CONVERSATIONS WITH DAVID 03/22/2008

David:  “We are here.”

Response:  “Welcome David.”

Question:  “I would like to ask about the weather patterns that are occurring with significant flooding in the Midwest and record snow falls in the North.  Is this pattern going to continue from now on?”

David:  “The answer is yes.”

Question:  “In that case, what kind of economic problems will be caused by that?  Will there be a significant change in crop production?”

David:  “That is correct.”

Question:  “From an economic point of view, will those crops that are affected be increasing in value?”

David:  “That which is produced, or better said, that which is harvested, but the investment in a crop future that never gets harvested is a lost.”

Response:  “We were talking about how to capitalize on a deficiency or high demand for what is available.”

David: “ The deficiency is not immediate.  Even though there are losses, there are reserves.  If something were to happen to the reserves, then there would be a crisis.  Certainly, the futures in such areas will increase, that is to say, the price today and the final price at market will have a large difference.  It is hard to say just which section will be hardest hit.  As you know, areas like Kansas and Nebraska are centers of production.  They can be affected by the weather, as can Oklahoma.  Because the weather patterns are erratic, that is to say, they are caused by the global warming, but that is like taking a pot of water and boiling it.  Can you predict when the next bubble will occur?”

Response:  “No.”

David:  “That is the difficulty.  So yes, there is benefit, profit to be made on the futures of items as long as you are not buying a specific crop yield.  Are you familiar with that market?”

Response:  “I am familiar with futures.  I dabbled in it to some degree years back.”

David:  “There are two types of futures.  One future’s on the commodity, another on the specific organization bringing to market, literally buying the crop of a given farmer against his production-- often done by organizations, but with the larger farms, it can occur where one could be bidding in the same group.  Care must be taken.  You cannot predict which group will have a harvest.  Do you understand?”

Response:  “Yes.”

David:  “And yes, the weather will continue to be erratic.  There are changes occurring that will affect the whole world, not just this country.  And there will be moments when it seems as if the weather has gone crazy, that there is no rhyme or reason.  Yes, you will have more tornadoes.  All of these are parts of cycles, of temperature variations; and when they start occurring, there is a cascading effect producing more tornadoes, more rain, or lack of rain in a given area.  Some of these actions are attributable to El Nino.  Others are attributable to other factors such as the changing temperature in the ocean bodies and in the currents that will occur on the coast of Africa.  You are also to be prepared for a stronger hurricane season, though that, of course, is a variable since there are many conditions that need to be met.  The general energies seem to indicate that there will be a larger number of events with greater storms than before.  Proceed.”

Question:  “In the event of  preparations for hurricanes, we have backup generators, and we have storage food for long term.  This house, in my opinion, has a lot of stability relative to high winds because of roof pitch.  My very good friend always took the position to pay your insurance and get out of town.  My philosophy has always been to stay and protect my property.  Any comment on that?”

David:  “Your friend is a wise man.  No one should fight hurricanes, though if one comes, make certain your insurance is paid and move to a safer location… but we do not see it coming through this sector.  Do you understand?”

Response:  “I do.”

David:  “We try to maintain sufficient energy forces to reduce the impact of such natural events where we are working.  As of yet, in the last 30 or 40 years of your time, it has not been necessary for the entity (Richard) to move to any other area because of the climate.  But if you see him leaving because of the climate, you better be right behind him.  Do you understand?”

Response:  “Yes.”

David:  “We keep close communication and a close eye upon these things, but there are thousands who will be affected by the weather changes.  We are also waiting for one of the major earthquakes to occur.  As you know, one occurred a few days ago in China, and that was a 7 on your scale (Richter Scale).  We are anticipating within the next 2 to 3 years maximum, to see a 9.2 or 9.4.”

Question:  “In that same part of the world?”

David:  “It is impossible to identify until moments before as to where the energy release will be.  But as various factors in the Earth are changing, we are seeing results from many different directions and the more probably event is not to be in China.  We are more concerned with the faults that fall within the Americas.  Proceed.”

Question:  “Sometime ago, I was given that this area (near Crystal River, FL) was, within a 50 mile circumference, a protected and secure area.  Does that still stand?”

David:  “That is.  Now, if there is a tsunami, it will not be protected.”

Question:  “Would a tsunami get as far as this ridge?”

