Get Ready for Big, Beautiful Inflation

As is the case with many new regulations, the 2022 Inflation Reduction Act (IRA) had the opposite effect as what was implied by its name. President Trump campaigned on reducing inflation and bringing down prices.

But with major changes to the IRA now sealed into law under the banner of Trump’s “Big, Beautiful Bill” (BBB), what Americans are left with is an expansion of the money supply. That’s good news for gold, but terrible for American savers.

The updated bill guts some of the green subsidies and introduces new tax incentives, infrastructure spending, and targeted manufacturing credits. It’s been sold to the American people as economic stimulus, but it’s actually just deficit spending dressed up as nationalism.

Trump’s BBB increases federal spending without corresponding cuts. It’s paid for not by taxation or productive growth, but by borrowing. And that borrowing is increasingly being monetized, whether directly or indirectly. That means more Fed balance sheet expansion, and ultimately, more dollars in circulation.

The BBB means more deficit spending, which means more inflation. When the government spends money it doesn’t have, and the Fed accommodates it with rate suppression or asset purchases. The end result of Fed policy, on a long enough timeline, is always larger money supply. A larger money supply is the textbook definition of inflation, and higher prices for consumers are the result.

More borrowing, through Treasury issuance, expands the money supply. When the Federal Reserve purchases these securities or banks lend against them, more dollars enter circulation. An influx of dollars chasing the same or fewer goods leads to higher prices. 

The 2017 Tax Cuts and Jobs Act added nearly two trillion to the debt over a decade, and the BBB is even broader. This will amplify the effect, driving inflation higher.

Despite the rhetoric of “bringing manufacturing back” or “rebuilding America,” this bill isn’t about genuine economic growth. It’s about short-term political gain funded by long-term monetary erosion. Average Americans and savers are the ones who will pay the price.

Price pressures are picking up again. Commodity markets are signaling real inflation that’s not yet reflected in the CPI. Gold, silver, copper, steel, palladium, lead and other metals spiked. This tells the story that the government and Fed are unwilling to tell. 

Metals are spiking today. Silver is up 1.4%, platinum is up 5%, palladium is up 4.7%, copper is up 2%, steel is up 2.5%, zinc is up 1.5%, and nickel and lead are up 1%. Surging commodity prices signal that inflation has heated up. That means hotter CPI numbers are coming soon.

— Peter Schiff (@PeterSchiff) July 2, 2025

While gold bullion dumped today, silver rapidly recovered, and copper went full hockey stick in the face of new Trump tariffs. Higher commodity prices happen as a result of real inflation, which means higher CPI numbers are on the way.

Silver 1-Day Chart

Any significant rise in CPI will cause an outcry, but the Fed can’t raise rates aggressively without detonating the budget or tanking markets. Politics and status quo monetary policy incentivizes them to lower rates as soon as possible, not keep them higher. In a free market, rates would be drastically higher. But right now, there’s no shortage of political pressure for rate cuts that will only make inflation even worse. 

This is the inflationary doom loop. High government spending pushes prices up, creating economic pain and political pressure. That leads to monetary easing, which then makes the same problem even worse

Gold tells the true story that the Fed is again backed into a corner. Real interest rates remain negative when you account for future inflation. That makes gold not only an inflation hedge, but a rational alternative to fiat itself. As Trump, Biden, and many before them have shown, whoever sits in the White House, the printing press is a permanent feature of government.

Wall Street can profit from whatever levers the Fed pulls, and meanwhile, Washington gets the never-ending free money they need to fund endless wars, hollow promises, and bloat. The victims are ordinary Americans as every new dollar created erodes the value of what little people have saved. Savings accounts and salary wages earn less than inflation. And retirement dreams are quietly destroyed by the invisible tax of debasement. 

If you price major stock indices in terms of gold instead of dollars, they’ve been basically flat for decades. Trump may claim to support the working class, but the BBB quietly drains their purchasing power while handing out subsidies and pork to corporate allies and political donors. It’s inflationary populism. And like all populism funded by money printing, it ends in economic decline.

Both the GOP and Democrats claim their spending is “investment” and justify it as “stimulus.” But it ends in stagflation. Sluggish growth, rising prices, declining real wages, and a central bank with no way out of its own mess.

The Fed will soon be in a bind, as both unemployment and inflation are about to jump to much higher levels. My guess is that political pressure will lead the Fed to cut interest rates to fight rising unemployment. This will not only exacerbate inflation, but unemployment as well.

— Peter Schiff (@PeterSchiff) July 2, 2025

The CPI will likely rise again in the coming quarters while the Fed, under pressure to support growth and help refinance the government’s exploding debt, will respond by cutting rates. That will pour gasoline on the inflationary fire. In the meantime, gold and other real assets will continue their ascent. The dollar will weaken, not necessarily on the DXY index, but in terms of its domestic purchasing power.

Trump’s “Big Beautiful Bill” continues the bipartisan trend of mortgaging our future to prop up the present. And the ultimate cost will be paid not by the political elite—but by savers, retirees, and anyone trying to build wealth honestly. But in a simultaneous pseudo-populist inflationary grift, the Invest America Act will start gifting $1,000 worth of S&P 500 stock to newborns in 2026. Not only is this “gift” funded by other people’s money, but will artificially juice the stock market, stealing from Americans to make it look like the economy is healthier than it really is. Funding corporate stock purchases with taxpayer money is about as “socialist” as it gets.

The irony is that Trump criticized Biden’s policies and is now embracing inflationary strategy under a new name, proving that robbing Peter to pay Paul isn’t a partisan issue. It’s a systemic one, and gold is the only real exit.