by GoIllini » Mon 15 Aug 2005, 12:52:05
$this->bbcode_second_pass_quote('jdmartin', 'A')sia will be in serious pain but I think it's a fallacy to believe we won't. These countries hold massive amounts of US debt and it is entirely likely that these debts will start to be called in as these countries need access to the money. What is going to happen when we (the fed gov't, states, etc) have to start paying out all of this money in Tbonds, corp bonds, etc? They will have to seriously step up issuing debt, except who is going to be there to buy it unless they seriously jack up the interest rate to be paid? And if that is done, where does all that money come from now to pay the interest on the debt? We have become so tied to Asia that everyone better hope they don't go bust, because they'll be a big anchor dragging us down with them. If China goes bust it will likely wreck us in the process....
You have to understand, though, that there's going to be so much inflation, and grain's going to be so expensive, that the debts Asia holds are going to look pretty small. Maybe it'll buy them a year's worth of grain if they don't buy try to buy it all at once and spread it out over several years. You'll remember that the much of the debt China holds is paying less than 4 or 5% interest. As oil prices rise before peak oil, we can expect inflation to be at least as bad as the oil shocks during the '70s. All that debt really isn't going to help China.
I also think there's going to be plenty of agricultural work that'll more than pay people enough to feed their families.
$this->bbcode_second_pass_quote('', 'T')he days of the post-WW2 economic propsperity are long gone. People are only guilty of trying to maintain the standard of living that their boomer parents had previously taken for granted. So people will make sacrifices (long commutes, two-income household, maxed out credit, etc) to maintain the illusion of a way of life that they believe is their birthright.
I would disagree. I believe that the doomsday total-end-of-civilization scenario isn't going to play out, and if that's the case, the U.S. has the natural resources to feed itself and be the first to rebuild. That means that we will come out of Peak Oil like we came out of WWII. The only difference is that the entire world will be in shambles, and nuclear and renewable energy will give us much more energy to work with- and a much stronger economy.
If something worse than the hard recession and better than the permanent end-of-civilization scenario plays out, the first country to emerge from Peak Oil will experience a 20-40 year boom that will make the postwar boom look like a mild recession.