RANDOM MUSINGS III
by Sol Palha

May 9, 2006

What this power is I cannot say; all I know is that it exists and
it becomes available only when a man is in that state of mind in which
he knows exactly what he wants and is fully determined not to quit until he finds it.
Alexander Graham Bell 1847-1922, British-born American Inventor of Telephone

China

China uses 6.5 million barrels of oil a day and the US uses 20 plus million barrels a day. In a few years it displaced Japan as the world’s number 2 users of oil. Its GDP is growing at 8-10% a year. It has a population of over 1.3 billion people and many of them are dumping their bicycles and buying cars. In less than 14 years its energy needs are projected to increase by over a 150%. In 4 years China is projected to have 90 times as many cars as it had in 1990 and by 2030 it is estimated that it will have more cars then the United States. The problem is that supplies of oil are not increasing; well that’s what the media is saying at least and in the end that’s all that matters, as the masses believe everything they are told.

In reality there are very huge supplies of heavy oil; the reserves in the Orinoco region of Venezuela are larger then those in Saudi Arabia but because it’s heavy oil these reserves are not counted. In other words when the worlds reserves of oil are calculated heavy oil reserves are not taken into consideration. By the way our play #### has proven technology to convert heavy oil into light oil in a process that actually generates energy so it can be used in very remote areas. We wonder why these reserves are not counted; our take is that as usual the big guys want to generate panic and thus leave less time for the masses to think. When you are in a state of constant worry you cannot think or focus on anything. Pay careful attention to the news and you will see that almost all the time this trick is employed; it’s a very good psychological ploy to make sure that the masses never see the light. To be able to think and see patterns you have to be relaxed and that’s why we push the concept of cutting one’s stress down so much. Once you cut your stress down and are relaxed you can see through this nonsense very easily. Every disaster can be prevented but none are and the reason is always the same “money”.

It is for this reason that we have always stated that one should not panic no matter how bad things look because every disaster is nothing but opportunity knocking in disguise provided you are calm enough to see it. Eventually they will start to attack these heavy oil reserves but they will wait till the very last minute to do so and then it will take at least another 6-11 years for us to see the results. Again the reasons are simple money, money, money and more money.

Light and Darkness

We are told to walk in the path of light but how about if most people misunderstood this message. Normally light is made to look as good and darkness is supposed to be bad. If most so called contrarians were really true contrarians they would question this premise, if they applied mass psychology and common sense they would most definitely question the above perceptions.

Let’s examine a few facts:

Science has now proven that approx 95% of the universe is black (as in darkness). So that means only 5% is in the light so as to speak. This information alone should be enough to make one think. But let’s go further it has been shown that humans on average use about 5-7% of their brain capacity and geniuses at most 15%. Hence it’s safe to assume that the most advanced human being would only have knowledge of maybe 0.05% if not less of this 5% of the universe that is in the light.

Next the reason most people are afraid of the dark is because they fear the unknown, but if you fear the unknown then how can it ever become known. So in essence the fear is irrational, as it’s based on pure hear say or superstitious beliefs, twisted religious beliefs etc. Now just with the above info a contrarian would say perhaps the darkness holds the secret, as 95% of the universe is black. How could you possibly learn anything by just studying 5% of what’s out there; that the equivalent of some jackass reading one book on investing and assuming he is the worlds best investor.

Let’s dig even deeper and use knowledge that is available to anyone that might want to pursue this subject further. An object gets its colour by absorbing all the other colours except the colour it reflects so a blue object is blue because it absorbs all the other colours except blue. Taking this one step further we could actually say that the darkness is the path of light simply because it absorbs all the light and reflects black and the light is actually darkness because it absorbs all the black and reflects just the light.

If something is absorbing light then one would have a better chance of finding the answer there then something that is absorbing darkness only. I mean we don’t go to idiots and ask them for advice do we; idiots absorb everything else besides knowledge and the opposite can be said for geniuses.

Okay this was a simple mental exercise and an examination of the facts using simple data that is available to most individuals. We are making no assertions whatsoever. Draw your own conclusions. All we wanted to do was offer a different view and possibly push you to put your thinking caps on.

High Cost of Petrol

One minute you have the talking heads in the news come out and say that high prices of petrol are not stopping people from driving huge cars. Then you dig deeper and you find stories of retired and low-income individuals skipping on some of their medications just to be able to fill their cars at the pump. One chap actually skipped on his blood pressure medications and passed out; he could have died and it makes us wonder why he would risk his life for petrol. He could have replaced his with a smaller Japanese car or done the unimaginable and purchase a scooter (these little buggers can go about 100 miles on a gallon of gas).

Interesting demand for scooters is actually increasing it appears that some individuals are deciding to find a solution rather then sitting on the curb and whining about gas prices that are still one of the cheapest in the world Full Story

Another interesting point is that pawn shops are witnessing a surge in business and a lot of this has to do with people pawning their stuff so they can buy more petrol. It amazes us how it takes so long for people to do something simple. If the price of petrol is too high get rid of the big car and get something smaller. The price of Petrol in Turkey is now in excess of 10 dollars per gallon and they are still surviving.

Census: Americans Are Fleeing Big Cities

WASHINGTON - Americans are leaving the nation's big cities in search of cheaper homes and open spaces farther out.

Nearly every large metropolitan area had more people move out than move in from 2000 to 2004, with a few exceptions in the South and Southwest, according to a report being released Thursday by the Census Bureau. Northeasterners are moving South and West. West Coast residents are moving inland. Midwesterners are chasing better job markets. And just about everywhere, people are escaping to the outer suburbs, also known as exurbs.

"It's a case of middle class flight, a flight for housing affordability," said William Frey, a demographer at the Brookings Institution, a Washington think tank. "But it's not just white middle class flight, it's Hispanics and blacks, too." Full Story

The masses always react towards the end of the cycle. They are making two key mistakes:

1. Owning a house is actually the so-called American dream concept; in reality it should be called the American nightmare. Owning a house makes sense only when you can put up over 20% of the cost as a down payment (note you don’t have to do this but you should be in a position where you can do this) and have adequate funds to pay at least 12 months worth of mortgage payments in case you lose your job. One can actually make more money by putting the money one loses to interest to work in the market or some other better paying investment (approx 90% of the monthly payments for the first 10 years are nothing but pure interest payments, in the first 3 years it can be as high as 95%).

2. They are moving right at the top or close to the top of the housing market. If they wanted to move they should have made this decision earlier this way they could have actually made some money on the house they are now going to buy in the suburbs. In addition they are forgetting about the concept of renting. To many now renting is a bad word so from a mass psychology perspective the best deal in real estate right now is to rent and sell your place if you are flexible. Wait for a nice pull back that will produce some beautiful bargains down the line.

On separate note it appears that more and more speculators in real estate are getting caught with their pants down. Many of them are being forced to sell these properties at a loss because they are either no longer appreciating or they cannot afford their monthly payments as most made the mistake of taking out adjustable rate mortgages.

Only a man who knows what it is like to be defeated can reach down to the bottom of his soul
and come up with the extra ounce of power it takes to win when the match is even.
Muhammad Ali 1942-, American Boxer