Financial Crash Expert: A Once In a Lifetime Crisis Is Coming

Added: 2026-05-12

[00:00:00]We turn now to the risks [clears throat] of a global food and hunger crisis if the Strait of Hormuz remains closed to shipments of fertilizer, oil, and natural gas. The disruption of the Strait of Hormuz can push 45 million more people into hunger and starvation.

[00:00:16]Meet Steve Keen, the economist who predicted the 2008 financial crash. What happens if the Strait of Hormuz shuts down? Oil stops moving, fertilizer disappears, food production drops, and billions could suffer. We think that things just magically come out of factories. The one thing I can say for Donald Trump doing this ridiculous, stupid, unnecessary, unjustified war is that he's giving us a foretaste of what global warming is going to do when that strikes. The West won't take global warming seriously until lots of white people start to die. We have to change our behavior very, very rapidly. A large part of our problem in understanding what's happening in the Strait of Hormuz comes out of the way that we're being conditioned to think about how production occurs. Even though people are not aware that this is where their mental model comes from, it comes from what economists reason about how goods and services are actually produced. And conventional economic theory talks about combining what they call total factor productivity, which we would translate as technology, the level of technology, multiplied by labor, multiplied by the number of machines. That leaves out any input from the real world. So, it it imagines we can produce goods and services without using any from from the natural environment, including energy.

[00:01:28]Now, when you look at how the real world actually operates, you can make nothing whatsoever unless you have inputs from the natural environment. If you simply have humans and machines and tell, "Please produce output, but don't We're not going to give you any energy, so the humans starve to death and the machines don't get any fuel." Fundamentally, it's the naivety of humans about how goods and services are produced that has led us to walk into this conflict without considering what's the impact of cutting off critical elements of those physical inputs to produce goods and services?

[00:02:01]The most important one being food.

[00:02:03]Without something to boost the productivity of the soil over and above what the soil itself can generate without artificial fertilizer, we can support 8 and 1/2 9 billion people with the artificial fertilizer. If the artificial fertilizer is cut off, we can support 2 billion. So, we're being confronted with the physical reality of this planet. When we've been living in a pre- dictively a a deluded world where we think that things just magically come out of factories. If the shops are filled with goods and goods, we don't actually imagine how those goods are actually produced. This is a wake-up call to humanity to say that humanity depends upon the physical environment and at the same time we're damaging that physical environment on an enormous scale by what we're doing with the exploiting resources, generating waste, dumping that into the environment.

[00:02:52]That's what is causing global warming.

[00:02:54]Now, what Donald Trump has done, unintentionally of course, is give us an experience of what it's going to be like if the flow of those physical resources from the natural world are cut off by global warming. The only thing I can say in favor of Donald Trump is that this is the wake-up call we need to realize just how critically important it is to rely upon the natural environment for the inputs we need to produce the goods and services that maintain an advanced civilization. But, also to realize that if we damage those resources, we cannot have an advanced civilization. So, if I can see any real way in which this conflict is beneficial to humanity, it's teaching us to take the physical world seriously rather than trivializing it as we've been doing for our entire existence as an advanced industrial civilization, but certainly in the last 50 years. Well, that's where the drive is hard to have a realistic approach to economics then join me and learn realistic economics through SteveKaine.com. You can use my Ravel software that you've seen me using in this video. You can talk to me and ask me questions. It's a free book bundle that's available just this week.

[00:03:57]To apply, go to Steve Keen.com or scan the QR code. Because we had the warning from the Limits to Growth study about what happens if you cut off the physical flow of inputs to produce outputs for our economy, but it was all hypothetical. It was mathematical models run on computers showing output on tables or graphs, nothing which actually hits your belly. But this crisis is hitting our belly. If we can't get the fertilizer through the Strait of Hormuz, we can't produce the food, we will then find we can feed not 8.5 billion people, but maybe 6 billion people. So we face the possibility of 2 billion people dying of starvation for a war they're not involved in. And this is the hard way of learning how much we depend upon the physical environment, what the biosphere gave us for free. Humans didn't create the biosphere. Humans didn't create the energy reserves we use to power our industrial machinery. We've taken it for granted. You cannot take this for granted and then cut it off and think nothing is going to happen. We're cutting off the goods and services that we simply think are going to be on the shops, but now we're realizing they're only on the shops if we can get the inputs to produce those outputs. We've now cut off 30% of the inputs of fertilizer. That can mean up to not just 30%, but maybe even more of a reduction in the food supplies of the planet. And now we just realize how fragile our political and physical production systems really are. So it's time that the politicians woke up to just how dependent we are upon the state of the physical environment, which we're damaging by global warming and we're damaging as well by this war. I've been saying for quite some time and it it sounds racist, but it's actually inverse of racism. The West won't take global warming seriously until lots of white people start to die. If there's a famine in the third world, the attitude of the West, the Europeans and the Americans is fundamentally, well, that's what happens to brown people. They don't really take it seriously. Now, this crisis, because it's going to cut food production at the global level by as much as 30% is quite feasible. Then, there'll be less food available for everyone, particularly those countries that don't produce more food than they consume.

