by kublikhan » Mon 15 Dec 2008, 18:20:49
$this->bbcode_second_pass_quote('keehah', 'P')erhaps dave67 and mos6507 you could actually offer your non-peak oil root cause reason(s) for the 'credit crisis.' This lets us each decide if it is better theory or not.
Neither of you has offered a reason in this thread.
So if not rooted in peak oil plateau effects what caused it?
Personally I say fiat money and Wall Street corruption (Pyramid scheme overreach) caused it. Arrival and larger awareness of oil production plateau (and other resource constraints) means the economy will not cycle back to new heights.
Peak Oil could still be the root cause as one could make the case arrival and/or awareness of peak or plateau prevented some new bubble being formed to replace real-estate and continue Wall Street's games.
I'll post a non-peak oil theory on the cause of the economic crisis. Principally, I think easy credit was largely responsible. In an effort to bail the US out of the recession that followed that dot com bubble bursting, Greenspan lowered the federal funds rate to 1%, injecting huge amounts of easy money into the system and causing and unsustainable boom. This did not bail the US out of the post dot com bust, but only set us up for an even bigger fall further down the road, which we are now experiencing.
Other factors:
Changes To The Community Reinvestment Act
Moral Hazard
Lax Regulations
High Commodity Prices
etc.
$this->bbcode_second_pass_quote('', 'I')n the period before 2008, it was not the increase in the supplies of Gold Bullion which was distorting the money supply, but a huge increase in debt of all kinds – national, corporate, banking and personal. This did not lead to any particularly large increase in the prices of consumer goods, but it did lead to an increase in asset values, and particularly in housing prices, where the high prices were financed by collateralized mortgage instruments. Eventually this monetary inflation also resulted in an almost vertical increase in the price of oil, accompanied by a similar rise in the price of gas.