[...] The disturbance of global oil markets as the permanent energy crisis begins is liable to interrupt global commerce and global travel. Fewer… wi… - James Howard Kunstler

Money is a wonderful thing. It started out in human history as hard currency, generally gold or silver. These are commodities that are deemed to have intrinsic value but also act as a means of abstractly representing wealth accumulated out of other real commodities. Relatively little hard currency ever circulated freely in the preindustrial world. In that world, most wealth was actual, existing in the form of land, palaces, fleets of boats, bolts of cloth, barrels of grain, standing timber, herds of cattle, and so forth. These were generally things that could be traded, and exchanges of these items were often facilitated through the medium of gold or silver, hence the term "medium of exchange." [The] hard currency could also be acquired by theft or plunder, though that did not necessarily affect its value. Note that the value of [the] hard currency is transcultural. Gold and silver had high value to the Europeans, the Chinese of the Sung dynasty, the Inca, the Aztecs, the ancient Egyptians, and the California Forty-niners.
The industrial experiment took the idea of currency (money) to the next level of abstraction—as hard currency can represent actual goods, so paper currency can represent hard currency and actual goods. As trade increased and took place over ever-greater distances, paper promises to pay hard currency began to steadily take the place of the hard stuff itself, which was cumbersome, hard to lug around in large quantities, and subject to theft in transit. So, to streamline these trades, all kinds of certificates were used as equivalents to hard currency: individual IOUs, bills of lading, letters of credit from rich people, [and] promissory notes issued by guilds. In time, the use of paper certificates became… more normative and conventionalized. Protocols of exchange were established. Institutions were created to process them. This process of managing monetary affairs—of wealth abstracted in [a] paper—was called finance.

What is... not comprehended about this predicament is that the developed world will begin to suffer long before the oil and gas... run out. The American way of life... can run only on reliable supplies of dependably cheap [hydrocarbons like] oil and gas. Even mild to moderate deviations in... supply will crush our economy and make… daily life impossible. Fossil fuel reserves are not scattered equitably around the world. They tend to be concentrated in places where the native peoples don’t like the West in general [...], places physically very remote, places where we realistically can exercise little control [...]. [...] We can be certain that the price and supplies of fossil fuels will suffer oscillations and disruptions in the period ahead [...]. [...] The decline of fossil fuels is certain to ignite chronic strife between nations contesting the remaining supplies. These resource wars have already begun. There will be more of them. They are... to grind on and on [...]. They will only aggravate a situation that, in and of itself, could bring down civilizations. The extent of suffering... will certainly depend on how tenaciously we attempt to cling to obsolete habits, customs, and assumptions–for instance, how fiercely... [we] decide to fight to maintain suburban lifestyles that simply cannot be rationalized any longer.

The supernaturally low-interest rates provoked an orgy of buying and the orgy of buying bid up the prices of the houses, and as the prices of the houses levitated, the owners entered another new and strange zone of hallucinated wealth accumulation using the latest contrivance: the refinanced mortgage. Re-fis allowed house owners to use their houses as though they were automatic teller machines. Say a person bought a house in 1999 for $250,000 and the house was appraised in 2003 at $400,000; that person could refinance with a substantial "cash out" privilege, converting the imagined increase of value into disposable income, which could then be used to buy [stuff like] motorboats, home theater plasma TV screens, or trips to Las Vegas. Refinancing prestidigitated an estimated $1.6 trillion for the American economy over a five-year period, and much of that "money" was deployed purchasing "consumer" goods—mostly made outside the United States. From 1999 to 2004… a third of all house owners indulged in cash-out re-fi mortgages. […] Behind every extravagant cash extraction lay the belief that at some future date, the house would be worth a lot more than the re-fi price and could be readily flipped.