[00:06:15]Now, that includes a large number of Western economies. A lot of third world countries do have to import food for their population, but one of the most the classic example of a Western country that has to import food to be able to survive is the UK, United Kingdom. And the UK imports something of the order of 40% of the food that it consumes. We have had a recent crisis where there was a bad harvest in India, India being one of the world's major producers of and exporters of rice. And the decision of the Indian government at that time was to cut off exports of all forms of rice, apart from Basmati rice, which is a rice that's particularly appealing and highly priced and consumed by Western consumers. If that particular crisis passed, and we're now India is exporting both Basmati rice and ordinary forms of rice. But if this crisis strikes again, then a country like India, Pakistan, Bangladesh will decide that they have to keep what they can produce for their own people, and they'll cut off the export flow. Now, that is going to hit countries like the UK, which have relied upon a permanent reliable supply of food from the rest of the world to enable them to continue surviving, though they only produce enough food for say 60% of their population. Now, if there is the UK is suddenly thrown upon its own resources courtesy of this crisis, and also, of course, if it lacks the fertilizer that it needs to produce even the proportion that it does produce, then white people are going to start dying. And I think frankly, the only way the humanity is going to wake up to the seriousness of global warming and the seriousness of the damage that we've done to the biosphere is when lots of white people start to die. And I was expecting that to happen when global warming, for example, might cause a a set of droughts in vital grain-growing regions of the planet or it could have caused floods, something which destroys the flow of of exports, then that would have been when people woke up. The one thing I can say for Donald Trump doing this ridiculous, stupid, unnecessary, unjustified war is that he's giving us fair taste of what global warming is going to do when that strikes. We should learn from this experience, realize just how fragile our production systems are, realize how reliant we are upon a sustainable natural environment, and we have to now work to enable that natural environment to recover from the damage we've done to it already. So, Donald Trump, he's a bit like It's actually appropriate to say this because we all talk about Donald Trump as the orange man or the, you know, he he sprays himself with the yellow spray to make him look okay. It's a bit like a canary, okay? A canary is yellow. A canary used to be carried down by miners into mines to find when there was a excess of carbon dioxide in the mines because the canary would die before the the levels of carbon dioxide got so large that the humans who were doing the mining would die. So, the canary in the coal mine, that's a classic expression from the past. The canary gives you warning of what's going to happen if you don't make immediate and drastic changes to your current situation. So, in that sense, it's rather appropriate that the canary of Donald Trump has generated this crisis that is making us realize how dangerous the situation we are in now. We have to change our behavior very, very rapidly. Just like miners used to have to evacuate from mine shaft when the canary died, this is the same story. The canary is not dying this time. The canary is killing people by this ridiculous war, but it's not just killing Iranians. It could kill tens, maybe hundreds of millions people around the planet, including people who are white. And I I I come back all the time I think about the fragility of the United Kingdom, uh which has neglected its need to produce food because again the attitude of the West is globalization. UK's not going to be importing food producing food. That's okay. The UK can sell debt. It can arrange insurance. It can make money out of the city of London. And then the funds from the city of London can enable us to buy the food that the rest of world sells to us and the UK comes out ahead. Now, the UK may be the place that finds that oh dear, we can't get the food anymore. It doesn't matter what we can do out of selling uh financial services. We can't get the food for our own people. And that is again the wake-up call. Maybe coming coming out of the canary in the coal mine. The coal mine being the Strait of Hormuz and the canary being Donald Trump.