In at least some cases, might an oil price spike be the effect of the last stages of a credit-fueled bubble?
Recall that home prices and sub-prime lending reached their peaks and began to reverse in '06:
Yet the price of oil didn't start its parabolic rise until after that, eventually hitting its peak in July of '08:
The fact that housing and sub-prime lending peaked in '06 but the price of oil didn't peak until '08 seems to suggest, IMO, that the oil price spike did not cause the financial turmoil. It's the other way around. More specifically, the global financial markets' sudden and near-simultaneous "discovery" of the credit boom's massive malinvestments caused one last, desperate flurry of economic activity before the global "heart attack" finally struck.
Just as an addict who's overloaded with cocaine attempts to completely repudiate reality in a flurry of unsustainable mania in the last moments leading up to heart failure, the credit-loaded global economy attempted to completely repudiate economic reality as it sucked up oil like crazy in the last few months leading up to oil's peak.
Oil's parabolic rise and blow-off top in '08 seem to have clearly followed the sub-prime meltdown and the way it revealed what a sham the credit-bubble economy had become. Oil peaked, then the global financial "heart" finally stopped. Widespread demand destruction ensued, causing the price of oil to plunge.
The point is that without the credit bubble, the eventual discovery of the malinvestments, and the resulting peak in home prices and lending, it's quite likely the parabolic rise in oil prices in '08 would not have happened. I admit I could be completely wrong about this interpretation, but it's the one that has made the most sense to me for a couple of years now. It also happens to mesh with Austrian business cycle theory. If any of you has convincing evidence to the contrary, I'm interested in seeing it.
