PowerSwitch

High oil prices caused inflation, which caused higher interest rates and stretched a lot of households, which caused 'sub-prime' borrowers to default on their debts, which led to the credit crunch, which caused the real economy to go tits up.

This is tosh, there is not $180 dollars in the system just $100 if you lend out 80% of something and retain %20 overall there is still 100% My understanding is that, if you deposit $100 in the bank, the bank uses that as the 20% reserve holding and can loan out $400 based on that, so a 100% results...

Will leaving oil in the ground longer rather than racing to produce it now not help lessen the initial severity of the decline when it commences?

Ireland's is 8% and projected to be 10-12% in 2009. Not a good time to be working in the services, financial, travel, construction, manufacturing or housing sectors.

Skeptik So..we have a period of deflation, possibly followed by riproaring inflation once confidence is restored and the economy turns upwards. Yip, that's where I'm coming from too, although there is liquidation at the moment, Mr Inflation has just picked up his next bowling ball and is bringing hi...

I can see where you're coming from, but the injections of liquidity are in the form of loans and I could see there being a tsunami of money rushing through the system when things get going again. Money supply in the us is up 90%

I remember last time the oil price was 50/barrel it was seen as an inflationary price. Also, we are seeing massive money creation - the loans are being written off, but the money has already been spent - what's been destroyed is the need/ability to pay it back, so essentially people are having their...

RGR: Olduvai is a bad joke already. Lets talk about something meaningful instead, like Santa Claus or the Easter Bunny. I'll start with Santa Claus..... Big red hat, furry hem, big fat santa suit. Flys on a magic sleigh. Easter bunny, jumps around laying chocolate eggs wrapped in foil. How about we ...

Holy ship! We're sailing downhill from here. Throw out the lifeboats cap'n.

If you look at it on a graph, it is one of the scariest things I have seen in a good while..... http://www.safehaven.com/article-11696.htm In June of this year - it was 11,500 - it is now less than 1000!! Most of that drop took place between September and mid October - and it's getting steeper. Hasn...

That's a very good point Paul, re the fact that if money has been borrowed, it has been paid to someone to buy something and hence the money has not actually disappeared from the system. So essentially we are not seeing the destruction of money, we are seeing massive inflation of money. That is a sc...

Billhook's right there is huge dislocation in paper and physical gold prices. I would say the reason for the dollar's current appreciation (which will prob last as long as the deleveraging process and no longer) is the result of huge numbers of investors cashing in their stock/commodity/bond chips, ...

Mosts of the big funds and investors have made highly leveraged investments - e.g. say they have 10 million to invest - they invest in 100 million of equities or commodities by putting down their 10million as, basically, a 10% deposit, with the agreement they will buy or sell the remainder by a part...

I would't be surprised if a lot of the drop is due to winding down of leveraged positions - Lehman assets (CDS etc.) are currently being wound down which is feeding volatility at present.

I heard an even more serious rumour - apparently we are nearing peak oil!!!!