A Publication of Austin Rare Coins

Years of Super-Inflation Coming
Every Investment You Own is About to Change in Value

Every person reading this article is feeling the pinch of inflation– food and energy cost more while traditional investments are increasingly volatile and risky to own. At the heart of the problem is persistent monetary inflation by the Federal Reserve. The ongoing increase, out of thin air, of the U.S. money supply, including debt creation to cover banking crisis losses, is straining the world's financial system and about to wreak havoc on stock prices and bonds.

The arm and leg we're paying at the gas pump today is a reflection of commodity inflation, a direct result of the almost doubling of the U.S. money supply over the past eight years. Not since the Jimmy Carter days of the 1970's have Americans faced a battle against an economy like this– oil inflation that's driving the country into a recession.

On top of stagflation there is an on-going and massive creation of paper money in an attempt to save the world's banking system from the sub-prime mortgage crisis. In our opinion–

The coming inflation and Super-Inflation spiral
threaten to change the value of every investment you own.

Inside this Austin Report we explain why Fortune magazine calls inflation "The Retiree's Worst Enemy." We'll also show you several ways you put inflation to work in your portfolio to make you more money and help avoid losses from traditional investments.

Critical Point in American History
On July 15th the Producer Price Index showed the annual inflation rate topped 9.2%. Wow! Finally, even the U.S. government's shady inflation figures document that inflation is near Super-Inflation levels of 10%. We first alerted Austin Report readers in January of 2007 that a convergence of world events would force the Federal Reserve to flood the world with paper dollars. Inflation always begins when a country increases its money supply– and the U.S. has been on a reckless government spending and borrowing spree that defies explanation.

*** For the past decade, our economy has been based on consumer borrowing and spending, soaring levels of corporate, public, and private debt and government spending that will end in a decade of inflation that will make the 1970's look like the good ol' days.

We warned that inflation was coming, be prepared, buy Gold and Silver. We're proud to say Gold is up 52% and Silver has soared 45% since January 1 of 2007. We stand by our early inflation warnings and expand them in this report. The pain of rising oil prices along with food and commodity inflation act as a cruel tax on everything you buy and on every investment you own. While there's still time, we urge you to build a fortress of safety to protect your wealth from the long-term destruction of inflation. Inside this report we will show you several ways to profit from the coming tsunami of inflation.

IMF Warns of Rising Inflation Worldwide
One look at the gas pump or grocery prices shows us inflation has arrived with a vengeance! Inflation has just begun to drive the U.S. economy into a recession. SUV, truck, and automobile sales have come to a screeching halt. Corporate giants face slowing worldwide sales and falling profits– and this is just the beginning! The worst inflation is years away– and no one can stop it.

The Federal Reserve is in a tight spot to stop inflation. They desperately need to raise interest rates to slow inflation and strengthen the Dollar. But if they do, this would push the economy into a full-blown recession. Neither of these is the most pressing problem as Bernanke told Congress his first concern is the emergency banking crisis. In other words, we'll deal with inflation later (after it's too late).

Money creation by the Fed, which is the root cause of all inflation, continues at an alarming pace. It's obvious Ben Bernanke will go to any lengths necessary to bail out the failing banks from the sub-prime mortgage crisis. To save their banking buddies, the Federal Reserve is dumping in all the new money and credit it can generate to prevent an all-out crash of the nation's banks and brokerage firms. Whatever it takes to save Fannie Mae and Freddie Mac from an implosion, will be done regardless of the inflationary bubble they create.

Because of the reckless way that paper money has been created in recent years, inflation is about to become our worst nightmare.

The International Monetary Fund just warned world leaders they're very concerned with inflation
that has emerged as a major threat to the global economy ahead of the financial crisis and growth.

High prices at the gas pump, free-falling stock prices, and unfolding revelations of failing banks due to the Sub-Prime Mortgage Crisis weigh heavily on the value of traditional investments. The price of stocks, bonds, and homes are falling while few investments are left to replace the losses. The negative news is simply overwhelming. Banks have lost billions, perhaps a trillion dollars, many are insolvent and depositors found out in July with the closing of the IndyMac bank, the fifth bank and the largest so far, to be taken over. The most shocking disclosure was that 10,000 bank customers held over $1 Billion Dollars that was not FDIC insured! Apparently, even your money in the bank is no longer safe.

