[threadbear]

The coming recession will last for decades, Iatto, due to diminishing resources and the ditching of the American petrodollar as reserve currency. It was kickstarted by phenomena that are somewhat independant of oil, though. If the world were still resource rich and oil very cheap, recessions would still occur.

I think what people are confused by, is the difference between cycles and a shift in status from a wealthy powerful nation, to one that is in decline and facing the future as a third world nation.

[bodigami]

dark night of the usa? you do realise that usa is just another empire that eventually will fall?

no, what is at stake is our current (GLOBAL) economy fueled by our current (GLOBAL) technology and "guided" by our own ignorance...

[Lanthanide]

$this->bbcode_second_pass_quote('BigTex', 'a')nd the wild card in the global doom deck, which is the bird flu.

[thor]

Perhaps PO is at the heart of this mess. Let's face it, we've been on an oil binge with oil as cheap as $10 a barrel. Production appeared virtually limitless hence the money/credit creation machine kicked into gear. We thought we had all the natural resources to keep growing into outer space, promosing future payments. But we can't pay up anymore due to rising energy prices and the prospect of limited growth and a permanent contraction.

[threadbear]

$this->bbcode_second_pass_quote('thor', 'P')erhaps PO is at the heart of this mess. Let's face it, we've been on an oil binge with oil as cheap as $10 a barrel. Production appeared virtually limitless hence the money/credit creation machine kicked into gear. We thought we had all the natural resources to keep growing into outer space, promosing future payments. But we can't pay up anymore due to rising energy prices and the prospect of limited growth and a permanent contraction.

[Pops]

I guess I am thinking the dip started a while back but now the proper-upper has maxed out his cards – the prop since 2000 (or maybe 1990) was the US consumer who borrowed and consumed until he is now starting to puke.

The cost of everything escalating due to higher energy prices has only started to kick in and will certainly give him a little goose and I’m thinking he will miss the bowl.

What will hit the fan will come from the opposite end than most have been predicting.


Apologies to Mr. Bill for this vulgar analogy from my Math 20 assessment.

;^)

[cube]

$this->bbcode_second_pass_quote('threadbear', 'T')he causes of the credit fiasco had NOTHING to do with peak oil. It was pure greed, and wasn't predicated on anything other than procuring the goods (extension of credit and a cut from the transaction) and then quickly passing the toxic waste to another party. Nobody made decisions based on the price of oil, or the forecasted price. And the subprime crowd would likely have just as much difficulty making loan payments, regardless of oil price, though rising price of gasoline plays a role.

[sjn]

Financial growth has massively overshot productive growth in the global economy, particularly in the US other "anglo" countries. I posit this is due to resource constraints including PO reducing the ability of the real economy to give the returns on capital expected by investors. Globalisation has masked this somewhat as productive growth moved to parts of the world with lower wages and particularly the ability to externalise the costs of the abuse of environmental sinks (over the short term). Recessions are to be expected but now the game has changed.. This time things ARE different. The US and the UK are now not much more than a giant ponzi scheme, there is no over expansion of production as would usually be expected, and a rationalisation of the economy where recession removes mis-allocation and excess is likely to end with very little remaining.

[virgincrude]

I also agree with threadbare: "The causes of the credit fiasco had NOTHING to do with peak oil."

But one of the reasons I started the thread is because I'm wondering if the dyed-in-the-wool doomers will be finding ways to explain it all as the fault ultimately of P.O The Kunstler piece 'Bareling into recession' posted in the News section a day or two ago does this: explains it all relating to P.O. And that's the risk when one is deeply convinced of something: you'll inevitably find ways of relating everything to your pet theory, which just muddies the water for those looking for less esoteric or more obvious causes as explanations.

Even the declaration/acknowledgment of recession is unlikely to be forthcoming from the look of people's wording here: 'the coming recession' 'if there is a recession' etc. whereas here in Spain the media are talking openly about the US recession and desperately trying to come to grips with untranslatable terms such as 'subprime' and 'credit crunch'. Commenters and journalists generally have accepted the complete lack of growth, the credit and housing slump and desperate measures by the Fed all signal what the US hasn't fully accepted yet: recession.

[JPL]

Silly people. Occam's Razor says that a bunch of Middle-Eastern funds started pulling capital out of the US credit markets about 12 months ago. This then started the general slide & rush for the exits.

But this was nothing to do with anticipated production problems & then $100+ a barrel, at all. No-one in knew anything in advance, right???

JP

[I_Like_Plants]

$this->bbcode_second_pass_quote('JPL', 'S')illy people. Occam's Razor says that a bunch of Middle-Eastern funds started pulling capital out of the US credit markets about 12 months ago. This then started the general slide & rush for the exits.

