James Howard Kunstler, at "Clusterfuck Nation," has been making a lot of sense lately, despite his tendency to hyperbole.

One point is particularly salient to the current situation. Kunstler is saying what I've thought for months, that the financial crisis is part of a "convergence of crises," not the least of which was the run-up in oil prices over 2007-2008.

The surge in demand in that period that came from China and India in particular has ebbed as consumers worldwide have cut back on their driving and growth has declined. And the downturn, along with a collapse in the price of oil, has hit the energy companies as well, with exploration and development of new sources being put on hold.

One inevitable result of this, which the politicians don't seem to be discussing, will be another run-up in prices as the world economy gets going again. That's likely to hurt the recovery, perhaps to cripple it.

Thus while a credit and debt bubble with excess leverage set off the current crisis, don't look to see the economy recover just by increased lending and the re-inflation of the bubble through government action to restore "liquidity." Add to this that the real issue with many banks is solvency, a fact that most public officials and certainly the banks themselves are lying about, and you've got a recipe for a cyclical bust replacing both the relatively stable period since the 1970s oil shocks, brought on through monetary policy, and the boom and bust cycles that characterized capitalism prior to that.