The same week, we learned Fannie Mae and Freddie Mac mortgage companies needed billions in a huge taxpayer bailout. The Treasury Secretary and the Federal Reserve have initiated a bailout plan to rush through Congress. The end result is a coming creation of paper money on an unprecedented scale. Without a doubt, this plan threatens to destroy the buying power of the U.S. Dollar and send inflation back to 1970's levels which topped out at 14.6%. With the PPI at 9.2% early on in this crisis, no doubt the worst inflation is yet to come.

Bubble Driven Housing Economy Goes Bust
To date, inflation has already done severe damage in the home building industry. Back when the Federal Reserve lowered interest rates to historic lows, they also created a massive housing bubble that artificially inflated home prices. Home prices in California doubled in some areas. In the end, the consumers rushed to buy homes they could not afford at the highest prices in history.

Loose money created inflation and drove up prices of homes, real estate, and stocks. The economy appeared to be booming. Consumers felt great-- that is until the inflation bubble burst in housing. Today home prices are in a free fall and bank repossessions are rising.

Since the spring of 2006, about $3.5 trillion in homeowner equity has been wiped out completely.

Stock prices were also inflated as massive liquidity continues to prop up stocks in face of stagflation and fear of a recession. We feel recent stock volatility comes from the injection of newly created money into the U.S. economy to save the banks. Sadly, this leaves millions of unsuspecting Americans overly invested in an inflated U.S. Stock Market. The stock bubble is slowly bursting and the Feds won't be able to keep the stock markets propped up forever.

As long as the U.S. economy was sustained by cheap oil and cheap money (often fraudulent mortgages), the future of stocks looked bright. Now things have completely changed. As the housing bubble bursts, banks are caught in the middle. Despite efforts to rah rah the market, the banking industry is in the middle of a disaster unlike anything we've seen since 1929.

Banks, financial institutions, Fannie Mae, and Freddie Mac are stuck with millions of homes in foreclosure and fewer qualified buyers. We urge our readers not to be deceived into thinking that the worst is over for the mortgage and banking industry. In addition to the sub-prime mortgage loans having problems, suddenly "PRIME" mortgage loans are not being repaid.

THE BANKING CRISIS WILL GET WORSE
• We just learned there are now 431,000 PRIME loans in foreclosure through June.
• Overall, U.S. foreclosure filings rose by 53 percent in June from a year earlier.
• Nearly 3 million home loans have missed at least one payment.
• Sadly, with prices falling, one out of every four homeowners is expected to be underwater by next year.

A-1 loans are considered to be banks' "prime loans." But just like the sub-prime borrowers, the prime borrowers are hurting from the inflated price of gas and food. Now, they face adjustable rate mortgage resets and spiking loan payments in the next few years. Worse than that, some borrowers have "interest only loans" and must start paying the principal on their loans as well as the interest.

We're afraid there's a second wave of problems behind the sub-prime foreclosures that may act as a tsunami to the banking industry. On top of the unprecedented increase in the supply of U.S. Dollars already underway, these warning signs suggest there will be a growing need for liquidity for years to come. That means more and more money creation-- and that virtually guarantees higher inflation is coming.

Massive Increase in Paper Money Creation Continues

The combination of the flood of new money from both developed nations and emerging nations virtually guarantees inflation. Gas prices and food prices will continue soaring to high levels due solely to monetary inflation. The U.S. is the worst offender. Here's one way to understand the size of the growing money Americans face:

“From 1620 to 1974, it took the U.S. Government 354 years to create
the first $1 trillion paper dollars in circulation. It only took 300 days to create the last trillion dollars of paper money.”

No country on Earth has ever created so much debt in so short a period of time. No country has ever dumped so much monetary inflation on the world to digest.

The Inflation Blur
Government economists have done a marvelous job of trying to refine and confuse Americans about inflation. After the last bout with up to 14.6% Super-Inflation after the 1970's, Congress changed how to measure inflation. They eliminated the two worst offenders from the CPI (the headline consumer price index.) This simply removed both energy and food costs from the "official" inflation index. What a scam! Politicians then reduced the payments to welfare and social security recipients, cheating them out of billions of dollars each and every year.

The Austin Report defines inflation for consumers as "a general rise in the prices of goods and services, resulting in a fall in purchasing power. Wikipedia status the cause of inflation quite succinctly,

"Economists agree that high rates of inflation are caused by high rates
of growth of the money supply."

