[seldom_seen]

This is one of those subjects that isn't worth debating. If you can't see, or won't to take the time to understand the links between energy and the economy you probably never will.

[yesplease]

$this->bbcode_second_pass_quote('Armageddon', 'I')f you have a fiat monetary system, you have to have continued growth to service the debt.

[Armageddon]

$this->bbcode_second_pass_quote('seldom_seen', 'T')his is one of those subjects that isn't worth debating. If you can't see, or won't to take the time to understand the links between energy and the economy you probably never will.

[yesplease]

$this->bbcode_second_pass_quote('seldom_seen', 'T')his is one of those subjects that isn't worth debating. If you can't see, or won't to take the time to understand the links between energy and the economy you probably never will.

[SpringCreekFarm]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('SpringCreekFarm', 'I') say the econolypse was caused by many factors and one of them was the high price of energy.

[yesplease]

$this->bbcode_second_pass_quote('SpringCreekFarm', '')$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('SpringCreekFarm', 'I') say the econolypse was caused by many factors and one of them was the high price of energy.

[SpringCreekFarm]

$this->bbcode_second_pass_quote('JohnDenver', '')$this->bbcode_second_pass_quote('SpringCreekFarm', 'I') say the econolypse was caused by many factors and one of them was the high price of energy.

[seldom_seen]

$this->bbcode_second_pass_quote('yesplease', 'Y')ay! It's been a while since I've seen an appeal to authority.

[yesplease]

You aren't even trying to lead the horse anywhere, so why would you complain that it ain't drinking?

[Impervius]

It was just some bizarre coincidence that we happend to have a global economic collapse of our oil based economy at the same time we hit peak oil!!!

How could you even think that hitting peak oil would affect our oil based economy in any way?!

[ReverseEngineer]

I think the confusion here lies in attributing the collapse specifically to Peak OIL, when really what we are talking about is Peak RESOURCES, when balanced against the total size of the world population.

Back in the time of Malthus and Nostradamus, nobody knew jack squat about oil or even really much about thermodynamics. What they did understand though was geometric expansion of numbers inside a limited environment. So it wasn't all that hard even back then to tally out population doublings and make a good estimate when the number of people on the earth would exceed the ability of the earth to support that number. You didn't need Hubbert or graphs of Oil discoveries versus usage to figure just when the population of the earth would become more than the earth could support.

The only thing Oil did in this whole equation was inflate the numbers briefly. Without Oil, we would have come to the same crisis in about the same timeline, just with lower numbers.

The Earth is just a very large Petri Dish with bacteria spread over the surface. The skin of the earth is really all we can work with for the most part, you can't go down to the bottom of the ocean at great depth to work or drill all that deep either. If it isn't within a mile or so of the surface of the earth, its all basically out of reach.

So anyhow, human population grew and expanded for so long as there was more resource to exploit, but when we ran out of resource to exploit we ran up against a brick wall. In indivdual areas there still is enough resource to support individual populations, but GLOBALLY there is not enough resource to support the 6B we have on the planet which we only have because of the presence of Oil for these last 100 years or so. That resource and its depletion along with the globalization of the world economy is what led to the crash here, but really its just a total resource problem.

The Greed, the Ponzi schemes, the Sub-Prime mortgage mess are all just artifacts of the inability very rich folks had to make any real money anymore once Oil got too expensive and growth had to stop. Bernie with his Ponzi scheme that fleeced mega rich folks for Billions is just one example of what has been going on for the last 20 years or so as further Debt was created and money was centralized into the hands of a few, making them richer while impoverishing others more. They had to keep creating more debt to keep making themselves richer because there wasn't anything within 1 mile of the surface of the earth they could GET anymore to grow the economy. You had to take from one place to get richer in anotherm, and that is what this monetary system did.

Eventually, so much of the wealth became centralized that the only people left to steal from were other rich people. Still more exotic financial instruments were created to do this, and Sharp Shysters made a nice living pushing around the money on the stock market, with more and more of it borrowed money all the time, not really representative of real wealth in the world.

Is this the result of Peak Oil? Yes and No. No in the sense that the same problem would have occurred whether we discovered Oil or not, just with a lower total population number. Yes in the sense that as soon as Oil became to expensive in its EROEI, the whole Ponzi schem of world finance that evolved up around it came crashing down, virtually at once. Its not JUST the Sub Prime fiasco here that drives this,all that was was a a mechanism to try to keep making money through debt when all reasonable means of making money were done with. What the collapse of that market did though was to set a Cascade Failure going, and so now ALL the debt and all the money is going up in flames, in the Greatest Bonfire of Paper Wealth in all of Recorded History.