David:  “A tsunami could cross the entire state of Florida, and has in the past.  Approximately 1000 years ago, a tsunami went from the East to the West Coast of Florida, but that is a separate problem.  You do not have any volcanoes in the Atlantic basin because it is too deep and profound.  It is more on the Pacific side where there are problems.  Proceed.”

Question:  “Concerning hurricanes, can our consciousness assist in turning the hurricanes in a different direction or changing their course?”

David:  “The answer is yes, but it is also a very delicate matter.  Let us consider, to move a hurricane you must move the steering winds that guide it.  You have pressure cells and pressure fronts, and you have winds from one direction to another that help the hurricane move or hinder it.  The greatest problem is that if you focus enough energy on the hurricane itself to move it away from its destined course, where will it go?  That you cannot easily determine.  If you give it a shove it may well bounce into a new direction, but one that could be more devastating than its original.  It is a lot like billiards.  In billiards you strike a ball, and depending on the angle and point of contact, you can predict where the other ball will go.  When you are dealing with a strong energy and complex wind vectors that are involved, you know you can produce a change, but it is almost an erratic change while an unpredictable one.”

Response:  “A lot of the storms we had last year were cut off because of high winds at the top which seemed to influence them.”

David:  “That is correct.”

Question:  “So would trying to stir up high winds in the upper atmosphere to shear off the tops of these hurricanes create a problem?”

David:  “It could.  It could help, and it could create a problem.  All the other storms and rain patterns are affected.  Let us give you an example.  A peninsula was a fertile area in the 16th Century on through the period of 1929 approximately.  At that time there were a

series of hurricanes and devastating changes in the weather pattern that left that peninsula an isolated, barren, dry area sticking into the ocean, and it remained barren and dry for the next 60 plus years when, once again, the major storms affected the area and the weather changed once again, making that area a greener section.  Minor changes can be beneficial, but can also be catastrophic.  One person should not attempt to steer a storm.  That is like a rodeo where one is trying to ride the largest Brahma that has ever been born.  A group may try to manipulate the direction.  The problems therein are that there are often other groups trying to control the storms, and one may be pushing it in one direction and another group pushing it in another.  But when possible or where it is obvious, it is possible to make changes. Do you understand?”

Response:  “I do.”

Question:  “Considering the weather affecting the crops in the Midwest, would it be wise to invest in Index funds for the whole commodity pool?”

David:  “Define what is an Index fund.”

Response:  “Basically, it is an Exchange traded fund where the Fund selects commodities with the best potential profit margins.  Instead of an individual buying a specific commodity, they buy the Fund which chooses the commodities for them.”

David:  “But you have no idea what direction they will go.”

Response:  “No.”

David:  “It could be a reasonable hedge for profit, though the profits probably would be limited, and limited because the government would open reserves to adjust the market; but, yes, it could be a profitable direction.  What is the largest variation that has occurred in Index funds over the last 10 years?”

Response:  “I have no idea.”

David:  “You must investigate that.  You have to see where the possibility has occurred and look for the same kind when there was a spike or peak.  If it came down quickly, was that coinciding with a release of stockpiled reserves.”

Response:  “The Index funds are relatively new, I believe, less than 10 years old.”

David:  “It matters not whether it is 8 years, 9 years, 7 years.  There is a history cycle.”

Question:  “My next question concerns the economy.  What sectors of the economy will have the greatest growth within this next coming year?”

David:  “When you say sectors of the economy, you are speaking first of this country, correct?”

Response:  “Yes.”

David:  “Because there is a global economy.  When you speak of the economy, in what sense are you speaking of it?”

Response:  “Consumer goods, medical, these would be different sectors.”

David:  “The medical area will not be a beneficial sector for you.  It will constantly fluctuate and confuse.  The government is constantly trying to control the drug companies, and there are risk factors, though you might, if you wish to think in that area, look at the company Hoffman-LaRoche.  We are expecting some new elements from them.  The other areas are going to be in the areas of security, both from the standpoint of cars, homes, business, anything that has to do with maintaining security and privacy, as are the consumer electronics.  There is a great change going forward, as you were discussing yesterday, on the simple thing of recording on disc--  that the new Blu-ray is to eliminate all of the others.  If you will notice that the new televisions, the digital televisions, very few are offering televisions with a movie player within.  Do you understand?”