Sadly, the U.S. economy (and the Stock Markets) in recent years have become addicted to high rates of growth of the money supply. While many people are living with the illusion of prosperity, they know for a fact that there's less money left over after they've paid the bills thanks to high food and energy prices. That has left America living on borrowed money and borrowed time.

The Coming Day of Reckoning
But now there's a day of reckoning coming and it will affect millions of households. Cheap, easy money that got us into the banking crisis in the first place will now leave us with bubbles bursting in housing and years of inflation in other sectors. The combination is an economy killer.

Today, investors find themselves surrounded by unsound banks on every corner. We're stuck with a weak U.S. Dollar, falling bond prices, and falling stock prices. Few investments can thrive in this environment, Gold is one of them. In the squeeze since 2000, Gold has stood its ground as an inflation-fighter. In the past year, Gold soared past $1,000 an ounce in the flight to safety. Even after the drifting period of consolidation this summer, Gold is still up in value over 40% in the past year.

What Is the Real Inflation Number?
The government's phony inflation numbers make it hard for anyone to get a handle around inflation. Claims that U.S. CPI inflation was below 4% in June insult our intelligence. One look at the gas pump or trip to the grocery store makes 4% look silly. We hope you can see through the government cover-up and deceptive "headline" CPI inflation figures that exclude energy and food inflation.

In an effort to get down to the truth, we found an alternative inflation chart from John Williams' website ShadowStats.com. Like us, he's been dumbfounded by the government's decision to exclude food and energy from the inflation index. He chose to track inflation using the historical method. Using the SGS data, the average annual inflation since early 2006 has been well over 10%. Wow!

June 2008 inflation stands at 12.59%. The difference between the government's 5% CPI and the SGS over 10% number is huge.

Using the government's inflation, we should all be happy earning 5% on bonds and CDs. If today's real inflation number is 12.59%, then we deserve to be compensated with 12% interest at the bank– three times today's rates.

No wonder it feels like we're being manipulated and aren't getting ahead! Investors planning for retirement will actually lose over 12% of their buying power to inflation this year alone.

Retirement Funds Can't Keep Up
The effects of long-term, high inflation destroys far more wealth than most of us realize.

Let's say you're about to retire. The last three years of SGS data show inflation over 10% each year. If these number are correct, 30% of the buying power of your retirement savings has been wiped out already-- unless you invested in Gold and Silver.

Bonds or CDs paying 5% give you no chance whatsoever of catching up to the losses from inflation. Even if stocks were rising 10% a year, you'd still be losing money because the government makes you pay taxes on your capital gains. Consider this simple fact:

If inflation is over 12% this year, then you need your investments to grow faster
than 12% just to stay even and maintain buying power.

But with the U.S. economy weak and probably in recession, here are the investment choices the Federal Reserve has left us with.

First, the government imposes an "inflation tax" on everything we own. Then, they lower interest rates from 5% to 2%. The economy reels from stagflation and stock prices fall due to fears of a coming recession. Where does that leave investors? Traditional investments perform well only in a strong economy with low inflation. In times of rising inflation, commodities, Gold, and Silver will prove to be the most rewarding investments– as they have been since late 1999. If you believe we have a strong economy and no inflation, then hold your investments in stocks and bonds, if not then you absolutely must allocate a portion of your portfolio into commodities including Gold coins and Silver coins.

More Inflation is Coming
As the truth about inflation over 10% sinks in, investors will be rushing to the exits to save themselves from what may well be a long period of Super-Inflation exceeding 10%. They will continue to sell stocks during the coming recession. They will dump bonds and surely seek out safe haven investments. Around the world, a quiet flight to safety is underway. The rush into commodity markets, Gold, Silver, Platinum, and other real, tangible hard assets are proof of that trend. Even if oil falls back to $100 a barrel next week, inflation has already done its damage. Three persistent years of inflation, the banking crisis, and the crashing U.S. Stock Markets have destroyed a vast amount of wealth.

Even when Congress and the Federal Reserve created more money by dumping $168 Billion Dollars into a stimulus package and sending out checks to voters, nothing was stimulated. The only thing that went up was the national debt and inflation.