Assuming we don;t Nuke ourselves as the result of going bankrupt, eventually Human population will dwindle down to just what the planet can actually support as it regenerates itself from energy rained down from the sun. Its not a petri dish in the sense that there is constantly new energy available in the system to work with, so you don't have to have a complete population crash. However, the actual population size the earth can support without fossil fuels is way smaller than it is right now, and so the economy crashed in response to that fact of life. All the economy really is is a metaphor for the value created in a society by work and by what you take out of the environment. Money represents that, and when the system itself is running negative, so also must the money go negative. You could not stop this from happening as long as there was exponential growth in the human population.

This unavoidable outcome means that it is quite certain we never will have 9B people on the surface of the Earth. The Die Off has begun, and it will accelerate in pace. There may be a lull or series of lulls in this slide down the other side of the Peak Oil slope, but we will work downward here to just what the Earth can support in total Human Souls, no more than 1B I would guess and perhaps less than that.

Was it Peak Oil that caused this? No, not really. It was Geometric Growth of Population in a world of Limited Resources. Oil is only what we saw in our lifetimes; what had to occur here has been obvious since the time of Malthus and Nostradamus.

Reverse Engineer

[yesplease]

Whoa whoa whoa... Just the facts ma'am. Fossil fuels look to be a limiting factor in population size due to their externalized costs, eg unknown/unstable weather leading to significant changes in agriculture and the like. It's not likely that the lack of fossil fuels, outside of natural gas for fertilizer and other key inputs, will result in a reduction in carrying capacity, but that their externalized costs can.

[rockdoc123]

Jeff Rubin, the chief economist with CIBC World Markets believes the run up in oil price was the main culprit in the present crisis. Heres a link to a brief paper available at the World Markets site:

World Markets

$this->bbcode_second_pass_quote('', 'H')ow do imploding property values in innercity Cleveland slums bring down the world economy?
Cleveland may loom large on the balance sheets of financial institutions and equities
worldwide (see pages 7-9), through the wonders of leverage and securitization.
But global GDP is a whole other ball game. Is Cleveland, and all the other depressed
property markets in the US, really big enough to deep-six a $60 trillion world economy?
And how do falling property values in Cleveland create a recession in Japan, and
the Euroland economies, before they even create a recession in the US economy. And if
Cleveland and its ilk are really the epicentre of all the world economies’ ills, why is the
rest of the world buying greenbacks?

[seahorse]

There was another energy analyst, Andrew McKillop, who in 2004 and 2005 wrote several opinion pieces that a run up in oil prices actually helped GDP up to an economic breaking point, which he opined would be somewhere at $100.

No time to find the links right now, but interesting reading in retrospect because they seem to be spot on. I just don't see how anyone can dismiss the role of oil in today's economic downturn. Oil has essentially plateaud since 20005 while world GDP continued to increase, so oil prices had to increase to tame the increase in GDP. It all finally broke. This recession/depression caused by limited oil and spiking oil prices was long forecasts by the oil pessimist, many of the links have separate topics here on PO.com

[Concerned]

Oil extraction 85 million bpd $145 per barrel

Monthly global bill $375 billion
Yearly global bill $4.5 trillion

The much vaunted Paulson bailout $700 billion

Run the numbers high oil prices have had a definite negative impact in the current financial crisis IMO.

[Ludi]

$this->bbcode_second_pass_quote('ReverseEngineer', ' ')The Die Off has begun

[mlayden]

This reminds me a lot of the discussion after a car crash. Everyone involved sees it in a different way. The youth blames the crash on the deer that jumped out in front of him. His girlfriend thinks he was going to fast. The cops blame it on the fact that he was driving under the influence and his loyal mother thinks if he could have had a better car he wouldn't have crashed

My own feeling is that the economy was going way to fast, i.e way too much credit. It had a drunk in control, i.e political and business leadership who were two intoxicated by the boom to think rationally. The impact of peak oil and high oil and resource prices destabilised the system for long enough to do damage. The economists are incapable of looking at the actual event and can only discuss the imperfections in the vehicle

It doesn't really matter at this stage. The low energy prices from the massive demand destruction means that the capital needed by the energy system will not now be available and the energy infrastructure will deterioate much faster on the down slope. It also means that many countries will have too much political instability to plan wisely.

It also doesn't matter because the lessons have not been learnt and nearly all the political and economic focus is on trying to reflate a speculative bubble. i.e consumer spending

[Serial_Worrier]

The current meltdown is 95% being over-leveraged from all standpoints(consumer, business, government) and 5% energy prices.

[ReverseEngineer]

$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('ReverseEngineer', ' ')The Die Off has begun

[Ludi]

$this->bbcode_second_pass_quote('ReverseEngineer', '
')Absolutely. The economy is shrinking. The economy represents the sum of all the people on earth. Economy shrinks, population shrinks.