"..further measures", Nate? Like civil disorder and revolution, maybe......?

The difference between $60 oil and $120 oil is that forced energy conservation is simply moving up the food chain--from a poor third world consumer to lower income and middle income Americans.

Let's assume, for the sake of argument, an annual net export decline rate that looks this: -2%, -4%, -6%, -8%, -10%. . .

We get a price response, followed by a demand response, and then we get a sharper decline rate, requiring an additional price/demand response--aggravated by the fact that forced energy conservation is moving up the food chain. Wherever we are headed and whatever the consequences, IMO, this is what is driving the price. A steady exponential decline rate would show up on the following chart as a flat line. What we see is an accelerating net export decline rate:

Increased oil prices reduce almost everyone’s disposal income (it acts as a tax).

For the US a doubling in the oil price will heavily impact their already high trade deficit? How long will other nations be able or willing to finance an accelerating American trade deficit?

Some of this lenders like China will also be impacted by the increase in oil prices, and should thus (under equal circumstances) be left with less US dollars to finance an accelerating US trade deficit.

Obviously something will have to give when the oil price reach critical levels (I don’t know what that price is as of now and when in time this will happen) even adjusted for a US dollar in almost free fall.

The increase in oil prices will affect food prices, interest rates, travelling etc. thus forcing the average household to increasingly prioritize their available means.

NGM2