The problem for the world is that there are NO inventories of everything essential out there - food, energy, essential metals like alumina (energy efficiencies in the world of transport), fertilizer, water you name it. Will demand be rationed in time? Of course, but at what price does this happen. You may need to see a doubling or tripling from here. Or maybe rationing comes first from shortages as has been the case with fertilizers in the farming sector. I haven't got a problem paying for urea at $1000/t but I can't buy any at the moment. Australia is out of urea ... You learn from a shortage very quickly the need and importance of having stock on hand, surplus to need, some call it hoarding ...
I would argue as this story is unfolding you are actually increasing consumption because in the developed world you get inventory building (hoarding). We are a long way off destroying demand and of course if that is occuring with some commodities then we are likely losing lives in the developing world (unfortunately). There may be a liquidity crisis in some parts of the world (read resource poor countries like the US, Europe, Japan) but there are many parts of the world where there is still a sea of liquidity.
I susbcribe to hyperinflation definately lieing ahead on the case of declining oil output capacity alone.
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