The US economy will not function on $10/gal gasoline (at least not today -- at some point in the future -- sure, but not this Christmas). If the US economy wont function, neither will the rest of the world's for all the same reasons. People who can't drive to Walmart, can't buy Chinese products. A back log of goods in containers, drives the Chinese economy down. World automakers can't sell current technology, but wont be able to afford theR&D to offer otherwise (it ain't like somebody has a fission vehicle waiting in the wings to introduce on a whim). Since this is a nice public record of my musings, I will go out on a limb and say that US gas wont average more than $4.00 gal. anytime in '08. This forum is a bunch of car guys worried about how this impacts our driving habbits. The real issues would arise from the costs of foodstuffs that have to be transported. If the associated freight charge for a can of Spam increases 100%, a lot of people will starve. It sounds like a joke, but my point is that so much of the world imports its' food that the real issue wont be if you can afford to drive to the store and buy flour in the Ukraine, but will there be flour to buy.
In 1990 a gallon of gas was $1.19 in the US. In Dec. '06 gas was $230, Dec. '07 brought $3.02, but today it's $2.95. Over the past 8 years we had 911, the Iraq war, and unlimited saber-rattling, Enron, and oil for food. Short of nuclear holocaust in the middle east, what would drive prices up 350%?
There is plenty of oil and the market will price it fairly. Governments will tax it unfairly.