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  1. 1. HOW TO PROTECT YOUR ASSETS IN THE COMING INFLATION CRISIS 949-488-9530 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 0 of 8
  2. 2. "The private ownership of gold is a INFLATIONARY CRISIS: privilege, not a right. Congress revoked the privilege of private ownership in 1933 and restored it in 1974. Congress could easily revoke the privilege again. How to Protect Your The Trading with the Enemy Act, which Assets in the Coming President Roosevelt invoked in 1933 to Inflation Crisis restrict private gold transactions, remains law. The government could reactivate the (Gold is One Answer…But Maybe machinery, which the Trading with Not the Best Answer.) the Enemy Act established, to implement gold confiscation." Boston College International and Comparative Law Review 297,320 In Washington these days, “trillion” is the new “billion.” A TRILLION... It’s a number so large you can’t even grasp how many of anything actually makes a trillion: More stars than there are in the sky? More grains of sand than there are on all the beaches of the world? And yet, in a matter of just a few years, the United States Government has committed not to one trillion or two trillion, but eleven trillion dollars of new debt to finance recovery from what President Obama recently called “The Illusion of Market focus has shifted almost completely to the size Prosperity.” and impact of the U.S. fiscal stimulus package currently under construction. Everyone knows the big banks are teetering. I think it will pay off in 2009-2010 to invest under the Everyone knows our core industries are in trouble. assumption that this new government spending will But no one knows how to “stop the bleeding.” debase the U.S. dollar at an accelerating rate. Underlying this mess, we now are printing money I suggest you beat the rush to inflation hedges like gold. at the fastest rate in world history. And what comes to the forefront of every conversation when The Daily Reckoning the current economy is discussed is one word that you must heed if you are to protect your wealth. The word is… INFLATION! 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 1 of 8
  3. 3. A New Tidal Wave of Inflationary Debt Whether or not the out-of-control spending will jumpstart the U.S. economy is debatable, but the inevitable outcome of Washington’s fiscal policies will be a sharp devaluation of the dollar as the world becomes awash in greenbacks. This will manifest itself in the form of inflation, perhaps even hyperinflation, such as that experienced in Latin America in the 1970s. The Coming Boom in Tangible Assets In light of this anticipated inflationary spiral, the vast majority of true economic experts today point to tangible assets as the most certain way to hedge and preserve your wealth. For example, many predict gold will far surpass its historic “adjusted for inflation” high of $2,176 an ounce in the late 1980s—making today’s price of around $900 seem like a tremendous bargain. Many money managers, who have long recommended that investors hold 10% of financial assets in tangibles, have now doubled that number. And leading the way in tangible-asset protection is the venerable yellow metal for the ages: GOLD. But There’s a Problem With Gold. As you shall read in this Special Report, the government can confiscate your gold. They’ve done it before, and they can do it again. So, yes, gold is a fine hedge against inflation—but it may not be the best hedge. In this Report you will learn how history’s most enduring collectible has outperformed gold with no risk of confiscation— and how market forces are lined up to fuel perhaps the biggest run up in the key area of this collectible in its 2000-year history. The collectible area we’re referring to is coins. Rare coins. Not just any rare coins, but a specific segment of the rare-coin market where there is huge pressure on demand coupled with extremely limited supply. As you will learn from these pages, some United States coins—no matter how shiny, how old, and how seemingly historic and steeped in collector value—are, in fact, not rare at all and can be a hazard to your long- term wealth. At the same time, other coins—well-chosen and well- purchased for the right reasons—may be … 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 2 of 8
  4. 4. The Ultimate Hedge Against Inflation Before we talk about coins, however, let’s briefly recap the state of the U.S. economy and where most observers believe we’re headed under the policies of the “spend now and figure out how to pay it back later” administration. Easy Money Undermines the US Dollar To implement spendthrift fiscal policies, the Federal Reserve continues to print dollars in an effort to spark economic activity through easy-money policies that can only serve to further undermine the dollar and sew the seeds of future high inflation. A blatant example of these policies hit home during the week of March 16 to March 21 when the Fed announced that it was commencing open-market operations, which means it plans on increasing the money supply by buying back U.S. Treasury bills, notes, and bonds in the open market. This seldom-used mechanism is the most classic form of literally creating money out of thin air. Not surprisingly, during that week the U.S. dollar saw its steepest weekly fall since the Plaza Accord devalued the dollar back in 1985. Investors beware: This is just the beginning! A Vicious Cycle is Now at Hand. The Fed is working at inflating the U.S. economy with easy money, which serves to undermine the value of the dollar, which in turn results in less demand for the dollar, which in turn sends the value lower still … The cycle described above has obviously spooked the financial markets. Historically, high inflation has been terrible for the bond market as well— and some of the roughest years in the stock market were a result of high inflation. In fact, did you know that the stock market over the past 12 years—based on today’s values—has not outpaced inflation? 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 3 of 8
