Its going to be interesting to watch what happens in China in the near term. If the current peak in oil prices remain for some time, its sure going to have an impact, but maybe this will be a good thing. China's rate of fuel consumption and generation of greenhouse gasses is simply devistating for our future - anything that slows it down is a good thing. But at some point China has to crash, and thats going to be ugly too. With China and the US correcting at the same time, the world economy is going to head south very quickly. The reduction of demand will be a good thing, but the social impact may be another issue.
"With crude oil closing in on $100 a barrel, the pinch of higher prices is being felt worldwide. In China, however, the impact of the hikes has been shortages at the pump, and tempers are running hot. ...
The crisis is largely one of China's own making. To reduce inflationary pressures on its red-hot economy, Beijing has not raised prices at the pump, which are set by the government, since May 2006. In that same period of time, international oil prices have risen about 30%, sticking refineries with spiraling costs for the crude they buy and shrinking profits for the gasoline they sell. Some smaller refineries stopped production altogether to avoid losses, while others begun hoarding their crude supplies, leading to gas shortages around the country. "
http://www.time.com/time/business/article/0,8599,1678731,00.html?xid=rss-business
scott-hamilton.com
http://scott-hamilton.com/blog/article.php?story=20071105135309237