1. Surfing the
inflation tsunami
It’s coming! Will you run, hide or learn to surf?

2. David Campbell
Former high school band director
Self-made multi-millionaire
Professional investor
Real estate developer
Real estate broker
Real estate & business advisor
Financial mentor
Over $500 million of real estate experience
Houses, condo-conversion,
multi-family, winery,
Resort, office, retail,
California, Texas, North Carolina,
Mexico, and Belize

3. Husband
Father
Musician
Regular guy

4. Tonight’s Agenda
What is Inflation and Quantitative Easing?
Who is responsible for Inflation?
Who benefits and who loses from Inflation?
How do you and your family protect and
maybe profit from Inflation?

5. There ain’t no such thing as a free
lunch!
• David Campbell owns a real estate
development company and works
extensively with investors.
• Mike Piromgraipakd sells gold

6. What is NOT
on Tonight’s Agenda
Nothing for sale
No MLM
No close

7. no investor
left behind

8. Fiat Currency

9. What is Inflation and Quantitative Easing?
Inflation is an increase in price as a result of
the increase in the supply of currency and/
or the increase in the velocity of money.
Quantitative easing is an increase in the
supply of currency while attempting to
keep prices low by reducing velocity.

10. Inflation is NOT increased demand

11. Inflation is NOT scarcity of goods
INCREASED LIFESTYLE = INCREASED CONSUMPTION

12. INFLATION FROM
PRINTING

13. INFLATION FROM: VELOCITY OF MONEY
TOTAL CURRENCY:$200

14. Velocity of money
BUYS: SELLS:
$100 COWS $100 COWS
SELLS: TOTAL EXCHANGE: BUYS:
$100 CORN $400 $100 CORN
BUYS: SELLS:
$100 COWS $100 COWS
SELLS: BUYS:
$100 CORN $100 CORN

15. Who is responsible for Inflation?

16. Debt
Inflation is an Economic “Solution” for
O v e r s t r e t c h e d
Governments

18. $13.6 Trillion

20. 201 US GDP IS $14.66 TRILLION (CIA FACT BOOK)

21. THE PRESIDENT'S AMERICAN RECOVERY
AND REINVESTMENT PLAN
ly !
years.
p p
Doubling the production of alternative energy in the next three
s u
e y
Modernizing more than 75% of federal buildings and improve the
energy efficiency of two million American homes, saving
n
consumers and taxpayers billions on our energy bills.
o
e m
Making the immediate investments necessary to ensure that within
five years, all of America’s medical records are computerized.
a s
re
Equipping tens of thousands of schools, community colleges, and
public universities with 21st century classrooms, labs, and
In c
libraries.
#1
Expanding broadband across America, so that a small business in a
rural town can connect and compete with their counterparts
ob anywhere in the world.
J Investing in the science, research, and technology that will lead to
new medical breakthroughs, new discoveries, and entire new
industries.

22. WHAT HAS INFLATION BEEN DOING IN THE
UNITED STATES OVER 100 YEARS?
WWI
WWII
VIETNAM IRAQ

23. Where is current velocity?

24. What will happen to velocity/
inflation when consumer sentiment
returns?

25. What is happening to money supply?

26. US vs China money supply 2008-2010

27. 2008
INFLATION
AROUND THE
WORLD
2009

28. FEBRUARY 21, 2009
South Carolina Governor, Mark Sanford, the
head of the Republican Governors
Association... fears that excessive
government borrowing to fund the stimulus
could lead to an inflationary spiral to rival
Weimar Germany's.

29. John Hathaway,
Portfolio Manager and Senior Managing Director
the Tocqueville Funds
“The unstated objective of government
economic stimulus would seem to be currency
devaluation. Success will be defined as inflation
that alleviates debt burdens to a degree
sufficient to rekindle the appetite for risk in the
private sector. Since nobody knows in advance
how much inflation is required, it is more than
likely that policy makers will overshoot their
objective. The results could well be of
Weimar proportions.”

30. N1923
TIO NI
NF LA HIT
O FI MA NY
RA T E
GE R ON TH
THE R
IMA 0% PER
M
WE 0 DAYS
,25 0,0 WO
3 00 YT
EV ER
BL ED
SD OU
PR ICE

31. Who benefits and who loses from Inflation?

32. Who benefits from inflation?
Borrowers
Trade Deficit Governments
Deficit Spending Governments
Liberal Governments
Arbitrage Lenders - Institutional Banks

33. Government
advantages to inflation
hidden form of taxation
100% tax on interest income OR inflation?!?!?
reduces real cost of government’s debt
creates short term / misguided feeling of prosperity
gives government unlimited discretionary spending

34. Government
disadvantages to deflation
increases real cost of government’s debt
if it will cheaper to buy next month, no one will buy
government spending power is limited
ratio of government debt to GDP goes up
prohibitively

35. ACTUAL INTEREST RATE
- INFLATION RATE
TRUE COST OF BORROWING

36. INTEREST RATE FOR
5% BORROWERS
-10% - INFLATION RATE
-5% TRUE COST OF BORROWING
BORROWING TO MAKE A PROFIT ?!?!?!?

37. Who Loses from Inflation?
Savers
Workers
Income Tax Avoiders

38. Consumer Price Index is a BIG LIE
3% CPI (inflation)??

39. How do you and your family protect
and maybe profit from Inflation?

40. THE EFFECTS OF INFLATION ON
SAVINGS AND INVESTMENTS
ACTUAL EARNINGS RATE
- INFLATION RATE
TRUE EARNINGS RATE

41. 0.60%
HOW IS THAT RISK FREE?
ACTUAL EARNINGS RATE 0.6% EARNINGS
- INFLATION RATE - 3% INFLATION
TRUE EARNINGS RATE 2.40% LOSS!!!

42. Inflation: a foe to savers

43. Inflation: a foe to slow investors

44. leveraged AFTER 1 AFTER 20
TODAY?
investment YEAR? YEARS?
Interest only
$100,000 $100,000 $100,000
loan
Inflation at 3%
Hammers
16,667 16,181 9,505
needed to
hammers hammers hammers
repay debt

45. With an inflation forecast
of 10% inflation how can
your investments out
pace inflation?

46. value - mortgage = equity
500000
375000
equity growth
250000
appreciation
equity
125000
mortgage
0
YEAR
20092010201120122013201420152016201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040204120422043204420452046204720482049

47. inflation adjusted cash flow
$4,000
Income & Adjustable Expenses Increase
$3,000
Debt Expense Stays Constant
Net Cash Flow Increases
$2,000
$1,000
$0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
adjusted gross mortgage expense variable expenses monthly net income

48. What if you took RATES ARE LOW BECAUSE OF SUBSIDIES
NOT BECAUSE OF MARKET CONDITIONS
out a 30 year fixed
mortgage in 2009? FORECAST FOR INFLATION IS VERY HIGH
RATE OF INFLATION

49. Arbitrage into
Cash Flow Vehicles
Borrow at 5-9% to invest at 6-12%+
Strong Cash Flow Vehicles
Deeds of Trust (notes)
Mortgage Pools / Group Investments
• $100,000 borrowed at 6% = $500 I/O
• $100,000 invested at 12% = $1,000
Net Monthly Income = $500 (PROFIT)

50. Gold
Bonds / Treasuries
Stock Market
Real Estate
Businesses

51. Questions & Answers
www.HasslefreeCashflowInvesting.com
David@HasslefreeCashflowInvesting.com

52. disclaimers
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to buy, sell, or securitize securities.
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