Let's play a thought experiment. I'll leave the forex out because it's actually kinda irrelevant in this case due to the pegs.  This is a little complex, so bear with me.

1.  U.S. Consumer desperately wants gas.  He's already pawned all the watches he owns, so he resorts to puttin' the gas on the credit card.  Plenty of anecdotes about this so far.  Some bank somewhere finances the purchase, and he's in debt, but now he can go fast.

2.  Purchase made, the money flows to somewhere in the oil producing country's coffers.  These countries almost all peg their currencies to the dollar, so there's no counterbalance here.

3.  They gotta do something with the dollars.  They can either buy American goods -- and you know how popular Dress Barn is in Saudi Arabia, except we don't even make the stuff in there -- or American securities, mostly stock and bonds.  They can exchange it for another currency, i.e. euros, but then the person who just bought the dollars from them has the same dilemma and solutions.  Someone, and usually the oil producers, choose to buy stock and bonds instead, usually through London custodial accounts because of various geopolitical nonsense.

4.  The purchase of the securities finances the American economy.  When I buy a bond from you, you're given dollars now for a future I.O.U. to deliver dollars.  The Americans are given their dollars back, to buy   Credit card debt actually works this way too, through the miracle called securitization: issuing banks will aggregate the debt of a bunch of consumers and sell it off.  Foreign financers may purchase these securities directly, essentially writing off the credit card debt of consumers in exchange for more I.O.U.'s, or they may buy more conservative things which just frees up other money for credit card debt.

5.  The bank that extended you the credit in whatever form originally now has money and debt on its books.  Because we have a fractional reserve banking system, they can make many loans to consumers against this money.  The amount of money grows.

6.  U.S. Consumer desperately wants gas.  He's already pawned all the watches he owns, so he resorts to puttin' the gas on the credit card.  He can go deeper into debt because the banks are desperate to make more loans due to all the cash on their books, and he can go fast again.

This means that even as things get dramatically worse from a supply/demand standpoint, the normal checks on consumption such as, oh, price, don't exist in America.  America's the consumer for a world that doesn't have any demand of its own, so everyone's happy to see us walk in the door itching for another hit of oil, not just the oil producers.  We use it to buy cheap Chinese goods at Wal-Mart, after all.

If it weren't for this positive feedback, the money drained from the U.S. economy might've been enough to already slow our consumption.  So with these constraints, how do things end?  3 possibilities.

1.  The dollar collapses under all this weight, dramatically increasing the price of gas, killing the owners of the securities and U.S. debt, and putting the U.S. economy on its back;
   
2.  Consumers look at their monthly income, and say, "This is nuts.  I can't keep driving to work to drive because I'm losing money in the process."  They stop going so deep into debt, and they start to gradually pay off their debt.  The U.S. enters a seriously unpleasant recession, as would those who rely on us to consume their oil and baubles, but things start to adjust.  This is the most optimistic scenario.
   
3.  Lenders get kinda nervous when their best customer keeps walking through the door, so they begin to demand more and more collateral and interest for their loans.  There's a great saying:  "If you owe the bank $1,000 and you can't pay, you're in trouble.  If you owe the bank $10,000,000 and you can't pay, the bank's in trouble."  They haven't done this yet, but if they do, interest rates in America would go up, the economy would get worse, and the U.S. dollar would probably come under severe speculative attack if we tried to keep short-term rates low.  See scenario 1.

Simmons could be pointing out that world growth will continue, and rising oil prices won't lead to a world-wide synchronized recession.  I don't know where he was when he said that, but in the context of the discussion it sounds like this was part of his remarks in Ireland.  It's plausible that high oil prices could cause a recession in the US but not in Ireland.

Explanation two could be that instead of recession, the US/developed world will have stagflation.  Sure, plenty of people will experience 'personal' recessions, but the economy as a whole will move along sufficiently to still show growth.  We've seen this happen in the 70's, so it's certainly possible.

Third, we could have outright inflation.  Note that I'm referring to a general increase in prices (Austrian school followers are free to cringe now!).  

