If your predictions are correct Futilist than you should have included years prior to this downward spiral event to make your point across, since it is obvious what we are looking for is a cyclic repetition linking oil price increase to economic downturn.
Here is a graph of oil prices and recessions over the long term. Recessions are the grey bars. The oil price spikes in 1973 and 1979 were induced by OPEC oil embargoes. The ones following that were not. The recession in 1970 corresponds to the peak of US production. All the recessions since 1970 have been preceded by oil price spikes.
Here is a closer look. The thing to notice here is the rising price volatility since around 2000. One of the arguments against peak oil that is often heard is that the recent massive rises in oil price are due mainly to speculators. But why did speculation suddenly become so pervasive? And how did it persist for the past 13 years? One would think that unscrupulous speculation that could do so much economic damage would surely be illegal by now, yet it is not. A simple explanation for this apparent contradiction is that, obviously, speculation did not cause the oil spikes in the first place! Oil is rising exponentially in price because the easy oil is gone, and it is becoming more expensive to extract what remains. That is very logical and well supported by the data. In fact, it was predicted years before by peak oil theory.
Here is another way to look at the data, this time taking into account oil production. This graph was produced by geologist Kenneth Deffeyes during the 2008 oil price spike. In 2007-2008 world production hit 74 million barrels a day or so (about 27 billion barrels per year), and it just couldn't grow any further. Demand began to exceed supply and the price began to shoot upward. The three curved lines show the cost of oil as a percentage of GDP. At the time the graph was made, the cost had just rapidly exceeded 5 percent of GDP. More than 5 cents out of every dollar that each of us earns now goes to pay for oil. That is like a sudden 5 percent tax hike on everyone. No wonder oil price spikes lead to recessions. Duh.
Here is another graph that debunks the idea that price increases are due to the control of pricing cartels like OPEC. During the 15 year period from 1970-1985, oil prices were largely controlled by OPEC. But that changed drastically in the period from 1986-2009. From now on, if the economy begins to recover, oil production will rise to it's limit, and prices will spike again, until another recession creates enough demand destruction to once again collapse prices. Then the cycle will begin again. Lather, rinse, repeat. There is now an absolute ceiling on economic growth. We will bounce off of this ceiling over and over until the economy is completely destroyed. Oil prices are now beginning to spike again. With the ongoing US and Euro debt problems, this next spike could lead directly to a complete social collapse, or perhaps it might take another spike or two to do us in.
Oil production may currently be increasing very slightly, but at the same time the cost of production is rising exponentially. We just aren't getting the bang for the buck that we used to get with cheap oil. That is why we can't ever get a complete economic recovery going. And geologists predict that we will begin to enter the depletion phase of world oil production sometime in the next 3 years, perhaps this year. After that, net energy will turn negative. There is no chance in hell that alternatives can replace oil within the next 30 years, let alone the next 3! World wide industrial civilization collapse must soon follow negative net energy. How could it be otherwise?
---Futilitist
PS---The thread that very few people on this site want to discuss rationally has just received 80,810 views in one month!
