Michael in Adelaide has it right !
He did however fail to explain to some who thought it strange that oil
price could cause a crash.

It worked like this;
First this is what set it up.
Oil production stopped rising in 2005-2006.
As price started up during 2007 ethanol also became more expensive
pushing up the price of grain and subsequently food prices followed along.
This started to put pressure on mortgagees to make choices of either
driving to work, buying food or paying the mortgage.

If you look at the figures mortgage default rates rose during 2007
and early 2008 finally triggering the Collaterised Default Swaps (CDS).

It was the sudden activation of the CDSs that revealed how fraudulent
the whole CDS system was as oil prices soared to $147.
This caused the collapse of Learmans and several others.
This caused more unemployment and the crash was then made worse.

All this hit the fan when the cost of oil reached about 4% of GDP.

But as someone else mentioned we now use about 5 to 6 times more oil
each year that we discover each year.

There is only one way that can finish !

Well Michael, as you appear to be being deliberately untruthful about Malcolm, and my attitude to Malcolm's piece, I guess that must make you a liar. As I say, not an accusation I generally level, but you invited me to.

The only substantive thing that Malcolm could have said that could be construed as being deliberately wrong was the suggestion that Kanck had supported a one child policy, but there seems to be plenty of evidence that this assertion was correct, including from her party, the Australian Democrats.

Bazz, I acknowledged that fuel prices would have contributed somewhat to mortgage stress in the US, but there was no dramatic uptick in inflation, so one would have to say other costs were dropping at the same time. I'd say refinancing problems and the bust of the boom were the major causes, plus the finish of the initial low interest rate periods that many loans had.

Graham Y; Food price rises were quite severe and were hit not just by
grain price rises but the transport and production of food as well.

It was all so predictable. Many warned that it wold happen and it
happened within a year or two of the predicted date.
See Campbell, Deffeyes and others.

Unfortunately all politicians, except Martin Ferguson, refuse to look
at the problem from this aspect. It seems that many of them do know
about the problem but when spoken to try to shift the conversation
away to other problems.
Of course Barnaby Joyce has also spoken on the subject but seems to
have been silenced.

Energy and its ever increasing cost clearly contributed to the GFC. At least 70% of our economy is the domestic economy.
When energy charges impact negatively on fixed household budgets and the cost of virtually everything else, we simply have less to spend on the domestic economy.
Oil is the product of algae and millions of years of metamorphose.
Some algae are up to 60% oil, and virtual child's play to extract.
Our local High oil content algae is in demand in the US?
Perhaps we should patent it and then trade that patent for the one that catalyticly converts methane, NG/BIOGAS, into liquid methanol. [A substitute for petrol/Avgas.]
Science has already established a way to circumvent those years/metamorphose.
A couple of mercs are running around Silicon Valley on algae sourced bio-diesel. And Dutch jets are flying on algae sourced fuel?
All that is required are economies of scale to make this source of endlessly sustainable future fuel, far less costly than the naturally occurring variety.
Heavier thicker oil is available just by recycling our waste tyres.
All Australia's tyres, and industrial microwaves, could potentially, produce something in the order of 500,000 barrels of the stuff annually.
Yes sure, it will take money to develop these and other equally promising alternatives.
That money will likely come from long overdue pragmatism/development and exploitation of our most promising northern hydrocarbon prospects, which according to published industry experts, could even eclipse the entire Middle East's reserves?
Arguably, the real reason why they are or have been locked away?
Unfolding Middle East volatility, may well force a change of really stupid, shoot yourself in your own economic foot policies, and see this probable source of quite massive future export incomes, [which if developed as a public project;] could conceivably, double or treble internal revenue.
As opposed to what happens now, with most of our natural wealth prospering offshore entities and foreign investors/international, tax avoiding, cartels?
And or, petrol pump prices, which are progressively killing our economy!
Rhrosty.

Yes algae is hopefully a future source of liquid fuel.
There has been a lot of optimism about shale oil in the US and elsewhere.
I have seen a calculation, on the Oil Drum I think that the shale oil
production in the US will delay decline by two weeks !

Which brings me to Rhosty's comment on Australia's tyres producing
500,000 barrels. Hmmm, that would last 12 hours !
Well every bit helps.
Then what would be the energy input to process those tyres ?
So after the processing would there be 6 hours of fuel available ?
Per year that is !

No we are going to have to think of something else to get recovery going.

ICELAND!

http://online.wsj.com/article/SB10001424052702304203604577396171007652042.html

Haircut for the bond holders, bankruptcy for the banks, prosecution for the culpable management, debt relief for the lower classes, devaluation of the currency, expansion of the welfare net.

Fairly common sense response really - and the bond holders who swore they would never again come back? - yep they're back.

Or you can go on doing things the US way as Europe has by protecting the bond holders, bailing out the banks, rewarding corrupt management, sustaining a currency value, punishing honest debtors and cutting welfare. All the while pretending you are defending free enterprise.

What idiot thought that could ever work? - The banking fraternity who created the problem

In reality, no one thought it would work.
Welcome to the Will to Power; where there is no purpose but power itself: where wars and financial crisis remain permanent fixtures. I could go on but it is pointless.