Response:  “Yes.”

David:  “The reason being, that the DVD, and those that are there are DVD, is soon to be obsolete; therefore, all those products will become useless or will be second in their place.  The companies who move toward the new will be leaders of course.  We would anticipate that Sony and Phillips will be amongst the first.  All areas of communication and electronics are, of course, going to continue to be the more promising.  The areas of virtual reality will take a greater interest.  The products that are being made smaller will, of course, lead.  The clothing markets will not change appreciatively at this time.  It is too economical to use the cotton and wool as primary with the polyesters.  In the home appliance field, it is also not anticipated to see much of a change.  There will be presented in the market, a new type… what do you call the thing that you use to cook outside?”

Response:  “A barbecue.”

David:  “The barbecue of solar operated barbecue is one of the designs that is in the works.  Whether it will have much success or not is yet to be seen.  The areas of conservation of energy, especially in solar energy, are part of the new front, as are the conservation and hybrid function in the automotive industry.  You can expect to see more activity and more homes turning in that direction as the cost of electricity becomes prohibitive.  There is no immediate change in the price of hybrid vehicles.  The market is too new, and Detroit, as you would term it, has no direct interest in lowering that cost, but

rather prefers to take a larger profit upon it.  Those are the main things we see at this moment.”

Question:  “Do you see any sector that will sharply decline?”

David:  “Many areas of production will sharply decline.”

Question:  “Production of what?”

David:  “Steel, automobiles, fabrication of goods.  This country is no longer a leader in production of physical objects; the cost factors are too high.  The food markets will not decline, but rather the prices will increase, and the interest in holistic foods or organic food will increase.  You will see more experimental vehicles using wind and sun as their power source.  But in the sense of purchasing commodities or stocks, there are many areas that will decline and some of your giants will seem to fall slightly, though they are going to be also involved in the directions.  Their income from traditional areas is to be reduced, and this includes companies like IBM which is no longer a gold standard type of stock, nor are the automotive makers or the steel mills, nor the aluminum processors.  Proceed.”

Question:  “You mentioned that we will be paying much more for electricity, which I assume is related to higher fuel prices.  Are we going to see gasoline going much higher than it is now?”

David:  “We shall match Europe.”

Response:  “Which is $4.50 a gallon.”

David:  “$4.50 to $6.00 a gallon, depending upon which country.”

Response:  “Canadians are paying about $4.00 a gallon, I think-- $.80 to $.90 a liter.”

David:  “That is correct.  In Spain they have paid up to $7.00 a gallon.”

Question:  “So are we going to pay up to $6.00 a gallon for gasoline soon?”

David:  “Within the year, it probably will reach $5.00 to $5.50.  Your fuel bill of $190.00 will probably rise to $340.00.”

Question:  “Which fuel bill is that?  Electric?”

David:  “That is correct.  We are simply using a reference of what you pay and what you will pay.”

Question:  “Should we consider buying gasoline futures?”

David:  “Gasoline and oil are elements which continue to increase.  We have a decreasing supply, that is true.  The futures in such areas are difficult because there are reserves.  The United States does not use its oil, it pumps a tiny fraction of its oil.  It uses almost exclusively foreign purchased oil, keeping the reserves for the rest.  As the summit countries become more and more independent and the markets in other countries, or demand becomes greater, then you will be forced to tap into your reserves.  When that happens, the prices will go quite high.  China wants more energy.  They can consume 2 to 3 times what the U.S. consumes-- that is their potential.  Now stop and think of the energy that is available in the world.  It is almost impossible to increase production by 3 to 1; therefore, the pricing will have to go higher, and he who has the highest dollar will have the petroleum.  And as the ecology problem continues, you will have to reduce the fossil burning, power consumption or power creation, and as you reduce the fossil burning to produce energy, you get caught in the vicious cycle.  But more serious yet, is another problem in this geographic sector and will be in others.  Your most precious commodity is running short.”

Response:  “Water.”

David:  “That is correct.  The major structures that will be for the future will be the desalinization plants, and as the water tables in Florida lower, sea water is going to infiltrate.  The sea is rising, the water tables are diminishing, and you can understand why the natural balance of things, that the sea water is going to fill the cavities coming in from the shore lines, so that even now, if you checked the salinity of water near Crystal River you would find that it is much higher than it used to be.  In this area, you were asking about what areas there will be major changes, and that will be in products that assist in solar energy and water preparation and purification, not to mention the self generation of electricity.”