If you are feeling like just about everything that could go wrong with the economy, is going wrong, then you may be ready to get out of harm's way. It may be time to sell some stocks and bonds. You're also probably ready to own more Gold and Silver to get your portfolio more balanced and diversified. If you wait and do nothing, Super-Inflation may wreak havoc on your retirement plans, so be careful.

Anyone who lived through the 1970’s knows that a long, grinding period of high inflation
changes the value of every asset you own.

When you get ready to retire, your dollars will buy less gas and less food. Sadly, you can’t earn enough interest to overcome rising inflation. In bad times, bonds are more risky to own, stock prices crater, bankruptcies rise, and unemployment soars.

"Under the Gold standard, a free banking system stands as the protector of an economy's stability and
balanced growth... The abandonment of the Gold standard made it possible for the welfare statists to use
the banking system as a means to an unlimited expansion of credit... In the absence of the Gold standard,
there is no way to protect savings from confiscation through inflation."

-----Alan Greenspan Former U.S. Federal Reserve Chairman

We find it noteworthy that the man who disdained expansion of credit in his youth was the single person on the planet the most responsible for adding Trillions of Dollars to the U.S. Money Supply and thereby setting inflation lose on the world.

Where Should Investors Turn Next?
By now, you're wondering how to defend your portfolio from high risks and losses to inflation. If you're heavily invested in U.S. Stocks, you've probably lost 15% to 25% this year and you're ready to kill your stock broker. We understand how you feel.

Thankfully, there are alternative investments and alternative forms of money that exist that have proven to be immune to inflation. No one can create this kind of money out of thin air. The world simply cannot be flooded with an over-supply of this type of money. Historically this alternative money has always increased in value during a financial crisis. Sadly, every paper money in history has failed, given enough time.

The Coming Flight to Safety
We believe that most people trust their stock brokers. They feel ok with their mutual funds and have been willing to ride out the storm during the sub-prime mortgage crisis. Despite the loses and wild stock price gyrations, most people hang on to their stocks. Why, I don't know.

We can only conclude that stock corrections of 10% or more have become all too common. Very few people realize how much money the White House plunge-protection team and the Federal Reserve have dumped into the U.S. Stock Markets to keep them from crashing in recent years.

Each ensuing crisis requires more money creation than the last crisis. Each attempt to tinker with the markets has increased the risk even more. We warned our readers that there appears to be no end to how much money the Federal Reserve can print and electronically distribute to their banking buddies. The final result is inflation confiscating your life savings through a permanent loss of buying power.

We fear that the day of reckoning is at hand for stocks, bonds, and the U.S. Dollar...
The way we're headed it's only a matter of time now before we destroy the world's reserve currency.

In the coming flight to safety, more and more money will be seeking safe havens like Gold and Silver. We believe more and more money will be fleeing banks that are fraught with systemic risk. Savers will wise up to FDIC insurance and make sure they're careful to hold no more than $100,000 in an individual bank account. As we explained, every dime in the bank over $100,000 may be at risk. In the coming weeks, we

see people reviewing their bank statements very carefully.

Millions of Americans are heading down to their banks and moving money out of harm's way. If you'd like to convert some of your paper money into Gold or Silver Coins, it takes less than five minutes for us to explain the process. Call us today at 1-800-928-6468. Be sure to insist on private, non-reportable coins.

High Returns Still Ahead
While precious metals and commodities have enjoyed a huge run-up in recent years, the best may be yet to come.

Jim Rogers documents that the last three commodity bull markets lasted an average of 15 years. If we date this latest run to 1999, we have a long way for Gold and Silver prices to rise. The past year's gains of 42% for Gold and 37% for Silver are what you need to beat inflation and actually increase your buying power for the retirement years. Beware of stocks! For most of us, we don't have the time to recover from a long-term bear market in stocks. The 18%-20% declines since last years highs are unacceptable to most of us.

Historically, Gold and Silver have proven to be excellent financial weapons to fight inflation.

Precious metals typically respond to the unexpected, sharp increases of both the fear of inflation and to rising inflation itself. Because Gold and Silver have supplies that cannot be increased dramatically through mining, they react rather quickly to increasing investor demand. They're also the best insurance against a falling U.S. Dollar which will continue long-term if we flood the world with paper money.

