None of this has really sunk in with the talking heads on TV. Having failed to predict the current financial crisis (which may have been triggered by high fuel prices) they now assure is it was all a temporary glitch and that service will be soon back to normal. Nobody seems to want to hear that it will get worse. While Australia has lots of coal, gas and uranium the rest of the world (with growing population) will insist on taking lots of it. However we don't have enough oil, cheap phosphate or reliable water in southern rivers. Desalination and electric transport will also increase energy demand at the same time time we are being urged to conserve. The need for sustainability must now enter into everything from migration policy to water use and power generation. The budget depleting stimulus handouts will look like an error in hindsight.

What can I say? Awesome article. Macro economists have a lot to answer for.

Okay, I'll say it. The author's thesis, as outlined in the article, is highly confused.
This article seems to be another effort to argue that there is a looming shortage of oil for our energy needs. Another article about peak oil in other words, and I am weary of articles on peak oil. The interplay between supply, demand, price, development, exploration, technology and product substitution in the oil industry is highly complex. Probably the key factor, however, is price, and that is very low at the moment. You think it may go much higher later? Invest in oil futures, and go bankrupt. You will find that oil prices will never behave as expected.
As for the stuff on money supply, most of the stiumulus efforts of late have been straight pump priming and nothing to do with monetarianism, which nobody pays much attention to these days.

Curmudgeonathome,

Are you saying we don't have a looming energy crisis? Based on current rates of consumption we will have used up most of the trillion or so barrels of oil left in about 30 years. I don't see much of a push to build more wind/solar/gas/coal/nuclear/wave power stations anywhere in Australia. What is going to replace all that oil

I don't think we have yet found a way to use nuclear or renewable energy for either agriculture (which has been described as the process of converting oil into food) or mass transport. Very interesting article - thank you. I'm glad I won't be around in 50 years time: I think it will be tough.

Hmmm... my kids will be around in 50 years. I'd like to leave them something better then "sorry we used all the good stuff. Good luck and all that."