Nov 9, 2026 · 43 min
Global capital turns against America’s economic order
The Return of Economic Populism and the End of Two Percent | Vincent Deluard
The episode connects electoral backlash, persistent inflation, and foreign capital repatriation to a possible break with US financial dominance.
- 1Economic populism is gaining force as inflation, war fatigue, and distrust of established arrangements reshape politics.
- 2Fiscal pressures are eroding confidence in the two percent inflation target and reviving conflict between monetary and fiscal policy.
- 3Capital repatriation by Canada, Japan, France, and others could pressure US equities, Treasuries, and the dollar.
Don't miss
Deluard identifies the repatriation of foreign savings as a potential challenge to the capital flows supporting US equities, Treasuries, and valuations.
The brief
Vincent Deluard and Demetri Kofinas read the midterm results as evidence of a broader populist turn, driven less by campaign spending than by inflation, war fatigue, and economic frustration.
Deluard argues that Trump’s perceived break with his antiwar mandate, combined with high energy prices, weakened the coalition that brought him to power and revived left-wing economic populism.
The two percent inflation target is losing credibility as fiscal dominance grows, while subscriptions, algorithms, and personalized pricing make inflation feel more uneven than official measures suggest.
Mexico’s peso faces reversal after years of support from US growth, nearshoring, tourism, remittances, and carry returns; border enforcement, USMCA uncertainty, and weaker tourism now point the other way.
The sharpest market risk arrives when Canada, Japan, France, and other countries reclaim savings invested in US assets, challenging the capital flows behind American outperformance.
France’s fiscal crisis and political polarization complete the picture: national capitalism is returning as governments seek leverage over trade, savings, inflation, and domestic investment.
What was said on this episode
23 statements · 13 positive · 10 negative
The Democratic midterm victory represents an exceptionally large political shift.
“this is really a once in a century type of tide”
Listen at 5:32
“The movement will probably gather strength.”
Listen at 6:10
Campaign spending no longer reliably determines election outcomes.
“that link appears to have been severed definitively”
Listen at 7:06
US politics is shifting toward economic issues and rising left-wing populism.
“we are seeing really a shift to economic issues and I think a seemingly unstoppable rise of left-wing populism”
Listen at 7:50
American voters increasingly oppose involvement in foreign wars.
“The American electorate just really doesn't want to be involved in wars anymore.”
Listen at 9:49
The economy remains in a period of secularly elevated inflation.
“The biggest shift is this secular inflation story, I think, which we are still very much in the middle of.”
Listen at 12:25
Fiscal policy will prevail over monetary policy in major democracies.
“the outcome will be that fiscal will win”
Listen at 14:12
Personalized pricing shifts economic welfare from consumers to producers.
“that new model effectively shifts welfare from consumers to producers”
Listen at 18:29
The Mexican peso experienced an unusually strong four-year period.
“the super peso was really a phenomenon that emerged in the past 4 years”
Listen at 19:56
Cancun hotel reservations have fallen by roughly 50–70%.
“hotel reservations are down by 50, 70%”
Listen at 22:53
The Mexican peso is likely to weaken as its supporting drivers reverse.
“everything's lining up for the peso to weaken”
Listen at 24:11
US tariffs will return because they offer the fastest feasible revenue source.
“I expect tariffs will be back on the agenda because it's really the only feasible way to generate revenue rapidly.”
Listen at 26:50
Canada’s economic outlook is improving.
“Things are looking up for Canada.”
Listen at 27:17
Canada has greater leverage than Mexico in USMCA negotiations.
“Canada has a much stronger hand than Mexico in this negotiation”
Listen at 31:08
Foreign capital inflows drove US asset outperformance over the past decade.
“it's been really the main driver of of US outperformance for the past 10 years has been these continued foreign inflows”
Listen at 31:51
National capitalism is re-emerging in Japan, Europe, and Canada.
“national capitalism is coming back”
Listen at 32:21
The US received 90% of global surplus capital over the past five years.
“90% of the world surplus globally went to the US in the past 5 years”
Listen at 32:50
France currently exhibits the characteristics of a debt crisis.
“France really ticks all the boxes of a debt crisis”
Listen at 35:47
France has debt near 120% of GDP and a deficit around 5–6%.
“we have a debt-to-GDP of 120%. We have a deficit of 5, 6%.”
Listen at 35:50
Marine Le Pen will eventually win France’s election and her economic stance may hurt French debt.
“she's probably much more on the left, which again, probably is not very good news for French debt because eventually she will win the election.”
Listen at 38:50
Marine Le Pen is polling at 40%.
“she's polling at 40%”
Listen at 39:03
Marine Le Pen favors lowering the pension age and expanding government’s role.
“she wants to lower the pension age, she wants a bigger role for the government”
Listen at 40:17
A Marine Le Pen victory would likely be unfavorable for French bonds.
“even what I think is going to be the most optimistic scenario, which is a Le Pen victory, is not going to be that great for the French bond market.”
Listen at 40:22
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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