When is a credit crunch not a credit crunch?

When it's an oil shock. In August, before the worst hit, the Chancellor correctly predicted it would get worse before it gets better. I observed at the time:

"It's not primarily about a credit crunch. Like the dot com bust before it, we're seeing the end of a bubble spun up by market players and governments to try and fend off something worse.

"Its symptoms are grim, sure, but the underlying problem is that we're well into the dying days of the cheap oil economy, more commonly known as globalisation."

This may have sounded like peak oil doom-mongering, but it's not just me. Jeff Rubin from CIBC World Markets recently backed it up (full pdf, recommended - there's a short intro, some heavy charts, then a three page longer piece). He says:

"While most of the world's newfound economic ills are being attributed to the ongoing crisis in world financial markets, and its associated source, the US housing market crash, both the timing and size suggest something else may be afoot. By any benchmark the economic cost of the recent rise in oil prices is nothing short of staggering."

Quite. The only point where I'd disagree with him is that his optimistic final sentence doesn't go far enough:

"If triple-digit oil prices are what started the recession, then $60 oil prices are what will end it."

The next sentence should be:

"However, the cost to the economic system will be massive demand destruction, and when declining oil production forces prices back up again the next economic shock will almost certainly be even more severe."