Well, the discussion on the potential for inflation in response to Peak Oil over at The Oil Drum went pretty well. I'd say there is a general consensus that inflation is the most likely policy response to impending economic troubles, as well as general economic result, of Peak Oil.
Today--of course as a direct result of the TOD discussion--treasury rates hit various periodic records and the Euro now costs more than $1.35. And, following up on a recent post, Sen. Schumer is demonstrating his unusual brilliance by proposing a $120 Billion bail out of sub-prime borrowers (OK, he didn't quantify that dollar figure, but only the nature of the government assistance--$120 Billion is an industry estimate). Now that's how you inflate the currency, Chuck! Silly me, thinking that the Fed would have to engage in open-market operations. This kind of idea will have two effects: it will inflate the currency as we'll probably engage in some form of printing money to foot the bill, and it will prevent the very structural reform in the credit markets that is the only potential silver lining in the mortgage default cloud.