  5. 5. In the past, investors have been able to turn to real estate as a reliable hedge against high inflation. But, as you know all too well, that’s no longer a safe option. In summation, what we have is an ongoing combination of unprecedented uncertainty and an unprecedented crisis in the dollar. Nobody knows exactly when inflation will hit, how fast it will accelerate, or what the long-term impact of a vastly weakened dollar portends. Inflation has been described as being like toothpaste. It can be difficult to start, but once it breaks loose, it’s nearly impossible to put back into the monetary tube! No wonder that the last serious bout of high inflation lasted from 1973 to 1981, a full eight years. As a result, we’re likely to witness—up close and personal—the worst bout of inflation America has ever experienced. And the coming inflationary crisis might be both more severe and longer than any such episode that has occurred in the past. How To Protect Yourself From the Coming Crisis There is really only one way to protect your hard- “Dollar debasement will doubtless trigger earned wealth in such a scenario, and that is to inflation. Over time, this will cause a buy and own tangible assets—and hold on to them flight from paper currencies to gold. I’ve tenaciously. already predicted gold at $3,000 within 30 months. I’ve heard other gold Gold is an obvious answer. For more than 5,000 analysts forecasting gold at $4,500 years, the value of gold has endured throughout within three years. So there’s a lot of the world—through feast and famine, war and room on the up-side.” peace, boom and bust—in a way paper money never could. Quite simply, gold is money. In Byron King, Outstanding fact, it is more trusted around the world than any Investments, March 2009 other form of money. The economic and fiscal crisis that we are now facing has investment experts predicting new records for gold in the months and years ahead. “I served on the Gold Commission for eight or nine months in Congress, along But Isn’t Gold Near Its All-Time High? with fifteen other members. I brought up the subject of gold confiscation. Some misinformed observers look at gold’s current price of over $900 per ounce and see a commodity The power to confiscate gold is still on trading within 10% of its all-time high. But that the books as the law of the land. I urged picture is very misleading. the full Commission to recommend to Congress that we never again In real, inflation-adjusted dollars, the contemplate taking the gold of the all-time high for gold was actually American people. $2,176—and we fully expect gold to exceed that level in the hyperinflation- The fifteen other members voted it down. driven bull market that has been set in The power is still there on the books, and place by a tidal wave of government they can do it any time they wish.” spending and the voracious printing of money by the Federal Reserve. Rep. Ron Paul Of course, no one has a crystal ball, but it is irrefutable that gold should serve as an important element in your financial foundation. 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 4 of 8
  6. 6. A Better Inflation Hedge Than Gold? Although most investors should own some gold, gold may not be the best inflation hedge in the years to come. Many prudent investors hold gold bullion for insurance or security purposes—a sort of hedge against crisis, inflation, and uncertainty. Gold has served in this role for thousands of years, but laws created by governments that have grown too big put this role in doubt today. Therefore, investors need a better hedge. Gold Confiscation: Can It Happen Again? Leading financial institutions collapsing. The value of the dollar in a freefall. Gold prices are soaring. These are the same the circumstances that led to the gold confiscation of 1933 The U.S. has had bans against, or financial disincentives for, the private ownership of gold in the past. This is one reason why the U.S. Government has reporting requirements for bullion transactions. In fact, America has actually seen four different gold confiscations, the last of which occurred during the Great Depression in 1933. From 1933 until 1974, U.S. citizens could not legally own gold. However, what few people realize is that when the freedom to own gold was restored in 1974, a provision of the Federal Reserve Act was retained that permitted the Secretary of the Treasury to require individuals to surrender their gold. The President’s gold This action would most likely be started by an Executive confiscation order Order from the president. Nothing in the legislation that specifically exempted “gold ended the forty-year ban against gold ownership changed coins having a recognized the fact that Congress continued to treat the private special value to collectors of ownership of gold as a privilege to be enjoyed at its rare and unusual coins.” discretion rather than as a right. In 1933, in an attempt to control the monetary and banking crisis associated with the Great Depression, President Franklin D. Roosevelt, with Executive Order No. 6102, confiscated all privately owned gold in the United States. Gold confiscation was undertaken in the name of stabilizing America’s monetary system. Today, if it becomes necessary for the U.S. to bolster a collapsing dollar with gold, the Treasury no longer has enough gold to accomplish the task. When gold bullion was confiscated, the government compensated individuals with paper currency at the then official gold price. How would you like to accept a grossly devalued dollar, next year or the year after, when the government needs your gold? 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 5 of 8
