Admittedly, things are not good. But the End-of-the World bandwagon is getting crowded. I posted some doomsayings earlier. But in case you're not depressed enough or harbor some sad delusions that the sun will shine again somewhere, I thought I would begin posting the choicest morsels of pessimism to let you realize what wide-eyed optimists you really are.
OK, let's start with a Peak-Oiler. Now remember, oil at $45 was not on peaker radar a scant few weeks ago. Still they seem to roll with the punches, finding the downside of declining consumption.
I am becoming more and more convinced that the drop in gasoline prices has a huge amount to do with all of our credit problems (which in turn are related to limits on the oil supply). These credit problems are causing more and more defaults on debt and more and more bankruptcies. These defaults and bankruptcies have a double impact on oil prices--partly from reduced demand, and partly from distressed sellers disposing of futures contracts at low prices, because they are easy assets to sell.
We often hear that "soon" oil prices will hit a bottom, and start shooting back up again. I am less and less certain that this will be the case. Instead, I am concerned that we may on a relentless path to a point far below the point where energy companies can expect to have any chance of making money. We may be on a path toward more and more bankruptcies and defaults of all types--energy companies, owners of commercial real estate, homeowners, financial institutions, auto makers, airlines, and many more. If this is the case, there will be a huge strain on governments, and some may find it necessary to default on their debt.
In order to ultimately get past this crisis, it may be necessary for governments to establish new currencies in which debt is severely limited, and at the same time unwind the debt in the existing currency. I expect that a huge amount of derivatives of all types will need to disappear as well, so that financial assets start bearing a close relationship to physical resources. [More]
Hot stuff, huh? A whole new monetary sytem - hmmmm. If you read closely, I find many of the more extreme forecasts are preludes to some whopping social/economic/political change long favored by the authors.
In short, this crisis looks like the chance of a lifetime for culture remodelers.
(More as I find 'em - or send in a link to your favorite by e-mail or comment.)