Capital wars are coming: US debt and international financial repression, 3 September 2026

US fiscal challenges make unorthodox macro policy (such as financial repression and fiscal dominance) increasingly likely.  However, there will be a US preference for imposing financing costs on foreign investors.  ‘America First’ measures to coerce foreign capital to finance US government borrowing are increasingly likely, an international form of financial repression. 

These US measures will cause tension with countries in Asia, Europe, and the Gulf that are implementing policy measures to deploy more domestic capital at home.  Capital wars are the consequence, as increased US demand for capital intersects with a constrained supply. 

US attempts to implement an extractive financing model represent a regime change in the international financial system, reminiscent of historical big power behaviour.  Irrespective of the specific end-point, capital wars are likely to be more consequential than the recent trade wars, leading to first-order global economic, financial, and geopolitical turbulence.

Note: This is a holding page for client notes that have been distributed.   Do get in touch (contact@landfallstrategy.com) to discuss options for access to these regular notes and accompanying briefings and discussions.  Other recent notes include:

The return of fiscal primacy: regime change in an age of debt, August 2026

A post-Iran new world economic order, April 2026

Regime change, inflation, and the Fed, March 2026

Regime change: from the market state to state capitalism, February 2026

Thoughts on the 2026 outlook, January 2026.