plans to slash them would inevitably tip the already precarious US economy into an even deeper inflationary spiral and recession.
Meanwhile, the value of the dollar fell, and the price of gold hit a record $4,612 an ounce as investors fled the once safe haven of the US dollar for gold and silver, whose price increased by 8%, as they joined the ‘sell America’ brigade.
With the US economy bankrupt and suffocating under the weight of over $38 trillion of national debt, Trump is preparing to seize complete dictatorial control of every last bastion of ‘capitalist stability’ in order to wage a war to the end against American workers and the rest of the world.
Only the working class can put an end to the brutal anarchy of a capitalist system that in its death agony is tearing itself apart and determined to take the working class down with it.
American workers must force their trade union leaders to organise the massive strength of the working class and call mass industrial action to bring down Trump and go forward to a workers government.
A workers government will expropriate the bosses and bankers, building a socialist planned economy.
This is the only way forward.