The Iran economic shock is coming. How to protect yourself

TL;DR

A US-Israel war with Iran has blocked the Strait of Hormuz, triggering an oil shock; the only real protection is owning assets, which requires wealth redistribution via taxation.

Key Points

• 1.The Strait of Hormuz blockade is the trigger. The US and Israel's conflict with Iran led to the blocking of the Strait of Hormuz, through which a massive share of global oil and gas flows, causing energy prices to spike 50% and driving knock-on rises in food and fertiliser costs.
• 2.Interest rate hikes are now expected globally. Financial markets anticipate two to three UK rate hikes in 2025, pushing the base rate from 3.75% to potentially 4.5%, while UK 10-year government borrowing costs jumped from ~4.2% to nearly 5% in a month.
• 3.Government energy subsidies repeat the COVID mistake. Price caps and subsidies eliminate visible pain by having governments borrow or print money, but the cost flows directly to energy owners — the rich — while collapsing government wealth, exactly as happened during COVID wage support schemes.
• 4.The UK government may be unable to respond at all. Rising borrowing costs combined with already-depleted government wealth mean the UK — already the highest borrower in Europe with slow growth and high debt — may lack the fiscal capacity to protect consumers during this crisis.
• 5.Domestic energy production doesn't protect ordinary people. Despite the US being the world's largest oil producer due to fracking, Americans still pay more during a crisis because that oil is owned by ultra-wealthy individuals who sell it globally, not by the American public.
• 6.The presenter personally profited hundreds of thousands of pounds. Owning a broad diversified portfolio including oil, wheat futures, corn futures, and property, he made large gains purely because he is rich and owns 'everything' — illustrating that asset ownership, not expertise, is the real protection.
• 7.Wealth inequality and high asset prices create the economic conditions for war. Drawing on his Oxford master's thesis on inequality and asset prices, he argues that when wages are cheap and assets expensive, powerful elites have an economic incentive to wage war to acquire more assets.
• 8.Government wealth collapse is not abstract — it means losing housing and energy security. Referencing Piketty/Zucman data on declining Western government net wealth, he argues that privatisation and crisis mismanagement have stripped governments of the housing and energy assets that once protected ordinary citizens.
• 9.The only real protection from future crises is taxation of the wealthy. Since crises consistently transfer wealth upward, and governments can no longer borrow indefinitely, the only path to rebuilding public and middle-class asset ownership is building tax systems capable of taxing the richest at fairer rates.