Without a shadow of a doubt the economy is in a fine mess. The cost of oil, food and borrowing have all increased substantially. It’s taken many people to the brink, but matters will not get worse.

There have been many encouraging signs in recent weeks on the front against this wide spread economic depression. Firstly, the head of OPEC reiterated his belief that the optimum price for a barrel of oil should be $100. If the price rises much beyond this then oil becomes less competitive in relation to other sources of energy, and people will start to look elsewhere. The renewed impetus for nuclear power development is a direct consequence of the inflated price of oil. Some pundits have predicted oil prices of $250 a barrel, but these people are headline grabbing fools. The US currently spends $2-3 trillion on oil imports each year. If oil was to reach $250 a barrel, then the US could make the decision to invest much of the $6 trillion on alternative energy sources, which would mean hundreds of nuclear reactors which would leave foreign oil economies bereft of any chance of economic survival, seeming as their economies are so drastically skewed to exploit oil; their only valuable resource.

Secondly, the increasing price of food has led most countries with a strong agricultural base to increase food production for the coming year. The result of this will be lower prices for consumers. It might also deter the ludicrous notion of using biofuels, which have undoubtedly contributed to high food prices.

And while credit will be difficult to obtain for some time, the huge deflationary pressures on house prices will mean that there won’t be such a voracious appetite for credit to afford overly expensive houses. This will help to loosen credit markets, and we will likely see a return to responsible lending, after the excesses of recent years.

A lot of western economies, most notably Spain and the UK, have been overly reliant on increasing house prices, and a booming construction sector, to fuel economic growth. The result of this is the rather ridiculous situation that the UK has found itself in, whereby 40% of national wealth is tied up in property. Not in ideas, or companies, but in bricks and mortar. And on the international stage, having your value base largely derived from property does nothing to improve a nation’s competitive edge. Furthermore, expensive commercial property deters direct foreign investment. It won’t be comfortable for those who rely on property for their income, but for the country as a whole, it would be much more progressive and ultimately beneficial, if people could no longer while away the hours milking out every penny from their property, but they relied on new ideas instead. Because the creation of ideas is self-fulfilling: they lead to new ideas. And in an information age, ideas are the source of wealth.

The credit crunch has undoubtedly caused a lot of distress for a lot of people, but it could be over much earlier than you anticipated, and it certainly isn’t likely to get worse. But things will never return to how they were before. The world is a changed place, whether we like it or not.