Question:  “Will there come a point where I will be further ahead running off my generators than being hooked into the grid?”

David:  “No, but they may become equal.  But if something isn’t done to balance the situation in the growth factors, you could see a gallon of water go to $5.00.  Do you understand?”

Response:  “Yes, maybe it is time to build a cistern here.”

David:  “A cistern is not practical in this state.  You have no rock bed, and there are subterranean water reserves.”

Response:  “All cisterns need is something as simple as rain barrels.  We did that in Canada.”

David:  “That is correct.  The cistern could be used, the concept.  There is energy in Florida and there is water, but no one has determined how to utilize it.  There are great underground rivers that flow from the North, and many of them empty into the Gulf of Mexico pouring fresh water into the salted sea.  They have enough volume and pressure to generate electricity and to produce fresh water.  Yes, a cistern of type would help if there is enough rain and if the pollution in the atmosphere is not too great, but it does become more difficult because of the sandy soil and the sedimentation rate.  Proceed.”

Question:  “I’m considering buying a fairly large distillation unit to deal with that particular type of issue.  Would that be a wise idea?  There is one available for about $600.  It is quite elaborate.”

David:  “That would be quite beneficial to you as long as you have a source of water to distill.  There will eventually be distillation units that will work on solar energy, and those plants are best served around the coastal areas.  But of course, those areas do suffer from the weather, but then, the coastal areas are going to move inland.”

Question:  “Relatively soon?”

David:  “Relativity is a strange word to us.  You will see a change.  Within 15 years, many properties will be lost or will be underwater.”

Question:  “Does that include my property in the Islands (Turks and Caicos)?”

David:  “The property in the Islands will also be diminished.”

Response:  “I think my property is about 6 feet above sea level.”

David:  “In 15 years you will not be 6 feet above water.  Do you understand?”

Question:  “Will it be beach front?”

David:  “You will be beach front.  The rate of acceleration is the problem we cannot predict.  As we are losing the ice flows and icebergs in the North, it becomes a cascading event, much like an avalanche.  You can predict that it shall occur, but you cannot predict all the consequences during its processes.  Proceed.”

Question:  “On another subject, do you have any comments about the politics of today?”

David:  “They are as dirty as ever.  What would you like to know?”

Response:  “I have nothing specific.”

David:  “There are many elements always present.  The political situation is only, as you would say, the tip of the iceberg.  IT IS TIME TO MAKE A CHANGE.  The change does not appear that it will follow to a different party, it appears that it will stay within the same.  The major problem is going to be your war in Iraq and the ability to remove yourself from that quagmire.  It is a very costly process and one, which of course when it ends, will have an impact on the economy as well.  How many troops are in Iraq at this time?”

Response:  “300,000.”

David:  “Do you have jobs for 300,000?”

Response:  “No.”

David:  “Then you understand part of the problem.  If you brought those 300,000 home tomorrow, plus those from Afghanistan, how are they going to live?  Now you see part of the necessity of war.  It is not economically possible to extract oneself from this situation and to stop immediately the production of tanks, aircraft, weapons, bullets, and bombs, not to mention the electronics that operate these things. These are all part of your economy and their production.  Now think of the sudden cessation of all of that.  That means your 300,000 immediately becomes close to a million persons who could be put out of work, or would be out of work.  Where do you put them?  You don’t produce pencils anymore.  You don’t produce broom handles or ax handles.  These are the problems that are going to be facing the nation.

Your other problem, of course, is the retiring groups becoming more and more numerous.  And on top of that, you have the problem of immigration which has never been as important as it is now.  In 1850 there was a great outcry against the number of immigrants coming in from Europe because of the famines in Europe, but they made a very tiny impact upon the Americas as a whole.  That is not true today where you have a changing structure.  What percentage of the American population, including those who live here legal or illegally, has Spanish as a native or ancestral language?”

Response:  “Maybe 15 to 20%.”

