In the current race to break up the globalized economy, between peak oil and peak capital, the money sure looks like it will run out first. There is more to this interaction that we hear about.
The housing bubble is leading this process and seems to be popping right now. I think the consequences, for this year, will be far more severe than anything peak oil is likely to deal out. I don't see how we can have a soft landing. America is already in a recession, but for the faked GDP numbers, and we are running only on freshly printed cash from the Fed. So, after the inevitable market crash, sparked by a bankruptcies in GM, Ford, Fannie Mae, and many others, our economy will come to a near complete halt. This will surely create market crashes and recessions in China and many other countries. It is a huge world of dominoes out there, all set to knock each other down. The massive and impenetrable business of derivatives, originally created to share and minimize risk, has been perverted for the sole purpose of maximizing profits. If any of the huge derivative based hedge funds fall down that will make the financial depression far worse.
The real estate and inflated currency boom is not only in the USA. Australia, Britain, and much of Europe and Asia are enjoying similar monetary free-for-alls.
The short term effect will be falling energy prices! Oil back down to $40 or $50. The reason is that we are at peak and therefore by definition pumping more oil than ever. There is a huge vested infrastructure in oil, gas etc. They have to try to keep pumping to pay their rising capital costs.
Demand may not fall so much in the USA because it is built in structurally. But in Asia they have not been heavy consumers of energy very long. They can conserve by getting the bicycles out, far easier than we can. Given the Asian propensity to save money in a crisis, Asian energy demand will plummet.
The real problem with this scenario is that it will make the capital-intensive process of developing an alternative energy infrastructure impossible to finance due to unprofitability. As almost everything will be impossible to finance anyway.
Then, as the dollar and other currencies continue to bounce down the road to utter worthlessness, commodities (such as oil) will rise in price. But only because the fiat currency is worth so much less, and because it will be so hard to raise the capital to produce the commodities, not because there is any more demand for them. I am just saying I think we'll run out of money before we run out of oil.