prudentinvestor

Peak Oil, Cars, and Depressions

Very sobering article.

You state that "... basically, automobile manufacturers, in their drive to sell as much as possible, “brought forward” future sales of cars.....". But this is also true of furniture, luxury clothes, boats, snowmobiles, motorcycles, home remodelling, etc. Just as you said about cars, many people bought these things in excess of their normal needs and wants, just out of boredom.

The reality is that the fed, like the automakers, in its eagerness to stimulate current demand by easy money for many years, essentially reduced future demand. Consumption that would have normally ocurred over the 20 years 1993-2013, was actually accelerated and made (by the fed's easy money) to occur in the 15 years 1993-2008. Now the normal demand that would have ocurred in the next five years, 2008-2013 has been decimated by this artificial acceleration of consumption.