Warnings are mounting that the world is racing toward an unprecedented economic and humanitarian catastrophe, with leading economists cautioning that a perfect storm of war, soaring energy prices, collapsing supply chains, and an AI investment bubble could trigger a global recession and widespread famine.

Professor Steve Keen, the economist who earned a reputation for accurately predicting previous financial crashes, is now warning that as many as two billion people could be placed at risk by a looming global food crisis.

According to Keen, the world is heading toward a fertilizer shock that threatens to slash food production on a massive scale by 2027.

Fertilizer Crisis Threatens Global Food Supply

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Modern agriculture depends heavily on nitrogen fertilizer produced through the Haber-Bosch process, an energy-intensive system that creates ammonia by extracting nitrogen from the atmosphere.

The process is responsible for producing enough fertilizer to feed roughly half of the world’s population.

However, about 10 percent of global fertilizer production depends on the Persian Gulf region, where escalating tensions surrounding the Strait of Hormuz are threatening critical supplies.

As The New American has documented, disruption in the region is already triggering ripple effects throughout global agriculture.

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Nitrogen fertilizer shortages are adding to food inflation already driven by war, drought, and international trade disruptions.

Because fertilizer shortages typically take one to two years to fully impact harvests, Keen warns the worst consequences have yet to arrive.

By 2027, he projects the world could lose the equivalent of approximately 400 million human food rations every day.

For billions of people, the consequences could be devastating.

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While the wealthy may be able to absorb soaring food prices, ordinary families are expected to bear the brunt of shrinking supplies and rapidly rising costs.

Keen argues the warning is not based on speculation but on the mathematics of fertilizer production and food output.

Oil Shock Could Trigger Global Recession

At the same time, renowned Wall Street money manager and Phinance Technologies founder Ed Dowd is warning that renewed conflict involving Iran could unleash another inflationary shock that pushes the global economy into recession.

Dowd warned earlier this year that oil prices could reach $250 per barrel in a worst-case scenario.

Although that prediction has not yet materialized, he says recent developments have placed that outcome back on the table.

“We had two scenarios when we talked last,” Dowd explained this week.

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“One was the conflict would get resolved in the April – May time frame.

“Oil would peak out around $125 (per barrel), and inflation would peak out in May and go lower.

“That’s what happened, but recently, MOU (Memorandum of Understanding with Iran) has been torn up and oil is back on the rise.

“Oil collapsed to around the low $70s to high $60s after the MOU. It’s now $80 and change.

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“So, unless this is resolved quickly, the other scenario is on the table.”

Dowd warned that if oil breaks through the $100-$125 range and holds those gains, prices could ultimately climb toward $200 to $250 per barrel.

“All we are talking about here is my thesis that we are going into a global recession, and it gets pulled forward that much quicker,” he said.

“We will have a burst of inflation and massive demand destruction.”

AI Bubble Nearing Collapse

Dowd also believes another major threat is building inside financial markets.

He argues that the artificial intelligence boom has become an unsustainable investment bubble that is dangerously inflating stock valuations.

“The stock market is 45% AI and AI adjacent,” Dowd said.

“When the equity market figures out the party may be slowing or it’s over, that will affect the stock market.

“It’s a feedback loop that I think is beginning.

“Let’s call it the AI summer of discontent.”

Dowd believes semiconductor stocks have become dangerously overextended after a massive rally fueled by AI spending.

He says rapidly rising chip prices, soaring electricity costs, and the enormous expense of building AI infrastructure are undermining the economic assumptions supporting the boom.

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“The whole math does not work with the AI infrastructure in the credit driven AI complex,” Dowd said.

“So, the math kind of implodes on itself at some point.

“I think the party is closer to the end than the beginning, and closing time will be upon us soon.”

Dowd expects a sharp stock market correction once the AI boom begins to unwind.

He says investors should consider raising cash reserves, pointing to Warren Buffett’s decision to hold record cash levels.

“Cash is dry powder,” Dowd said.

Despite his recession outlook, Dowd believes the U.S. dollar remains fundamentally strong and expects gold to continue climbing, maintaining a long-term price target of $10,000 per ounce.

With warnings now emerging simultaneously over food supplies, energy markets, inflation, and financial markets, economists are increasingly cautioning that the world could be entering one of the most turbulent economic periods in decades.

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