No, no, no. It isn't Palis. Singular is palie, and plural is palies. One should never capitalize the first letter - they simply aren't worth it. As for being insulting, how could one possibly insult a palie? Language fails to provide any term that would be as bad as the reality of palie behavior and existence, and the very term "insult" seems to imply that one could somehow find words that were worse than the disgusting reality. No, I'm sorry to say that it is utterly impossible to insult a palie...though trying to do so remains a noble cause.
Call him a saudi.
Thank you, mate. As a non-native English speaker I do cherish your linguistic tuition. I also tremendously enjoyed your historic and cultural analysis of this orthographic problem, and please allow me to confess that I thoroughly share your views on the subject.