Mike Adams critiques neoclassical models for underestimating energy's role, arguing a 20% supply drop from Strait of Hormuz disruptions will trigger a 10% global GDP contraction—three times worse than COVID's 3% decline. He predicts this collapse will plunge half a billion into famine and civil war by 2030, potentially driven by deep state sabotage in Australia and New Zealand, while mainstream media ignores these warnings in favor of Keynesian predictions. Ultimately, the episode suggests modern society faces a "Mad Max" scenario rather than a standard depression due to fragile supply chains. [Automatically generated summary]
Transcriber: CohereLabs/cohere-transcribe-03-2026, sat-12l-sm, and large-v3-turbo
|
Time
Text
GDP Impact of Energy Shortages00:14:59
I was listening to an economics lecture earlier today, and I was just shocked to find out how unbelievably retarded neoclassical economics actually is.
When it comes to estimating the GDP impacts of energy shortages, which of course is what we're facing right now on the global stage, and what I learned was again, I can't even believe this.
Oh, and let me just step back and say economics is one of the few areas where you can be called a scientist, and you can even receive a Nobel Prize, and you can publish science papers.
By just making shit up and calling it economics.
Okay, so there's nothing about economics that is real science like physics or chemistry or engineering or whatever, or, you know, biology for that matter.
It's mostly just people making shit up and calling it science.
Okay, that, I'm not trying to offend any economists out there.
You're already way beyond, you know, neoclassical Keynesian economic theory.
But the reason I mention that, kind of satirically, is because I was shocked to find out how stupid the theories are that are still being used today.
There's one called the Cobb-Douglas production function.
This is part of the typical neoclassical economic growth model that says, essentially, I'm simplifying it, but it says that the inputs into the GDP, which are primarily capital, labor, technology, and then energy, it says that those inputs are completely interchangeable.
Which, of course, makes no sense at all.
Now, in certain limited cases, it could make sense.
For example, if you had fewer people, you can add some technology for automation or AI, etc.
So, sure, to some extent, some tech could replace labor.
That's understandable.
But if you don't have energy because the Strait of Hormuz is closed and you don't have oil and you don't have natural gas, etc., you can't just say, well, we'll replace that with capital.
It's like, let's borrow money and it'll make up for the fact that we have no energy and the power grid doesn't work.
See, that doesn't fly at all.
And so these economic models that claim that all of this is interchangeable, they vastly underestimate the damage to the GDP caused by a lack of energy.
In particular, a lack of energy.
So, for example, if you go to a neoclassical economist and you say, hey, What will be the GDP drop stemming from a 20% reduction in available energy for our world, which is pretty much where we're at right now with the Strait of Hormuz being largely closed?
You know, the energy is not flowing.
So let's just ballpark it at 20% for the purposes of this discussion.
It's close to that.
The typical neoclassical economist using the Cobb-Douglas production function and talking about input and output elasticity and so on would say, well, that's going to be a 1% drop in GDP.
Maybe a little bit more than 1%, but roughly 20% drop in energy.
You can calculate that with about a half a percent influence in the overall formula in the neoclassical economics, and that comes out to then 1% drop in GDP.
But of course, that's absurd because think about it if you had a hundred percent drop in energy, your GDP wouldn't plummet just you know five percent.
Your GDP would plummet more like maybe 95 percent or something closer to a hundred percent.
And if you had a 50% drop in energy, I mean, think about it.
If you had only half the amount of gas and diesel and natural gas powering your economy, would your GDP only be reduced by like 2.5%?
No.
It would probably be reduced by something closer to 25%, 30, 40%, something in that range.
Now, again, these are just my estimates, by the way, but I'm trying to appeal to your common sense to say, hey, doesn't it make sense that if you lack a lot of energy, the GDP impact is going to be much more than just a subtle 0.5% overall impact or 1% impact or what have you.
So what you have to understand and what more modern economists have actually been promoting for many years or what they're called ecological economists like Robert Ayres, Benjamin Waugh.
I did some research.
I found their names.
I'm not actually familiar with their work, but They're called ecological economists.
And they argue that energy does physical work, much more physical work than the typical market price implies.
And in addition, that energy is a direct factor of production that's calibrated to physical work done rather than just a cost share.
In other words, the physical work achieved by energy is worth far more than the cost of energy compared to the cost of other inputs.
Or I would add just another personal note here that I would say that energy is a prerequisite that allows capital to work, or that allows labor to function, or that allows technology to function.
So, for example, Technology is great, but if the lights are out and there's no power on the power grid, then your tech is useless.
Or, for example, capital.
