Let’s re-examine the house of cards that is the global financial system. Emerging markets seek export-led growth: they undervalue their currencies, so their exports are more competitive purely in terms of price. That’s essentially a subsidy to consumers on the other side of the table – those in the developed world. As emerging markets accumulate surpluses, they recycle them: they lend them back to the US and UK in the form of government and mortgage debt, stabilizing their economies, and amplifying the existing consumption subsidy through leverage.
Amplifying that artificial cheapness is the simple fact the true costs of production haven't been factored in - until now: very real costs like pollution, community fragmentation, and abusive labour standards.
So we’ve been able to consume mercilessly and remorselessly – with no regard for the human, social, or environmental consequences, to us or to others.
It’s not just cheap oil we’re addicted to: it’s cheap everything. And the world we’re entering isn’t really of Peak Oil as it is one of Peak Consumption.