The White House's freshly unveiled National Security Strategy reads less like a traditional diplomatic blueprint and more like a call for global fiscal expansion. For the crypto market, addicted to the idea of rapid-fire interest rate reductions in the U.S. and worldwide, this seems to be a cold shower nobody ordered.

The core of the strategy, signed by President Donald Trump, explicitly champions an "America First" agenda backed by significant economic and military reorientation both at home and abroad.

Consider the directives: the strategy mandates that NATO allies raise defense spending to 5% of GDP, a hefty increase from its long-standing mandate of 2%. Japan and South Korea are also expected to spend more.

"Given President Trump’s insistence on increased burden-sharing from Japan and South Korea, we must urge these countries to increase defense spending, with a focus on the capabilities—including new capabilities—necessary to deter adversaries and protect the First Island Chain," the strategy says.

It adds further, "We will also harden and strengthen our military presence in the Western Pacific, while in our dealings with Taiwan and Australia we maintain our determined rhetoric on increased defense spending."

The document explicitly calls on U.S. allies to spend far more of their national gross domestic product on their own defense, and on greater American military investment in the Indo-Pacific to strengthen vigilance in that region.

Funding this kind of monumental expenditure inevitably means more government borrowing or bond supply worldwide, which would drive up bond yields, the cost of capital, and inflation, making it harder for central banks to cut rates. In fact, rate cuts may have little impact as increasing bond supply will likely keep yields elevated.

Moreover, increased borrowing by many of the already heavily indebted advanced nations could raise fiscal crisis risks.

If that's not enough, the strategy explicitly states that the "era of mass migration is over." It means that the U.S. may not import cheap labour at a pace seen in earlier years, which could make wages sticky, adding to inflation.

All this looks like a bullish tailwind for assets seen as inflation hedges and safe havens, such as gold. Bitcoin BTC$89,111.46 is also pitched as “digital gold” by its proponents but has failed to live up to the hype this year.

Gold has surged 60% this year despite the U.S. 10-year yield staying stubbornly above 4%, while BTC is now down nearly 5% on a year-to-date basis. Only time will tell if it evolves into digital gold in a world increasingly fiscally emboldened.

The Fed is expected to cut rates by 25 basis points next week, pushing the benchmark rate down to 3.5%. But with the security strategy calling for global expansion, the odds of steep rate cuts appear bleak.