The Petro Keynesian model cranked up economic growth through high and rising energy and natural resource commodity prices, high liquidity, low real interest rates, increasing worldwide solvency, and record high trade growth. Any faltering in the growth surge, however, triggers fast-mounting inflation worldwide, certainly not sparing the ‘postindustrial’ OECD countries, where falling growth ends with stagflation. Late summer 2008 marks a turning point for growth, but not necessarily for inflation, which can go on to exotic highs when, or if interest rates are raised in an atavistic flirt with textbook ideas on fighting inflation. Textbook theories might promise that after some ‘necessary pain’ when interest rates are hiked, Old Economy OECD countries can have a remake of the 1990s, returning to the imagined security of the previous New Economy model. This ignores the resource garrot.

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