As U.S. inflation remains high at 8.5 percent in July, Phil Magness, director of research and education at the American Institute for Economic Research, called the deflation law “just a tax-and-spend package,” arguing that it would not reduce inflation.

“[The Inflation Reduction Act] it’s another exercise in Orwellian language,” Magness said. “They are redefining the terms… [it’s] just a tax and spend package.”

President Biden is expected to sign the bill into law tomorrow. The law includes $430 billion in new spending, with more than $300 billion earmarked for climate-related programs. The bill also cuts tax loopholes for the wealthiest Americans and provides more funding to the Internal Revenue Service.

Michael Ashton, CEO of Enduring Investment LLC, said that in times of high inflation, investors should diversify away from the stock market and own “real things” such as farmland, commodities and precious metals.

“Diversify away from stocks,” Ashton said. “They don’t do well in times of inflation. . . . More importantly, you broaden your exposure to real things like land.”

Magness and Ashton spoke with Michelle Makori, editor and lead anchor at Kitco News.

Peak inflation?

Both Magness and Ashton agreed that the US had not seen the end of inflation, despite a slight decline in year-on-year CPI inflation in July.

“[Analysts] we’re reading a month of numbers that have shown inflation is coming down, being overly optimistic without addressing a deeper structural issue stemming from more than a year, possibly even a decade, of mismanagement by the Federal Reserve,” Magness said. “The Fed is still responding to policies they should have considered as much as a year ago.”

In particular, Magness chided the Fed for failing to raise interest rates and pursue tighter monetary policy.

Ashton agreed with Magness’s assessment.

“We’ve had the money supply grow 40 to 50 percent, and prices only 15 percent, so there’s a lot of catching up to do,” Ashton said. “Our forecast is that inflation this year will come in to the mid-six, but will remain in the mid-five for 2023 … While the market seems to believe that inflation will fall quickly to two and a half percent, it will be disappointing.”

Zero percent inflation?

When the CPI data was released on Wednesday, President Joe Biden held a news conference, proclaiming “zero percent” inflation in July, despite an annual inflation rate of 8.5 percent. Biden was referring to month-over-month inflation, which was 0 percent in July.

“This White House intends to fix the economic problems,” Magness explained. “What we saw in the CPI numbers was really just a hedge. Fuel, for example, has fallen very quickly in the last month. At the same time, food and some services and other sectors of what is measured in the CPI continued to grow.”

According to the Bureau of Labor Statistics, energy prices fell 7.6% from June to July, while grocery bills rose 1.4%.

Commenting on Biden’s comments, Ashton said: “If your team hasn’t won a game all season, then you see scoring as a positive. I think something like that is happening here. We got a zero on the headline number… I wouldn’t expect anything more from a politician than to focus on one part of [CPI] that makes him look the best.”

To learn which assets can best hedge against inflation, watch the video above.

Follow Michelle Makori on Twitter: @MichelleMakori (

Follow Kitco News on Twitter: @KitcoNewsNOW (

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided. However, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation for any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage arising from the use of this publication.