Low consumer demand will as Dan suggests be a moderating factor. Another moderating factor is the measurable decline in both the mass and velocity of corporate money circulating the globe. Which force will be the greater? My guess is that overall consumption will not fall by a margin (or in a timeframe) necessary to significantly offset the current money printing exercise. As stated before, inflation is the friend of the debtor.

I agree with Dan that the next phase of the credit crunch will emerge shortly. The biggest casualty will the big banks becasue they covered many of their CDO, CDS and share lending clients with capital protection guarantees and while still managing to keep it all off the balance sheet. The mergers and consolidations (we see at the moment) will not make these contingent liabilities go away. They will ,however, increase the pressure on Government's to bail the fools out.

On the local front its clear that neither Kevin Rudd nor Peter Garrett know anything about what kind of cars and fuels are friendly to the environment, the hip pocket and the national interest. The Government also fails to appreciate the magnitude of market forces at work here or the manner in which the local industry should position itself (as a very very small player) to make the best of the wild ride ahead.