Due to the lack of controls in the financial system in the US and around the world there has been an inflationary gap between supply and demand.
The sub-prime mortgage fiasco was a result of financial deregulation which allowed banks to issue out 100% finance with no repayments aka Ninja loans.
Wages growth has spiraled out of control. Asset prices have risen dramatically and the asset bubbles have burst and fallen down by 30% in most countries.
In most countries around the world they have seen doubling of Unemployment rates. The credit crunch has slowed down business activity around the world. Due to the lack of controls in the financial system in the US and around the world there has been an inflationary gap between supply and demand.
The economic crisis has been directly related to the Peak in global oil production supply peaked in 2006 or 2007. The global demand for oil continues to rise and rise. The main two developing nations insatiable demand for oil: India and China desperately need oil to continue development and feed its 1.4 billion population. Oil is a finite resource and is supply constrained. Expect the cost per barrel of oil to escalate as the oil supply slows down.
