We are in an interesting situation currently. From the 50's to the late 80's, about 2 billion people added themselves to the western lifestyle of enough food and some luxury goods, in Europe and the MidEast and SouthEast Asia. This did cause some strains in the system, but we managed. From the 1990's to now, we've had another 2 billion jump on board, the populations of India and China. This is again a strain to the system, nobody should be surprised that this is a strain, nor should they be surprised that this has caused prices to rise. (This is irrelevant to whether or not I think the prices of goods are being manipulated, I expect prices to rise under certain conditions, I don't expect them to skyrocket without an actual shortage somewhere in the supply chain. To think that futures markets somehow predict shortages is to grant them the powers of the Oracle of Apollo - and I don't believe that for a minute.)
The US and the FED, for various reasons, decided in 1971 to leave the Bretton Woods agreement and totally drop the gold standard in international trade. This had the results of beginning a period of rapid inflation of the US dollar, and for a time increasing wages to match the inflation. Due to this monetary and wage inflation, the US consumer became accustomed to energy and replacement costs for goods to take a smaller bite each time they bought something relative to their total wages. In short, despite inflation, we got used to prices that were effectively dropping for a wide range of stuffs.
The advent of Chinese goods in the US marketplace, the competition with the Chinese for gasoline (and we will note right here that gasoline is nearly the only item bought by US citizens that is not bought in a group of other items (food) or paid in a monthly bill (water or electric or communications)) and other goods have caused prices to rise. Plus, either smart or predatory pricing by China (depending on whom you ask) has caused China to become the sole source for some materials.
So the US consumer was trained over many years to expect a slow and constant drop in prices relative to wages. This ended about 1998, and we know the result of that, people mortgaged everything they had under the assumption that inflation would resume and they'd be back in the sweet spot again. This didn't happen, instead competition from China and India froze US wages and prices started to rise. So now we've got a mess of pissed off people because their future didn't meet expectations. And under those circumstances it gets very easy to sell doom. Think of it this way, it's much easier to think, "I never saved a million but it's not my fault, it's because we ran out of oil and I spent a million on gasoline", or "The Yellow Peril has sucked up everything, those commie rats have made me poor" than to blame your own bad decisions, especially in regards to living deeply in debt.
Yes, we do indeed live in a finite world. It is, however a very large world indeed. There are many usable and cheap sources of energy available, I have observed personally hundreds of instances where energy is being wasted instead of being used when it obviously could have been sold at a profit. It was wasted because it was not necessary to capture it for the primary purpose we were using it for, and so the remainder went to waste.
There is indeed an issue currently with the total supply of room tempature liquid fossil fuels. There is not as yet a shortage, but there is a rising cost reflective of the fact that geological structures supply such liquids at a fairly fixed rate, and there isn't much we can do to change those rates. Moreover, shortages will occur in the future as we continue to "drill baby drill" because we will eventually run out of places to drill.
To solve this problem we look at the basics: we find another supply of fuel for internal combustion engines or we can switch to another type of engine. Both are possible, both technologies have been developed. It would probably be cheaper to use the SAIC type green oil solution than to totally switch engines, but the green oil solution can't be implemented under current laws and regulations. We will have to wait for a real crisis situation to develop for people to be willing to actually give up on the idea that things will just suddenly return to the 60's without basic changes, and then we'll be able to work this out.
http://seekingalpha.com/article/118658- ... pa-funding
http://www.oilgae.com/
http://www.forbes.com/sites/eco-nomics/ ... port-says/
It helps to remember that fossil fuels are exactly that in most cases, fossils. Only a minute percentage of biological matter in a given year will become fossils, thank goodness or there would not be any left for us! We'd only need to replace that relative amount that we burn, and current figures show that this can be done without trying to turn all the corn in the world into corn whiskey or all the soybeans to diesel. We are still in the era of denial, denial that change must come. But it will come, and then we will see better times.