We think that in developed oil importing nations that import  large amounts of oil proportional to their GDP (e.g. USA, Italy, Spain, Greece and Portugal) - that any oil price higher than $95 per barrel will lead to economic stagnation and negatively impact property prices in these countries. As inflation takes off, interest rates rise, their currencies drop and oil import bills sky-rocket - their public budget deficits will increase, taxes will rise, then unemployment will rise and property prices will drop. A simple model, but realistic. Now that oil prices are $85 per barrel, these economies will start to grind to a halt again - and anything over $100 per barrel equals a double dip recession. And potential debit default for the weakest economies in this bunch.

What do you think?  Do you agree with this synopsis?