We believe that it won't be long before Super-Inflation levels of 10% ripple around the world. Things will get really bad when inflation comes back to the U.S. in the form of higher prices on imported goods. During each crisis we've faced, precious metals have performed extremely well. The total rise from the 1999 low of $255 to the recent high of $1,011 is an amazing 295%. The average annual increase for the price of Gold has exceeded 31% in the 21st Century. Silver has surpassed even Gold’s amazing performance.

Considerations When
Buying Silver or Gold Bullion

• Are these coins recognized worldwide as official legal tender?

• Is the Gold or Silver content and weight guaranteed?

• Will these Gold Coins always be worth their weight in pure Gold?

• How can I make sure I buy only private, non-reportable Gold Coins?

• In diversifying, how much Silver makes sense?

• Should I consider Gold Coins minted before 1933?

• Will anyone at your firm report my purchases to the government?

• Does the seller have the stability to buy my coins back later?

• Are certain coins specifically exempt from U.S. confiscation laws?

• Will these Gold and Silver Coins be easy to sell later?

Gold is Money, Silver is Money
The case for holding precious metals has never been clearer. For thousands of years, Gold and Silver have been used as money. Even the U.S. Treasury used Silver coins through 1963. We were on the Gold Standard through 1971.

In a flight to safety, Gold and Silver provide a storehouse of wealth. In a crisis, the demand for physical Gold and Silver coins can often outpace the limited supply causing prices to go up quickly. We've seen this trend happen again and again since this bull market started in late 1999 or early 2000.

One reason to buy Gold and Silver today is that prices are typically soft in the Summer. Prices are still well under the recent highs of earlier this year when there were long waits for Silver coins and very tight Gold inventories. By ordering today, your precious metals can be delivered quickly into your hands in a variety of forms-- bars, foreign coins, U.S. Mint coins, and Pre-1933 Gold Coins that are generally considered to be exempt from confiscation.

Don't Wait, Time Could Prove Costly.
Today, you still have a choice to convert paper money sitting in the bank into Gold or Silver. Yes, it’s perfectly legal today to hold money in the preferred form of Gold coins or Silver coins. You can write out a check and buy locally in our Austin offices. Or you can wire money to us and buy any quantity of Gold or Silver from $5,000 to a million dollars or more.

At Austin Rare Coins & Bullion, it's simple to do business with us. There are no forms to fill out, no applications, and no hassles for you to buy precious metals from Austin Rare Coins & Bullion. One phone call to 1-800-928-6468 from 9am to 9pm central time and we’ll answer all your questions. Our Gold and Silver Specialists are on call seven days a week.

A Firm You Can Trust
Our firm was incorporated in 1989 to serve investors, collectors, and fellow rare coin dealers. In all that time, we've had no outstanding complaints with the Better Business Bureau or BBB Online. We take great pride in having an experienced management team who knows the precious metals and U.S. rare coin business. While we often buy, sell, and trade extremely rare coins valued in the hundreds of thousands of dollars, we also have Gold and Silver Specialists who handle orders of $100 to $10,000 by phone every day of the week.

When you call us, we will gladly take to the time to walk you through the process. We promise to cheerfully and helpfully answer your questions and guide you to the specific coins that will best serve your needs. Together, we will put together a selection of carefully chosen Gold and Silver Coins that we feel will provide you with the best safety, security, and long-term inflation protection.

Questions? Call a Gold Specialist at 1-800-928-6468 seven days a week 9am till 9pm central time.

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Serving Investors & Rare Coin Collectors since 1989
7200 North Mopac • Austin TX 78731

Disclaimers: Austin Rare Coins & Bullion has prepared information on this site for the private use of our readers. It should not be taken as personal financial advice. The information herein is obtained from a variety of sources that we believe to be reliable, but we cannot guarantee the accuracy or that information has not been condensed or may be incomplete. All opinions expressed by the editors of The Austin Report and those expressing opinions are subject to change without notice. We are not financial advisors. The information about future predictions, projections, or financial advice could prove to be unprofitable. This firm is specifically in the business of selling Gold, Silver, platinum and rare coins to the public and offers its opinions from that viewpoint. We generally make available news and opinions that relate positively to our markets and do not seek to present a balanced view of the investment markets. We advise that you seek out information from a variety of news sources before making any investment decisions. It’s important to always remember that past performance is no guarantee of future value. These products may not be suitable for every individual as the value of Gold, Silver, and rare coins go down as well as up in value.