Yes Davep, credit was loosened prior to the panic. Here in the US by allowing Moody's Standards and Poor to green-light housing loans they perhaps shouldn't have. (someone should have known that the price of oil would skyrocket. We did here at peakoildotcom) But your attribution to the Fed is nonsense. Those loans could not be paid back . . . because unlike every previous housing boom that particular housing boom did not create a general overall economic boom as all previous housing booms did. It created failed loans. It created massive contraction.
I didn't attribute it to the Fed. I attributed it to loosening credit prior to a contraction in credit. The loans helped create broad money just as any other loans did. It's only when the panic set in that things got bad generally. Same process as ever, different specifics as ever.
What's cheap? All modern and ancient economies rely on energy, expensive or cheap, human labor or nuclear power. What's the difference? Semantics as far as I am concerned.
We don't all get more productive every year. We use cheap fossil fuel energy. The specifics in this case are the exponential nature of the current economic system that requires constant new money creation to pay off the interest of debts where the principal has been paid off. It only works when growth outpaces debt. We've kinda hit that limit. It's got nothing to do with semantics and everything to do with a ponzi-scheme style monetary system. The bedrock of that system is no longer the infinite driver for growth that it once was. I'm sure we can agree on that.
It will fail.
It's a deliberately opaque economic system that tries to hide the simple fact we're being screwed by bankers behind myriad artifacts of the money system itself. Letting it die of natural causes is going to be very painful for a lot of people. Which is why I think it's important to understand its mechanics. YMMV.
Your post make no sense. Peak oil is good for the non-human ecology. Without monster earth-moving machines, there are no roads into the Amazon. Or deep coal pits. For you to believe we can continue this planet-raping madness without oil is crazy. You are a peak-oil denier because you do not understand the role of energy to economy.
You again missed my point. I'm talking about the link between cheap energy and the ability to have a debt-based growth model. Now we're hitting peak oil the economic effects are getting pretty grim, but they're soldiering on regardless as the inertia is very strong (and the vested interests have very deep pockets and a penchant for power). Understanding the economic model is a part of the overall process of change to more sustainable governance including moving to an economic system that doesn't rely on debt and growth.
Anyway, server's not playing ball tonight so I'll leave it at that for now.
What we think, we become.