You can't really use capital for anything useful if you have no power.
You can have all the loans and all the cash in the world to build a warehouse, but if you don't have electricity for that warehouse or that data center, then it's useless.
It's worthless at that point.
And then the GDP of the data center goes to zero if you have zero energy.
The more modern economists, these so-called ecological economists, argue that a 20% reduction in energy will actually cause, and I'm going to ballpark it at about 10 to 12% drop in GDP.
Something in that range.
But we could simplify it and say half of the 20% will ballpark the GDP drop at then 10%.
Okay?
Fair enough.
So if the energy supply plummets by 40%, then we would maybe expect a 20% drop in GDP, not just a couple of points like the neoclassical economists would claim.
But again, they're wrong.
They're crazy.
I don't know.
They're stuck in the 19th century or something.
But if we suffer, now think about it.
Right now, there is a 20% roughly reduction in the flow of energy out of the Persian Gulf.
And we don't know how long this is going to last.
It could last the rest of the year.
You know, it could be months.
It could be longer than months.
Actually, it could be years, depending on how much infrastructure gets destroyed, because it looks like Trump is going to order another bombing wave and maybe a land invasion still, you know, in the days ahead.
They're building up all the military resources for that.
That's clear at this point.
So we could see long-term damage there that would take years to repair.
The world could suffer a 20% loss of energy for five years, let's say, or 10 years.
I mean, imagine that.
That's a horrible scenario.
So.
What would you call that?
Would you call that a recession?
No.
No.
Would you call that a depression?
Well, some economists might call it a global depression.
I call it Mad Max because that's really where this is going.
You know, there's different definitions of what's a recession and a depression, but it's just labels.
The point is a very significant portion of the world will not have energy, will not have fertilizer, will not have industry functioning, will not have a power grid functioning.
Won't be able to grow food.
They'll be facing famine.
They'll be facing civil revolts and social uprisings and political coups and whatever.
Violent civil war and mass famine, starving people everywhere, mass migration of humans, fleeing, collapsing nations.
That's what we're talking about if we have a 20% reduction of energy for an extended period of time.
And we are currently on that track.
I'm not saying it's going to go full Mad Max.
It would take, you know, maybe the rest of the year of the straight being blocked, or maybe not even that long, maybe a few more months.
But we're not at Mad Max yet.
That's the good news.
But that's where this is going.
And imagine a global GDP plunging by just 10%.
So I think it's helpful here to compare what we might be facing to historical events that we have all lived through.
Or most of us have.
So, for example, remember 2008, the global financial crisis caused by the subprime mortgage collapse, which was caused by lending money to people who weren't qualified, so called ninja loans and all that.
Remember the movie, The Big Short, right?
One of my favorite films.
Did you know that the global financial crisis caused about a 2% contraction in world GDP?
Did you know that?
So, that's a 2% contraction.
You may not have felt that, or you may have lost all your money, as a lot of people did if they were in real estate or real estate trusts or mutual funds that were heavy into real estate, et cetera, or even bonds and some of the organizations that were invested in that, or some of the banks that were tied to whatever.
A lot of people lost a lot of money, but it didn't bring the world down and it didn't cause a Mad Max scenario.
So that was a 2% contraction.
Then if we fast forward to the COVID years, let's talk about 2020 with the lockdowns, the shutdowns, the ordering of the closing of everything and supply chains cratered all over the world and oil went to negative numbers.
They were giving away oil.
If you could just take it, they would pay you to take the oil.
There was so much oil.
There's an oil glut in the system.
I mean, it went to like minus $45 a barrel or something like that.
I was actually watching it that.
Evening and I was my mind was blown.
I'm like they're giving away oil.
They were.
It went negative.
Well, that whole thing that we lived through and that was pretty bad, you may recall.
You know, supply chains were shattered, it was hard to get anything, everything was shut down, there were shortages everywhere, right there, cost increases.
That was about a 3% global contraction, according to economists.
Okay, so roughly 3, maybe a little bit more.
All right, so what we're looking at right now is a 10% global contraction of economic activity because of the 20% loss in energy supplies.
You know, once the extra buffer works its way through the system, which is happening right now, you know, ships, tankers still on the seas that are unloading right now, let's say.
That's not going to last forever.
So now we're talking about a contraction of GDP that is three times worse than COVID.
Three times worse than COVID, actually a little bit more than three times worse.
But whatever you experienced during COVID, the supply chains, the shutdowns, the difficulty, the price increases, the shortages, whatever, multiply that by three, a little more than three.
Okay?
None of us have ever lived through an economic event like that.
