Financial Crash Expert A Once In a Lifetime Crisis Is Coming

The war in Iran disrupts the flow of fertilizer through the Strait of Hormuz. It's not just energy we're losing coming out of the Strait of Hormuz, probably the most worrying one we're losing is fertilizer supply, and something of the order of 20% of the world's fertilizer passes through that Strait. Meet Steve Keen, world's leading economist who predicted the financial crisis. As war tears through the Middle East, a bigger catastrophe is unfolding. A third of the world's fertilizer is trapped in the Persian Gulf, and it won't reach farmers before the spring planting season. Food production on the planet could fall 10-25% and therefore there simply won't be enough food for everyone on the planet, and then it's a question of who's going to starve. I think we are definitely going to see famines all over the planet. They don't understand how critical and how fragile our production systems are. So people can talk about a war in Iraq and think, oh that's a war in Iran and that's going to cut off our oil supply. No, it's going to cut off your food supply. And for the average person listening now, what will they start to experience if this war doesn't immediately end? Two or three months, India's going to run out of fertilizer, and so there'll be a famine in India. Now, you'd think the wealthy countries are going to be safe. They'd be like Australia, my old home country, has about 30 days oil supply. When it runs out, it can't get food from the farm to the city anymore. So Australia is incredibly vulnerable. We're all far more vulnerable than we realize, and this war is threatening everybody on the planet. It's not just energy we're losing coming out of the Strait of Hormuz. Probably the most worrying one we're losing is fertilizer supply, and something of the order of 20% of the world's fertilizer passes through that Strait. Now, for the whole of the month of March, nothing passed through that Strait. So I've got a hole in the usual chain of ships coming through the Persian Gulf, heading off to other countries with supplies of fertilizer that farmers then have to receive before the growing period so they can put the fertilizer with the seeds and then get that high level of growth. And it's absolutely critical in terms of time because the fertilizer arrives one or two weeks late after the ideal point in time for planting those crops, then it doesn't matter. You've missed the growing period for the plants. So there's really a race in time now between the seasons of the planet when planting occurs for various crops all around the planet and when the fertilizer arrives because normally we've had sufficient supplies of fertilizer. Now we're going to be down something of the order of 20% fall in total availability of fertilizer. There are other parts of the world that produce fertilizer. So America is fairly fertilizer self-sufficient, which means that they won't necessarily feel this effect themselves. But countries like the UK and Australia do not produce anything like enough fertilizer for themselves. So they're dependent upon that supply from the Middle East. If that supply gets cut off and it's not replenished before the growing seasons, if there aren't stocks available that can be used to fill in the gap, then food production is going to plunge in a whole range of countries around the world. And that's the thing I think is most scary about this situation. It's not a question of if. I think we are definitely going to see famines all over the planet varying in terms of how much a particular country has stocks of fertilizers on that front. America has enough stocks and produces its own fertilizer anyway. China is quite safe because it also produces its own fertilizer. But equally, it has stocks apparently of the order of over a year's worth of supply of fertilizer. So one thing that China's Communist Party has done because of their attitudes towards how production occurs, they're aware that the system can be disturbed and they've got huge stocks of virtually everything. So China apparently has something like one and a half years' supply of fertilizer, similar sort of length of time of grain, similar length of time for petrol. Australia has virtually no supply. It's got 30 days' worth of oil. So China's got 450. Australia's got 30 days. England is even worse. England apparently has less than a month's worth of supply of oil stored, no capacity to produce fertilizer. So all the production processes which are critical for our survival as humans on this planet are really thrown into jeopardy by this crisis. And it shows that if we had people who actually understood the physical nature of production, there is no way they would have allowed this war to occur. Because you'd know that if you cut off 20% of the world's fertilizer, you cause potentially starvation for 20% of the world's population. It's incredibly important not to have this sort of war happen in that region of the planet. Because we have megalomaniacs making those decisions and because they're advised by people who don't include energy as part of the model they have of production, we've gone in there and smashed the whole thing like a bull in a China shop. We've smashed up all the China and then we want to have a meal. You haven't got any cups anymore to pour your drinks into and it's going to take you time to replace them. So all these issues of reliance upon production upon absolutely critical inputs which can't be replaced from anywhere else on the world and the damage and the time it takes to repair it, we're in really, really dangerous waters. And what scares me the most is we'll see global famines occurring and where famine occurs, if it's widespread enough, you also get social breakdown. So we're in a very, very dangerous point. If that's whetted your appetite to have a realistic approach to economics, then join me and learn realistic economics through stevekane.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. To apply, go to stevekane.com or scan the QR code. Now, with the obsession that conventional economists and politicians have with efficiency means we've gone across to a production system in the West which relies upon supplies arriving just in time for the manufacturing process that they're part of. The same with fertilizer. Fertilizer arrives just in time when it needs to be used to enhance the growing season. But just in time has been smashed by a month. There's a month missing in the flow of goods and services. We've also got a decline in productivity as well from the collateral damage to production facilities as a consequence of the war. We don't have time and we don't have resources and that's going to really hit us very badly this year. The total supply of fertilizer for the world is going to drop by about 20% courtesy of this crisis. Now, whether that affects countries depends upon their own stocks of fertilizer. So obviously, China is quite safe. So if we then had people saying, well, China is going to send fertilizer to India to give India the capacity to produce food and to Australia and to Britain and so on, then we could sail through the crisis. But that means we're going to rely upon cooperation from politicians. And of course, what we've seen is anything but cooperation being the rule. People hang onto things for themselves. So this is probably going to lead into increasing the breakdown we're seeing in global trade coming out of this because people don't trust each other. Countries aren't willing to sacrifice their potential survival for the survival of another country. So we're going to see serious deaths coming out of this absence of fertilizer in particular. And it's going to happen this year. And it's going to be a patchwork of where it happens all over the world. But countries with low existing stocks of fertilizer and countries which don't produce their own fertilizer, they're the ones who are going to be most vulnerable. And that includes some of the wealthiest countries on the planet. It's the UK and Australia that I think are going to have the hardest time out of that. And you'd never even imagine the thought of a famine in the UK. But given this disruption to production and the fact that Britain relies upon imports for more than 40% of its food, it's extremely vulnerable and it could be even a famine in Britain.