  7. 7. A Crucial Exception To The Confiscation of Gold However, rare coins (defined as “coins having a recognized special value to collectors of rare and unusual coins") were exempt from government confiscation provisions, not due to any love of coin collectors, but because determining appropriate compensation, coin-by-coin, collector-by-collector, would have been an administrative nightmare and logistical impossibility. Twelve words provided the defensive blockade for coin owners: "nor shall private property be taken for public use, without just compensation." Since the confiscation of rare gold coins would be taking private property, “just compensation” would have to be paid. In other words, while it is relatively easy to confiscate gold, it is virtually impossible to confiscate rare coins. Not only do applicable laws expressly exempt rare coins from gold confiscation provisions, rare coins are private and do not require the filing of information returns with the Internal Revenue Service, as does gold bullion. RARE COINS: The Better Safe Haven That’s why, in times of crises such as hyperinflation or depression, it is far better to own numismatics—that is, rare coins—than gold bullion. To understand why this is so, you need to understand the market forces behind history’s most enduring collectible. Then, we will describe what we believe is the best possible way to invest in coins. And it’s not just our “opinion.” Our company actually owns more than $40 million worth of the precise kind of coins you need to own, that is, if protecting your wealth is of importance to you. Why Rare Coins? Because numismatic coins are not a fad. On the contrary, they’ve been collected for more than 2000 years. Because coins represent the very embodiment of the economic miracle America has brought to the world, they are a much sought after artifact of history. Because 100 million Americans collect coins, and there is constant upward pressure on the high end of the rare- coin market—where demand keeps growing and there simply are not enough coins to go around. 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 6 of 8
  8. 8. Well-chosen rare coins also offer a number of other advantages, in addition to protection from gold confiscation. In fact, high-quality coins are a “win-win-win” for investors today: Win #1: If inflation hits and the above scenario plays out, rare coins will outperform gold, just as they have over the past 35 years*, and they will not be subject to confiscation. Win #2: If by some miracle the Big Federal Inflation Budget (The Big FIB) turns the economy around and we return to unbridled prosperity, America’s 100 million coin collectors will drive up the prices of the most sought- after rarities. Win #3: Even in the worst-case scenario, where we lapse into a deflationary depression, wouldn’t you rather have your wealth preserved in an enduring, historic asset until normalcy returns? Rare coins have a history of providing handsome returns in virtually all periods of economic growth—inflationary and otherwise. This has been proven by an authoritative study conducted by Dr. Raymond Lombra of the economics department at Penn State. In his study, Professor Lombra examined the performance of various investments, including gold bullion and rare coins, over a quarter century, ending in 2007. Here are some of the conclusions in his study: During the 25-year period studied, rare coins were a better diversifier than gold for a portfolio of stocks and bonds. Rare coins achieved substantial gains even during periods when the price of gold fell. For example, from 1988-1990, rare coins appreciated more than 100%, while the price of gold fell from $500 to $360. The average annual return from rare coins was over 200% better than the average annual return on gold. The total return from rare coins in their best year was nearly 100% better than the return from gold in its best performing year. The total return from rare coins in their best three-year period was almost 100% better than the return from gold in its best three-year period. In fact, if history is any judge, the biggest question when it comes to the long-term performance of well-chosen rare coins is: 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 7 of 8
  9. 9. …What rare coins should you buy, and who should you buy them from? The time to act is now. Rare Coin Wholesalers lives up to its name. We are not consumer marketers of rare coins. We are not middlemen—we are the source. We are far more interested in long-term relationships than in high transactional markups. We will trade with new investors on the same terms under which we trade with coin dealers and sophisticated collectors. We are one of only a small handful of inside traders in the rare-coin industry that maintains an extensive inventory of the finest rare coins in the world. We have done all the hard work of acquiring the best possible investment-quality coins—and, to prove it, we own a $40 million dollar inventory of the world’s finest coins! Knowing the differences between rare coins and gold can help you protect your wealth and increase your opportunity for profit. And dealing with the right rare coin dealer —acquiring the right coins at the right price —is the absolute key to your success in this field. Now is the time to begin building and diversifying your tangible asset portfolio. If you already have extensive gold and silver holdings, you can quickly and privately convert a portion of your bullion to rare coins. We urge you to begin today. FOR MORE INFORMATION ABOUT THE RARE COIN MARKET, PLEASE CALL RARE COIN WHOLESALERS AT 949-488-9530. 949-488-9530 949-488-9530 © 2009 Rare Coin Wholesalers, All Rights Reserved Page 8 of 8