In fact, you'd have to go back to the Great Depression in the United States in order to see any kind of a GDP collapse on this scale.
At least that.
That's my understanding.
That collapse back then, the GDP fell, I think, right around 30%.
So that was a huge deal.
That was a very difficult time to live through.
So, this won't be as bad as the Great Depression, let's say.
But our society today is more dependent on just in time deliveries.
Our society today has a lot more people more densely packed into cities, people who, unlike Americans during the Great Depression, modern day people don't know how to grow their own food.
They don't know how to repair their own shoes.
They don't know how to sew their own clothes.
And I've told these stories before, they're all true about my grandparents living through the Great Depression.
And also the years after, and how one set of my grandparents lived in a tent.
And I remember my grandpa telling me stories about how they would take a bicycle tire, if a bicycle tire went bad, they would cut up the bicycle tire and they would use it to put a new layer of rubber on their shoes or sandals.
So you didn't throw anything away, you learned how to fix things.
And that's when usually it was the housewives back.
Then, who had a sewing machine, a little treadle, like a little foot powered sewing machine, didn't even need electricity.
I've actually got one of those because you know I collect old, like off grid stuff because I'm fascinated by it.
But they would, you know, you wouldn't throw away a pair of jeans, you wouldn't throw away a pair of shoes with holes in them.
You would mend and you would buy patches or you would cut up other old clothes into patches and then you would sew the patches back on onto the knees, onto the elbows, whatever.
I mean, today people walk around as a fashion statement, like, look, I have holes in my jeans.
I'm so cool.
No, you're a total poser and a faker.
I mean, people who have real holes in their pants are people who work on the ranch, who work for a living.
And, gosh, I've ripped a few holes in my pants over the years, but I never bragged about it.
It's like, dang it, I'm going to have to throw away that pair of jeans.
But back then, you didn't throw them away.
You kept them and you fixed them.
Modern Society Loses Basic Skills00:06:06
Today, our population doesn't know how to do that.
They don't know how to grow food.
They don't know how to can food for the most part.
They don't know how to dehydrate food.
They don't know how to do much of anything.
They're entirely dependent on the system.
So I say that a 10% contraction today will actually be psychologically and culturally more severe than the 30% contraction during the Great Depression.
Because during the Great Depression, people could get by.
They knew how to do things.
Today, they don't.
I mean, maybe a few exceptions do.
Maybe you do.
Probably.
I do.
I can get by.
We know how to do stuff.
That's not the majority, man.
That's not most people.
People don't know how to do stuff, and so it's going to hit them hard.
And remember, 60% of American households, they can't get by just missing one paycheck.
But there's more.
There's more.
And there was actually a line mentioned in the movie, The Big Short.
It was mentioned by the Brad Pitt character.
What was his name?
Ben Rickards, I think, was the character's name.
And I don't recall if this is the correct number, but at one point in the movie, when the other guys were celebrating at the trade show, like, yeah, we just sold, you know, or no, I'm sorry, we just bought all these options for pennies on the dollar.
And the Ben Rickards character said, stop dancing, stop celebrating.
Don't you know that every 1% contraction in global GDP thrusts about 40 million people into extreme poverty?
And the guys were humbled, like, oh man, we didn't know that.
We're just trying to make some money.
And then the Ben Rickards character says, just don't dance.
Just stop dancing.
Anyway, it's a profound scene from that film, which again is one of my favorite films.
But it's true.
It's true that about every 1% contraction in global GDP causes about 40 million people in the world to suffer through extreme poverty.
So, of course, if we're looking at a 10% reduction in global GDP, stemming from the 20% reduction of energy being offline, then we're talking about 400 million people thrust into extreme poverty.
We're talking about the level of poverty where you can't buy food.
You can't buy clothing.
You don't have shoes on your feet.
You don't have a home.
You are homeless and you're scraping out of dumpsters to have something to eat.
That's going to happen to, I mean, let's call it 500 million people just to round it up to half a billion people.
And that's within a reasonable range.
So, you know, a 10% reduction in GDP could thrust half a billion people into extreme poverty and famine.
And I actually think that's part of the plan.
I think that's part of the plan.
And I also think that there are plans underway to make this far worse than just the energy reduction in the Persian Gulf.
For example, in Australia right now, there's a large refinery in Australia called Geelong.
I think I'm, I hope I'm pronouncing that correctly.
The Geelong Victoria, that's where it is.
It's an oil refinery, which is one of the two remaining refineries in Australia, as I'm told.
It just blew up today.
It's burning down, totally engulfed in flames.
Now, remember that this is exactly what happened to a major oil refinery in Texas a few years ago.
