As oil prices recede there will be no end of attempts to link peak oil with the credit crisis, but to me they ALL fail, bigtime. The connection is a mild one at best. We just have to deal with it rather than suffering from acute peak oil tunnel-vision.

Peak oil didn't cause the tower of derivatives, hedge fund wipeouts, etc...There would be economic turmoil, regardless.

In terms of oil price, keep your eyes on Georgia, and the former USSR. US could continue it's attempts to encircle Russia, militarizing former satellite countries, and bringing them into NATO. It's all been put on hold for the elections, but the strength of the dollar, resting on the American ability to punish dissent, globally, could be called into question. People could easily ditch their American treasuries, at that point, repatriate their wealth, or invest in gold.

The ability to control oil price, through friendship with Saudis, control of Georgian, Azerbijani Caspian Sea pipeline, is becoming more questionable. The key issue is CONTROL, and if the US loses it, through further deficit spending on warfare, or loses it through NOT spending it on warfare, either way they're screwed, and the world will realize this, and ditch treasuries. This would make oil more expensive for Americans but likely less expensive for everyone else, as their currencies could benefit from the pull out of treasuries.

US VMT, up to early 2008:



US VMT against GDP, up to 2005:



GDP is a rather debased figure though, the impact may be more severe than this suggests.

people driving less doesn't have to be coupled to a recession, it could be part of a lifestyle change.

but in the US economy, people driving less = economic contraction.

Regarding the financial meltdown and peak oil ...

I recall reading a short paper by Douglas B. Reynolds that attempted to model the subjective probability of success of "finding riches" given the world had arrived at peak oil. This was done in game theory.

Of course, the model was a simplification ...

But the answer was --- that euphoria broke out just as peak oil was reached. Does this sound familiar??

You can make a case for peak oil being the trigger, but my feeling is that the increase in fuel prices had a relatively small effect on the current crises.

If peak oil and high fuel prices were the only cause, we would now see improvements in the economy since gas prices are coming down.

Right now I think we're just seeing the results of all the gambling, greed, corruption, hypocrisy, sense of entitlement, wastefullness, ... , I could go on, of government, business and many others. Of course there are many innocent victims in all of this also.

We will most likely weather this storm and begin a recovery. That's when I'm worried that we'll see the effects of peak oil when the recovery brings an increase in GDP and gas prices go through the roof. Then it's a slowing of recovery and slumping again. We'll cycle this way for years but the trend will be continually down. I'm not sure where it'll end.

Peak oil lessened the impact of the housing value collapse because it helped pop the bubble a few months or so earlier.

Now the deflationary cycle brought about by peak oil will mask its impact by supressing demand for a while.

Good news bad news really.

I would agree with this. Oil prices are not the cause , or even trigger for the economic problems we are seeing.

Energy costs in North America are nowhere near the amount needed to paralyze an economy. Banking de-regulation, low interest rates, and a real estate baloon probably have more to do with it. I think speculation, and market manipulation have more to do with the yo-yo price of oil than peak.
Although I think it's the convergence of a host of factors.

I will say that when the real effects of peak-oil begin (the downslope of the bell curve begins to really steepen, and real supply contraction occurs,) you will see a whole lot more craziness in the real economy.

At the moment, you can still buy bananas, and fresh produce in winter. When energy really gets expensive, that's when TSHTF.

Cheap oil DID enable the massive build-out of gargantuan, cavernous "homes" in the nether-regions accessible by SUV. That "tower" you mention was built on the paper backs of mortgages for cheaply constructed houses. The toppling of all that crap happened with the housing collapse.

Cheap oil is the sine qua non of suburban overbuild. Those days are over. There will never be such a build-out again. We literally don't have the energy for it.

Hi, am searching for books, articles, and discussions regarding the effect of high energy prices on economies (ie. the relationship between oil prices and recessions/depressions).

Surprised to not see much literature on the topic. Im sure its out there. Im hoping you readers can direct me. Thank you.

Did you try:

http://books.google.com/books?q=energy+recessions

Read Stephen Leeb's books, he covers this.

thanks for the replys. reading Leeb's now. Though im not sure if Leeb discusses the impact of high energy prices on an international level. Will add more comments on this topic as i read.