Peak Oil and the economy

Nu börjar det komma intressanta kommentarer till Jeff Rubins rapport:

"Based on the last two observations quoted, I would conclude that Jeff Rubin expects the economy to zig-zag in the future, first hitting a low point, and then a new high, and then a low point again.

If peak oil is part of the equation, I would expect the height of the highs to gradually decline, and the depth of the lows to get progressively lower.

The question I have is with respect to his statement, "If triple-digit oil prices are what started the recession, then $60 oil prices are what will end it." I would agree that lower oil prices are necessary to end the recession, but it is not clear to me that they are sufficient.

It seems to me that we have a different problem at this time--a barely functioning financial system that governments around the world are trying to bail out. We also have a vastly oversized financial services industry that needs to collapse to a more reasonable size. In addition, there is a problem with non-availability of credit. It seems to me that the problem with non-availability of credit, particularly long-term debt, is ultimately tied in with peak oil.

It is difficult to have more than a tiny amount of long term debt once an economy is no longer growing. Repaying long-term debt is relatively easy in an economy which is growing, since funds available to pay back debt are greater in the future than they are at the time the debt is incurred.

In a declining economy, it is likely that either there will be many defaults, or that the debt will be paid back with dollars that are worth much less than when the loan was taken out. Because of these issues, lenders will raise interest rates to such a high level that few projects will generate a high enough rate of return to justify taking out these loans.

I believe that ultimately long term debt will essentially disappear--but perhaps not for several years. Unless we can get world's financial problems worked out, it seems to me that it will be difficult for the economy to get back to business as usual.
Instead, we will find more workarounds like Thailand's recent rice for oil deal or China's $25 billion loan to Russia in return for oil. Without a solution, we are likely to have a continued recession. If the financial problems suddenly take a turn for the worse--say, the US dollar is no longer the reserve currency, the US economic situation could take a sudden large step downward."
http://www.theoildrum.com/node/4727