The Oil Drum

Still looks like a boutique thing to me. Not many places on that list, and most of them seem to be concentrated in big cities or tony resort areas.

Starbucks is the largest purchaser of Fair Trade coffee in North America. They don't serve it in brewed form but they sell it in bags. So if you're lucky enough to have a Starbucks in town :) then you should be able to find Fair Trade coffee.

Re: " The stark reality is that the Oil based economy needs to declare bankruptcy and start over."

Could you please expand upon this? Do you mean for the world? The US? Is this a case where unilateral action can be done?

Here is a basic example of how our grand global economy works today.

I go to a bank and borrow 100% or more of the value of a home from a bank using a exotic bank loan. The only real cash in the transaction is bank fees. Remember this since throughout the only real money is bank fees.
The bank then sells the loan as a MBS mortgage backed security. We are told that the investment money for these are generally coming from Asian savers. But guess what this is not true. What everyone is doing is borrowing yen at a very low interest rate from banks ( for a fee ) to buy these bonds. This is the yen carry trade. Basically at the end of the day from a global perspective the banks are allowed to loan infinite amounts of money to buy assets and to buy the loans. This is not stable so to bring at some semblance of stability they sell CDO's collateral's debt obligations.
This supposedly work like insurance and protect the holder against default based on the collateral that underlies the CDO. And guess what they use for collateral ?
Why MBS's of course.

Today it would probably take our world GDP for 200-500 years to pay off all the existing debt which has a maximum generally of 30 years. Basically we need the world economy to grow at between 5-15% to make it. The idea is you simply take all the debt and then take the worlds gdp
and divide its not trivial and my best guess is its 10-100 times the world gdp. I don't exactly know how to do this but its pretty obvious we have borrowed more money then we will make in my lifetime and my children's if peak oil happens stopping global economic growth.

The gross world product is about 46 trillion dollars.
http://en.wikipedia.org/wiki/World_economy.

Understand a lot of this is the base economy i.e basics like food clothing and shelter not discretionary spending.

Here is a link to world debt.
http://en.wikipedia.org/wiki/Global_debt

Global debt is estimated at 100trillion but this is debatable and probably low. Its difficult to account.
But lets assume 100 trillion.
And lets assume we can use 5% of our gwp for paying down debt. This gives a 2.3 trillion a year in pay down but this debt carries interest lets assume 5% and you can see we owe a compounded 105 trillion at the end of year one and have only paid 2.3 trillion leaving us about 2.5 trillion in the hole every year. Consider what happens if the GWP slows or goes negative its obvious that this situation will blow up.
Right now its not clear the world can service the interest on its collective debt much less pay it off.

The underlying problem is the central banks simply left interest rates too low for too long and now have lost control of the money supply and worse the ability to raise rates. Given a robust economy we probably could unwind slowly and eventually get the economy back on track. But peak oil is the nasty surprise that will slow then stop economic growth at a point we can least afford it. Not to mention causing asset deflation as assets that are not viable post peak lose all value further undermining any attempt to sell assets to cover debt.

By declaring bankruptcy I simply mean stepping off this runway train and stopping the game.
My suggestion is to stop it on purpose and let all this debt unwind and default in a sense declare bankruptcy. Or you can take the do nothing approach and it will unwind on its own with unpredictable consequences. Chances are that they will do it inadvertently by simply changing one of the parameters in this vast unstable web of debt. I'm advocating recognizing the problem and at least attempting to bring it to a close in a orderly fashion to limit the carnage.

Once you actually know how much real money exists you can do a number of things to make investment in renewable energy desirable. A simple thing is to give a big tax break for homes that have PV panels installed and communities that install windmills. On the global warming side you can use punishing tariffs against countries such as China and the US that refuse to implement a carbon tax. The US can tax china until it at least conforms to the US levels of pollution controls and Europe can tax the US. Simply forcing a level playing field at the pollution level would be enough to balance the world economy. You don't need to do anything specific simply force people to pay the true cost of using fossil fuels. To spur electric railroad development you can simply remove the federal highway subsidy and charge a carbon tax for non electric rail. To get rid of suburbia remove all the tax breaks for single family homes.

The only place your adding money is to support PV/Wind power since these have a high up front costs that can be payed down over many years and favoring electric rail simply because it has lower carbon usage than individual diesel trains. The rest simply consists of removing the artificial props that allow our current oil economy to work and allowing the market to pick the right direction. Their is no reason for the government to try and do a detailed intervention and in fact its counter productive the economy needs to change as naturally as possible. Attempts by governments to meddle will simply distort the situation. The only meddling they need to do is some basic support for covering infrastructure costs so alternative can compete with the entrenched infrastructure and to me this is more a issue of ensuring a level playing field.

I disagree with your categorization of this as a run on the market. It seems like your basic crash to me. However, that is not important.

It does seem likely that interest rates on bonds are reflecting a lower level of risk than they should be. However, these things are very hard to measure and, in fact, can only be right or wrong in hindsight.

You argument seems to be that an economic crash could lead to a credit tightening that could further fuel the crash. I can't dispute that, but don't see why it is probable. Neither do I see why an inability of some marginal borrowers to borrow more would lead them to default in a significant quantity.

Are there really that many cities that are so perilously close to default that debt interest rate increases would entirely shut down borrowing? And do these cities need new borrowing to pay back existing debt? If so, what percentage of the bond market does this represent?

I think the case is even weaker for corporate bonds. I agreed above that the credit spread for risky instruments seems lower than it should be. That means that investors are accepting a lower level of compensation for taking on the risk beyond what is in a "risk free" bond (treasury). But this doesn't mean that there is huge default risk.

I expect that the vast majority of debt is to companies with pretty good credit ratings and significant equity. In most cases all of this equity would have to be wiped out before the debt is even touched. Even when this happens, in the vast majority of cases, the bond holder does receive a portion of their investment back. I haven't seen any evidence that US (or global) corporate debt is at anything but an acceptable level.

So, if there is an economic downturn, investors who consciously took on risky investments (presumably as a small part of portfolios that are fairly diversified) lose some money on the debt portion of their investments.

But that's the way it works. Equity holders take on a lot of risk in hopes of a big payoff. Bondholder often take on smaller amounts of risk in hope of a more predictable, but still risky payout.

If those investors that decided to make wagers on risky debt lose some, or all, of their substantial gains from th last decade, so be it. Again, for the most part these are sophisticated, diversified investors.

Would this mean that no one will ever invest in bonds again? No, credit spreads would go up a bit until complacency sets in again.

If your argument is that peak oil is going to create a short-term crash and that many, many things including the bond market will be destroyed along the way, OK. But you could apply this same argument to sidewalks, schools, libraries, and probably even blogs. I don’t see that bonds have a unique exposure to an economic downturn that should make it a special focus of our already abundant fears.