)Julie - I know that people have been to see you about peak oil and have explained the situation to you. The world's current economic situation was predicted by the "peakists" 10 years ago and the fact that oil production is on a plateau while demand for oil (and its price) rises is the main factor underlying this crisis. (The inability to expand the physical economy due to energy limitations leads to "expansion" of the financial economy - i.e. more debt generation leading to illusory growth in value - e.g. property values.

What this means is that no amount of "stimulus" (more debt generation) is going to bring the world economy out of its current malaise. The only truly useful stimulus would be that which goes into supporting low-energy agriculture and renewable energy projects.

We have entered a 50 year contraction phase that will end with a new equilibrium between what humans demand and nature can provide. A true free market might help in some ways and we have certainly not had that with public money being used to bail out banks as a reward for their bad behaviour. but regulation with the interest of the public at heart will be necessary to maintain social cohesion as the world economy contracts and people scramble to hoard for themselves the world's dwindling resources. Of course, forcing population growth in Australia under such circumstances is insanity incarnate.

Julie fails to understand a number of important issues. Governments do not drive the economy? If you consider all the important things, all the services that are most beneficial to you, all material needs and wants, how many of them were or are produced by governments?

As Albert Jay Nock has stated “governments have no resources or power of its own. Everything it has, it has taken from us. It produces nothing, but exists only to the extent it can feed off its host - wealth creation aimed at serving customers in the private economy.”

As Bill Bonner rightfully stated, “GDP is just another phony government number.”

GDP growth alone is a fraud with the number not telling you anything worthwhile. It matters not how fast an economy grows it is the growth per person/capita and more importantly whether or not that growth is real. Growth as governments have grown to define it is not the same as prosperity. Politicians and economists are quacks when it comes to understanding the real economy and it is availability of cheap energy and the access and continued access to cheap non-renewable natural resources.

Our federal and state governments depend upon private-sector growth so it can be taxed. Likewise local governments are dependent upon the same flawed model.

Growth and economic success is not generated by the government.

It’s insanity to believe governments create jobs and economic wealth and prosperity, this occurs only in the private sector.

As worldwide non-renewable natural resources decline, populations continue to grow and more and more people consume these resources, there can be but one outcome. We are in the early phase of a permanent shift toward austerity whether we like it or not, get used to it.

As Benjamin Franklin said “"There seem to be but three ways for a nation to acquire wealth. The first is by war... This is robbery. The second by commerce, which is generally cheating? The third by agriculture, the only honest way”.

Julie, your complete lack of knowledge of limits, energy and per capita economics is a flaw in your deluded thinking.

Julie, the most important part of your otherwise rambling, rather pointless article was contained in the following:

"Similarly, the ongoing threats of an Israeli and/or US strike against Iran’s nuclear program has raised concerns of retaliation from Iran that could include missile attacks on Saudi oil infrastructure and the closure of the Strait of Hormuz."

You forgot to mention that Israel's precipitous action might well start a nuclear war that might see off the human race.

The Australian Government and the Opposition, along with other 'democratic' Governments around the world, should be jumping up and down trying to stop Israel's madness (which is facilitated by the U.S. of A.).

Yet there is complete silence from so-called leaders like yourself.

Julie, another lightweight piece of analysis! Why do you bother writing such articles?

I love this line:

"A solution to Europe’s ongoing financial and economic crisis has proven elusive, despite the attention of some of the finest economic minds in the world."

These so called 'finest economic minds' who did not predict the GFC will not be able to solve it either. Why? Because their economic models of exponential growth do not conform to the harsh reality of a finite planet.

Limits to growth Julie. They are what is keeping the hoped for recovery from taking hold. Any policy position that does not acknowledge them is bound to fail.

The Great Depression and the more recent GFC was preceded and caused by the accumulation of more and more of our finite wealth in fewer and fewer hands.
Moreover, the Great Depression started out as a still manageable recession that was turned into the Great depression, by Hoover's and other's ultra conservative Ideology; and the contraction caused by their imposed austerity.
We were rescued by Keynesian economics and expansionist/make work policy paradigms.
Every western style economy rest on just two support pillars! Capital and energy.
The more we pay for energy, rents etc, the less we have for the discretionary spending our domestic economy depends on.
Around the US and almost every capital, are the tent cities of the unemployed, the homeless and displaced, a la, the Great Depression.
Extreme right wing Idealogs are once again, trying to impose the very same contraction/austerity measures, that turned a still manageable recession into the Great Depression.
The most profound lesson of history teaches us, that no rigid recalcitrant right wing Idealog ever learns the lessons of history. But may well rewrite and otherwise misrepresent the most cogent historical facts? Thus we see Holocaust deniers, climate change deniers, and economy contracting austerity presented as a remedy/method of/for, producing economic growth and expansion, we need to address our current global economic stagnation/reversal!
Yes, as others have pointed out, energy and its overpricing, by market cornering, profit demanding/price gouging middlemen speculators, have created much of the current problem, further compounded by Middle East volatility.
We should see and seize the opportunities and the economic growth these challenges provide/present; and not just for us, but friends and allies alike.
By, for starters, exploring and exploiting the possibly quite massive hydrocarbon reserves that lie to our immediate north, a euphemism for the Great Barrier reef.
Rhrosty.

Michael & Geoff, the US is currently moving towards being an oil exporter again, & would be awash with the stuff if they could just get rid of Obama, & start harvesting on government lands.

As Rhrosty keeps telling everyone, we have enough oil for a century or so in Queensland, & enough gas for a few more, once we start to harvest it, & that's just the stuff we know about.

However Rhrosty, if you think expansion is the answer to the EU & it's overspending welfare states, why don't you go buy Greek & Spanish bonds. The returns are very high, & you could participate in the experiment to see if you are right. Help keep them spending, & save everybody.

I do agree with you all that Julie does not do herself any favours with these pieces of fluff, except perhaps to show us how many have believed all the spin they've been fed these last few years.

For those of you worried about waste, start at the top. Eliminate the UN, & the EU, & there will be billions to go around.