Somebody's running around sabotaging and burning down these refineries.
So in Australia, not only are they suffering under shortages of diesel and other refined fuels right now, as China has halted the exporting of refined fuels, and also I think Russia has too, or at least to some countries.
But Australia now, its refinery, it's one of its largest refineries, is all burned down now, apparently.
At the same time, they have a large fertilizer plant that also went offline, I think it was.
Last week, or maybe it was a couple of weeks ago.
I remember seeing that.
And that's going to take probably months to get back online.
And so somebody in Australia, you know, probably the Australian deep state, is taking out the refineries and taking out the fertilizer, the, you know, the industrial processing facilities at a time when a global energy supply chain collapse is on the way in order to thrust more Australians into extreme poverty and famine.
And obviously, Desperation and death.
And this is all part of what I have called a global depopulation agenda.
And Australia and New Zealand, as you know, are two of the countries in the world that are the most happy, at least the leadership, the most obedient going along with globalist agendas for mass human extermination.
Now, then Canada is also very obedient because of its current leadership, but also under Justin Trudeau.
And then the UK is also very obedient.
The US, not so much, but.
I noticed that Australia and New Zealand, especially during COVID, you saw they were leading the way in human extermination and rounding people up and throwing them into concentration camps and requiring that everybody take the depopulation death jabs and so on.
So it's clear what's happening here.
It's very clear to me that this is a deliberate, engineered collapse of the energy supply in order to cause mass poverty, famine, and ultimately depopulation.
And the typical person out there, not you listening to this, but the typical uninformed person, has no idea what's coming.
Billionaires Control Media and Politics00:04:02
Because they're not going to hear about this on the news, whether it's NPR, CNN, Fox News, New York Times, whatever.
They're all going to cite the Keynesian neoclassical economists.
Oh, don't worry, it'll only be a 1.5% reduction in global GDP.
Nonsense.
Nonsense.
That's complete bunk.
It's going to be at least 10%.
Maybe more.
A 10% reduction in global GDP.
That is a huge deal.
Again, three times worse than COVID, and nobody is being told that.
Nobody's being warned about what's coming.
Actually, I mean, there are a few people, like Dr. Chris Martinson is out there covering this, and he's telling people the truth, and he sees it.
He and I both see it.
Michael Jahn sees it.
Some people see this.
Catherine Austin Fitz has been warning about these kinds of scenarios for a long time.
But there are, I mean, the most, the majority of people do not see this.
The people who do see this are never invited onto mainstream media shows or interviews.
So you're not going to hear this from people on Fox News.
Not at all.
You're only going to hear this from alternative or independent media, which is what we are here.
Brightvideos.com, naturalnews.com.
That's where you're going to hear this.
So you have the advantage of knowing this in advance of the mainstream people figuring this out.
Someone told me they went to a dollar store just yesterday, I think, and they were looking to buy hairbrushes.
And I couldn't believe that at the dollar store, the hairbrushes were like $5 or $6.
Like, what?
You'd think that they could make a hairbrush for 50 cents and sell it for a dollar or whatever.
Maybe there are cheaper hairbrushes, but this person told me that at the dollar store, and there's a number of different chains and different brands of.
Dollar stores are different franchises, but at a lot of them, I'm told, prices are, like you know, everything's either a dollar fifty and there's a bunch of stuff that's five dollars and six dollars.
Now, the last time I went to a dollar store was a few years ago and I actually did a video about.
I bought a bunch of stuff at the dollar store and I shot a video to show you what you could get at the dollar store and the biggest ripoff was in like ibuprofen and vitamin C and aspirin.
Huge ripoff because they would have a bottle with like five pills in it and you were actually paying 500% higher than you should per pill if you buy those things at the dollar store.
It was wild.
It's like the people who can least afford to overpay for painkillers and vitamin c.
They're overpaying by 500 by shopping at the dollar store, because they're not very bright if they think that just because the bottle is the same size, that it has the same number of capsules, it doesn't.
Like I said, it's a bottle with like five capsules in it where you can go buy the same bottle.
You know, like ibuprofen, you can buy it on Amazon and get 200 Ibuprofen's in there, you know, for a few bucks, and the cost per pill drops to like under a dime or something.
So, anyway, but a lot of people don't know how to do basic math, and that's why they end up in so much poverty typically, or they're just buying too many lotto tickets.
I don't know.
Now, there's something else you need to think about in all of this, and I hate the term inequality, by the way, because I think it's been abused by a lot of leftists and liberals to claim that everybody should have more welfare.
So I don't like the term inequality, but in this context, in economics, it actually does describe something important, which is that when there's a very large gap between the rich and the poor, historically, this is when things go.