JP

[MrBill]

$this->bbcode_second_pass_quote('Pops', 'I') guess I am thinking the dip started a while back but now the proper-upper has maxed out his cards – the prop since 2000 (or maybe 1990) was the US consumer who borrowed and consumed until he is now starting to puke.

The cost of everything escalating due to higher energy prices has only started to kick in and will certainly give him a little goose and I’m thinking he will miss the bowl.

What will hit the fan will come from the opposite end than most have been predicting.


Apologies to Mr. Bill for this vulgar analogy from my Math 20 assessment.

;^)

[kublikhan]

$this->bbcode_second_pass_quote('virgincrude', 'B')ut one of the reasons I started the thread is because I'm wondering if the dyed-in-the-wool doomers will be finding ways to explain it all as the fault ultimately of P.O The Kunstler piece 'Bareling into recession' posted in the News section a day or two ago does this: explains it all relating to P.O. And that's the risk when one is deeply convinced of something: you'll inevitably find ways of relating everything to your pet theory, which just muddies the water for those looking for less esoteric or more obvious causes as explanations.

[Valdemar]

This recession isn't caused by peak oil, but PO and this recession are linked. The common factor here is human stupidity.

[efarmer]

Warren Buffet quote on economic situation:

"It's sort of a little poetic justice, in that the people that brewed
this toxic Kool-Aid found themselves drinking a lot of it in the end,"
he said.


full article on www.reuters.com today 2/7/2008

[Iaato]

$this->bbcode_second_pass_quote('sjn', 'F')inancial growth has massively overshot productive growth in the global economy, particularly in the US other "anglo" countries. I posit this is due to resource constraints including PO reducing the ability of the real economy to give the returns on capital expected by investors. Globalisation has masked this somewhat as productive growth moved to parts of the world with lower wages and particularly the ability to externalise the costs of the abuse of environmental sinks (over the short term). Recessions are to be expected but now the game has changed.. This time things ARE different. The US and the UK are now not much more than a giant ponzi scheme, there is no over expansion of production as would usually be expected, and a rationalisation of the economy where recession removes mis-allocation and excess is likely to end with very little remaining.

[raisinbran]

Something I was wondering: Could this U.S. slowdown/recession usher in Peak Oil sooner?

It seems reasonable to think that the capital that maintains/expands oil production capacity will be affected by rising costs of virtually everything: materials, fuel, vehicles. Not to mention more difficulty for engineers and experts to continue education and enter the workforce, coupled with a baby boomer generation retiring. [Added: And, probably the most significant, with a recession comes a reduction of investment, investment in anything that will ultimately trickle to energy capital.]

Additionally, "the whole world" is supposed to slowdown when the U.S. does.

If Peak Oil isn't noticeable yet, do you think this recession will make it more transparent, or will expedite the production downslope? [Added: I ask because supposedly the oil prices are supposed to increase, giving more money to the oil producers... so there may be a balance there]

Many posts talk about peak oil causing this recession (which I will say that there are many factors beyond PO involved), but what about the recession "causing" peak oil?

[virgincrude]

raisinbran- I don't think so. Mainly because as the US economy slows, so does its consumption of energy, see how the price per barril is balancing out? However, there's not enough sweet stuff to satiate the world's thirst as we speak and as I said in a previous post, whatever the US is not buying up, others are. Not to mention the Export Land Model which predicts the developing, producing countries are set to increase consumption ...

Besides that, I reckon world production peaked in 2005 and we are currently on the pleasantly undulating Post-PO plateau, anyway

[killJOY]

I'm too lazy to see if anyone posted this link already to Michael Klare's article which states explicitly how the recession/housing collapse is linked to oil:

But it's worth posting again if it has been already:

Barreling Into Recession: How Oil Burst the American Bubble

Like lots of things, this isn't an either/or proposition.

[raisinbran]

yea, that's true, I forgot about crumbling demand...

I think Peak Oil is directly related to the ability of oil producers to produce... namely energy capital. Let me try to list some drivers of energy capital

Some downward energy capital pressures include:

Crumbling U.S. demand = less domestic business for oil producers

Crumbling Financial System = less investment funds to go around

Slowing economy = fewer experts/engineers

Inflation = less real value of money for producers, higher prices of raw materials

Aging current capital = less production capacity

"Global warming craze" = fewer resources from oil production expansion

Babyboom generation retiring = less technical expertise


Some upward pressures include:

Crumbling demand = easing of the production expansion "quotas"

Demand growth from other countries = more business for producers abroad

Higher prices = more money for producers


I know this is an overly simplistic way to look at it, but I guess I'm trying to illustrate the forces at play here. I can't think of any more drivers off the top of my head, any one else know of any?