David:  “That is correct.  It is closer to 20%.  No one is looking at the reality-- there is approximately a 20% element.  Many are legal and many are illegal, but they represent a new group.  Never in the history has there been 20% of any foreign group.  There were never 20% of the Italians, the Germans, the Poles, the Russians, the Greeks, or any other group, except of course, the English who founded this country.  But today, you are looking at that factor.  This is going to change the way the country operates, and it will also change much of its ability to produce and continue.  You are not a production oriented country, you are an information country.  Unfortunately, it would be wiser if a great percentage of the population returned to agriculture, as therein is the other problem, the need to feed.  Do you know the birth rate amongst the groups?”

Response:  “No.”

David:  “The birthrate of the Latin is 3 times the birthrate of the Caucasian.  That means within a small period of time, of 20 to 40 years, the majority population of this country can be replaced.  That is not a negative, but simply a fact that exists.

The concept of world government keeps moving forward with groups that seek to operate secretly behind governments and to promote that.  That however, is made weaker by the influx of immigrants such as you have here.  Whether one agrees or not with the philosophy, the Southern Americas are trying to unite.  They are experimenting with Socialism and Communism and other combinations, but if they succeed, they will actually represent a major power factor.

This country also cannot continue to fund its retirement programs wherein the majority of citizens will soon be retired.  That means every person working will be working to support himself and someone else.  Those are the crisis areas, which of course, is a great reason for one to protect their investments and look to the future.

Yes!  Gold is a good hedge against inflation, but at this moment gold is inflated; therefore, you have the strange situation-- the little pawn shops that most people laughed at or thought were a dirty profession.  Those little men with their scales and acid who continued to buy gold day after day when people needed the money, are now sitting with millions of dollars because of their continuous diligence.  It is not bad to buy gold, but not at $1000 per ounce.  If one had the capital, one could purchase gold in open market from people, from individuals.  One could advertise in the paper, one could go to homes to find gold, and in doing so, one could purchase that gold for a fraction of its value.  Do you understand?”

Response:  “Yes.”

David:  “The mechanics and chemistry are simple.  One must know what the values are.  18K gold is 75% pure gold.  A pure gold ring, even without a stone, does not yield its weight.  It yields 90-95% because of dirt impregnation, polishes, wax, skin, grease, many things, soap, which accumulate on the ring.  So if someone were to take the $1000 per ounce and decided all gold was worth $600 an ounce pure, then factor accordingly, one could produce a very handsome income in a relatively short period of time.  That is a wise investment.  Silver is not as wise, because of the major fluctuations that can occur.  If someone offers you platinum, you could buy platinum at $500 an ounce.  If they sell it to you, then you have a profit margin.  These are the ways to hedge against the inflation factors.  Diamonds are also an excellent source if one knows the true price of  diamonds and also realizes that there are 2 classes of diamonds, the registered diamond and the unregistered.  Older diamonds were not registered.  They do not have a number engraved by laser upon the diamond, and therefore, take more care in handling.  How many hearing aids do you sell in one year?”

Response:  “About 200.”

David:  “Then that produces about $400,000 dollars of gross income, is that not correct?”

Response:  “True.” 

David:  “You can produce that amount in 6 months in purchasing gold.  People need money.  They have gold, they sell gold, and we are not talking about a pawn shop where there is a theoretical promise to resell, we are talking about outright purchase.  The investment cost to purchase is small.  The tools you basically have or know how to use.  You require the acid for the testing, you need to be able to measure specific gravity, and you need a precision balance and an economical calculator.  That is the business.”

Question:  “So, you would purchase gold in the neighborhood of $600 an ounce, and you would resell it immediately in the other market?”

David:  “You would accumulate it long enough to have a worthwhile mass, and then you would sell back to a refinery who would pay you for its value, unless you found something of extraordinary value which you would prefer to sell privately.”

Response:  “That certainly would take care of my 9% requirement for my equity problem.”

David:  “It is also feasible where you are utilizing the flea market, though one has to be careful of the lower element.  One could advertise at such a place, that one purchases.  One caution, only buy yellow gold.  White gold is difficult to identify, as is palladium, rhodium, and other metals.  Separating them can be a problem.  If you consider for example, the one ring that the entity wears, it weighs exactly 1/2 ounce.  The 2 rings are ¾ of an ounce.  They are 14k.  But you can see how quickly one could accumulate pieces, and it is much easier to buy gold than it is to sell hearing aids.  It certainly is not a noble profession, it is a way to make money.  Are there any more questions?”

Response:  “We have no further questions.”

David:  “Then we shall terminate for this evening.”