Rising Costs and Long Recovery00:05:26
Awry for a country.
This is when there are uprisings and protests, when you have just a few ultra wealthy people where less than 1% of the people control like 99% of the wealth.
And we are there now in America.
We are there.
Just a few billionaires control everything, including all the politics and all the media.
It's just a few billionaires, like Larry Ellison owns half of all the media.
Just a few corporations own all the food brands, et cetera.
While the people are impoverished, It's that disparity, it's that inequality perception.
Well, it's not just a perception, it's a reality that leads to revolutions.
And I think you're starting to see the early phases of that with these disgruntled workers setting fire to the warehouses where they work.
Clearly, that's the opening salvo of this kind of uprising.
And you've seen perhaps some of these videos of warehouses going up in flames, and in one of them, You know, the worker there filmed himself setting it on fire and saying all they had to do was pay us a working wage.
And he sets it on fire and poof, you know, up in flames a million square feet of paper goods and toilet paper and, you know, felony arson charges, etc.
But he didn't care.
He's like, I'm done.
I can't, like, my life, he seemed to be saying that his life wasn't worth living and he might as well just go to prison and burn up this whole warehouse.
A lot of people feel that way.
Imagine how it's going to be when there's a 10% contraction in the economy and you have more jobs being lost and you have wages being suppressed or frozen.
I mean, I've seen surveys where people who are finding new jobs now are taking on average about 20% pay cuts, even as inflation is getting worse.
So even people who are employed are finding that their dollars don't stretch as far as they used to.
And of course, because of all the currency printing, food is getting more expensive, energy costs are going up because of this war on Iran.
Obviously, diesel prices are higher.
Transportation prices are higher.
Everything's becoming more expensive.
Everything.
Or almost everything.
Although the White House says that for the last year, all of our gas prices have gone down.
Like literally Karen Levitt said that today.
It's like, what are you smoking, girl?
Get off the crack pipe and like read them.
Go fill up with some gas and tell me what you see.
How much does it take to fill your tank?
You know?
Smoke a crack.
Don't smoke crack at the gas station.
Go back to the White House and smoke it there because all y'all are smoking crack at the White House.
So, you and I know that the White House is full of bunk.
You and I know things are getting more expensive.
This is going to have a social impact and a psychological impact that will be very destabilizing to many nations, many cities, and the world as a whole.
So, bottom line at least three times worse than COVID is what's coming.
It's already in the pipeline.
It can't be stopped.
Even if there's Peace tomorrow.
It won't matter.
And the most important way to get back on top of this is to have a fast recovery, which means to get the energy flowing again through the Strait of Hormuz, which is not happening because of Trump.
It was open before Trump attacked Iran in late February.
It was open.
So this problem is caused by Trump doing the bidding of Netanyahu.
And now the world is on a path that will lead to contraction, maybe half a billion people thrust into extreme poverty, social uprisings, famine, violence, revolution in some places, Mad Max in certain areas.
Not everywhere, but in certain areas.
That's where this is headed, okay?
So don't listen to the old school economists, the Keynesians, who don't, they never know what they're talking about anyway.
I mean, they're Keynesians, for God's sake.
So in the real world, when you have no energy, your economy shrinks rapidly.
It contracts rapidly.
So the recovery timeline from this, by the way, let me, final note here.
The recovery timeline is going to be years.
It's going to be years, even if this is solved tomorrow.
So it's possible that by the year 2030, we could get back to where we were before Trump launched this war.
But it's highly unlikely that we're going to get there before the year 2030 based on the current projection of events as this is clearly escalating.
So plan for some very difficult years ahead.
Okay.
Stay prepared.
Stay informed.
You can hear all of my analysis videos at brightvideos.com.
You can read my articles and see my infographics at naturalnews.com.
And of course, you can use my AI research engine for free at brightanswers.com.
Plan for Difficult Years Ahead00:00:53
And then also, you can check out our supporting sponsor, the satellite phone store that has backup supplies and solar generators and, of course, satellite phones at sat123.com.
And then finally, if you need backup food supplies and iodine and other personal survival and high-density nutrition that's lab-tested, et cetera, shop with us at healthrangerstore.com.
And thank you for your support.
Get ready.
Triple, triple COVID.
That's the takeaway.
Just the two word takeaway from this whole podcast is triple COVID.
So get ready for triple COVID.
All right, take care.
Start your day right with our organic, hand roasted whole bean coffee.
Low acid, smooth and bold.
Lab tested and ethically sourced.
Taste the difference only at healthrangerstore.com.