It seems to me that which route various national economies choose depends on the steering of their central banks.  So, if for example the Fed chooses to stop raising interest rates to slow the collapse of the housing bubble, increasing oil prices may cause inflation/stagflation with no recession.  Since the last battle was a close brush with deflation, Simmons may simply be saying that IHHO the Fed is more likely to direct the USS Titanic toward inflation this time.

With a few exceptions, such as those who post on TOD, lawyers just don't "get it," and neither do people educated in social sciences or [in most cases] the humanities.

People who never took the hard science classes in high school and college rarely can think and understand fundamentals as most scientists can. Psychologists see every thing as problems of individual personalities, political scientists keep blathering about polls and public opinion and so on, the sociologists are all worried about the usual issues and do not perceive the end of the oil era as being especially important compared to their pet peeves, and many journalists are gullible to the point of actually believing the crap in the government handouts.

Also, I wonder if you have noticed what I have: The engineers are gloomier than the physicists, chemists, biologists, etc.

I find it hard to have serious discussions with most economists these days, because in general--despite being very bright people--they simply do not have the education in science that would, for example, reveal the total fallacy of comparing the transition from whale oil to kerosene to the problems we now face.

(The "Ponzi" thing is overworked.  Mr. Ponzi had nothing but promises.  To say that our CAT scanners, internet access, wind turbines, etc. are empty "Ponzi" promises is absurd.)

Stick it to Exxon: conserve fuel.

Might even fit on a bumper sticker.

"Faced with the choice between changing one's mind, and proving that there is no need to do so, almost everybody gets busy on the proof."
John Kenneth Galbraith

Unfortunately, the Democrats seem to be seizing on the resentment of high prices demagogically rather than looking at the unpopular idea of changing our "non-negotiable" lifestyle.

The Democrats are just using it to try to get back in power - gee, let's all act shocked!

We needed those dinosaurs to practice permaculture. Use the Swedish toilets ... fertilize their next crop of weeds with the compost.

And don't get caught downwind when the meteor hits. <G>

You could pick anyone of the first 3 answers and it could mean the same thing.

Would you rather have

A dollar bill?

A clean new crisp dollar bill?

Or 4 quarters?

We know that 90% would say I want a new dollar bill!. But it doesn't mean much.

Peak oil has changed the details of my personal priorities and it is an intresting new issue for me but it has not changed my life or what I hope to accomplish.

The piece of the pussle I miss most right now is good historical data and accounts of personal experiences from the oil chocks in the 70:ties.

Assuming no trader would like to be responsible for supplying or receiving 42,000 gallons of gasoline, the close price of the last day of a contract's trading should approximate what a real seller and real consumer would have made the deal for in a perfect market.  If it doesn't, a trader loses a lot of money.

Seems to me that speculators just take advantage of the market being sticky and imperfect.  Do you have any suggestion for how speculation would increase the price, in this light?

For comparison the russians are building nuclear power stations for well under $1500 per kW! (we are building them for ~2000$) And the nukes do not require natural gas, vast amounts of water or spoiled landscapes to operate... this thing starts looking like a madness or at least pretty close to it.

They are being told that it's not good for us to be dependent on foreign oil, but for geopolitical reasons (still not broaching fundamental supply restrictions).

So, if there's no problem w/ supply, what other explanation do they have besides fear of what may happen w/ ME nations, reports of enormous profits/huge tax breaks/huge CEO packages?

As others have discussed, I'm curious about how oil companies will respond to this directed hostility over this next while, when they have put aside all explanations of supply...

Hey, we have not yet even stormed the Bastille, much less set up public executions for cable TV.

Notice that lawyers and law students tend to think exactly like the one you quoted. "I have a problem. Therefore, I will sue somebody with deep pockets or lobby to change the law to benefit myself. Life is a zero-sum game, and that means that if I'm worse off, the only possible explanation is that somebody is ripping me off."

Alternatively: "Fork their ass; I'll get MY gas!"

In other words, law school is essentially an education for sophistic rather than honest and fair-minded reasoning.