Some people I used to read at peak oil webblog The Oil Drum have formed their own weblog, The Automatic Earth, which focuses on the economic crisis.

This is a very wide-ranging article with many helpful graphics, a few pieces of which I have quoted here:

The Case for Deflation

Deflation is ultimately psychological. Without trust we will see hoarding of the cash which will be very scarce in the absence of the credit that currently comprises the vast majority of the effective money supply. The combination of scarce cash and a very low velocity of money will be toxic.

Money is the lubricant in the economic engine and without enough of it that engine will seize up as it did in the 1930s, when farmers dumped milk they couldn't sell into ditches while others were starving for want of the money to buy food. There was plenty of everything except money, and without money, one cannot connect buyers and sellers.

Potential buyers will have no purchasing power as they will have lost access to credit and their ability to earn an income will be hit by spiking unemployment. Those who still have jobs will find that they have no bargaining power and there is therefore no wage support.

Sellers and producers will have no market and will themselves lose the means to purchase supplies or raw materials for the things they would like to produce.

If conditions remain frozen for any length of time, they will go out of business. The deeper the collapse, the more protracted the trough and the more difficult the eventual recovery.

...

Unemployment will go through the roof as the prospects for selling most goods and services decline dramatically. In the developed world we are nations of middle men - generally service economies where we make a living figuratively taking in each other's laundry.

Most of us produce relatively little. Even those who do will find almost no market for their exports, and those who could find buyers may not be able to send shipments as credit contraction prevents shippers from getting the letters of credit they need to ship goods. ...

Unfortunately middlemen are almost completely expendable, and the services of others are likely to become unaffordable for the majority very quickly. While there will be a huge surplus of labour, and the few who retain purchasing power will be able to hire anyone they want for very little, most people will have to do everything for themselves, as poor people have done throughout history and as most of the population of the world does now.

Not only will we lose access to the paid labour of others, but we will lose our virtual energy slaves as well. This will represent an enormous fall in the standard of living for the vast majority.

Update: Rainforest treaty 'fatally flawed'

A vital safeguard to protect the world's rainforests from being cut down has been dropped from a global deforestation treaty due to be signed at the climate summit in Copenhagen in December.

Under proposals due to be ratified at the summit, countries which cut down rainforests and convert them to plantations of trees such as oil palms would still be able to classify the result as forest and could receive millions of dollars meant for preserving them. An earlier version of the text ruled out such a conversion but has been deleted, and the EU delegation - headed by Britain - has blocked its reinsertion.

Environmentalists say plantations are in no way a substitute for the lost natural forest in terms of wildlife, water production or, crucially, as a store of the carbon dioxide which is emitted into the atmosphere when forests are destroyed and intensifies climate change.

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