Silver Rises Over 120% YTD 
Key Takeaways:
— The U.S. Treasury’s FY2025 financial statements show a negative net position of $41.72 trillion.
— Including unfunded Social Security and Medicare obligations, total federal promises exceed $136.2 trillion.
— The GAO has declined to certify U.S. government financial statements for 29 consecutive years.
The U.S. government just admitted it’s insolvent.
Not through a press conference. Not through a congressional hearing. Through its own consolidated financial statements for fiscal year 2025 — released last week to near-total media silence.
The authors of a new Fortune analysis, Steve Hanke of Johns Hopkins University and David Walker, former U.S. Comptroller General, cut through the numbers. Their conclusion is difficult to dismiss. The U.S. Treasury’s own accounting shows $6.06 trillion in assets against $47.78 trillion in liabilities. That’s a negative net position of $41.72 trillion — and it gets worse from there.
What Do the Treasury’s Own Numbers Actually Show?
The balance sheet alone is sobering. Total liabilities are now nearly eight times reported assets. The largest drivers: a $2 trillion increase in federal debt and interest payable — now $30.33 trillion — and a $438.8 billion jump in federal employee and veteran benefits.
But those figures don’t capture the full picture.
The Treasury also publishes a separate Statement of Social Insurance — an off-balance-sheet accounting of future Social Security and Medicare obligations. That 75-year unfunded liability surged by $10.1 trillion in a single year, rising from $78.3 trillion to $88.4 trillion. The jump was driven primarily by a $6.9 trillion increase in projected Medicare Part B shortfalls.
Add those obligations to the official balance sheet liabilities, and total federal promises exceed $136.2 trillion. That’s roughly five times U.S. annual GDP.
There is one more detail worth noting. The Government Accountability Office issued a disclaimer of opinion on these financial statements. It was the 29th consecutive year the GAO could not confirm whether the statements were fairly presented — primarily due to ongoing problems at the Department of Defense.
What Does $136 Trillion Actually Look Like?
Most people cannot relate to trillion-dollar figures. Hanke and Walker offer a simpler frame: divide every number by 100 million.
What emerges is a household budget — and it looks like this. The household earns $52,446 per year and spends $73,378, running a $20,932 annual deficit. Its total liabilities and unfunded promises amount to $1,361,788, against just $60,554 in assets. The household is not simply overspending. It is structurally insolvent.
That is the word the authors use. Not “stressed.” Not “at risk.” Insolvent.
U.S. Treasury · FY2025 Financial Statements
The U.S. Balance Sheet: What the Numbers Actually Show
Scale adjusted to show relative size — all figures in trillions of U.S. dollars.
Official liabilities are now nearly 8× reported assets. When off-balance-sheet Social Security and Medicare obligations are included, total federal promises exceed $136 trillion — roughly 5× U.S. annual GDP.
Source: U.S. Treasury Dept. FY2025 Consolidated Financial Statements · Statement of Social Insurance · Fortune / Hanke & Walker, March 2026
Does “Insolvent” Mean the U.S. Is About to Default?
No — and this distinction matters. The United States issues the world’s reserve currency. It has access to deep, liquid capital markets. It can borrow at scale and, if necessary, create money to service its obligations. A traditional default is not the likely outcome.
But those tools carry consequences.
When a system’s obligations consistently outpace its capacity to fund them through growth and productivity, the adjustment rarely comes through austerity alone. Historically, it comes through currency debasement. Currency debasement is the process by which governments reduce the real purchasing power of their currency, typically by expanding the money supply faster than economic output grows. The process is gradual, persistent, and often invisible to investors tracking nominal portfolio values.
The system absorbs fiscal pressure by reducing the real value of money itself. Portfolios can appear stable — even rising — while their purchasing power quietly erodes.
What Happened in 1971? The guide that explains the moment our financial system changed.
Why Is the Debt Problem Getting Harder to Solve?
The traditional response to inflation is higher interest rates. But higher rates also increase the government’s cost of servicing its own debt. As borrowing costs climb, deficits expand. Deficits require more bond issuance. More issuance puts further pressure on rates.
This is a feedback loop — and it is now self-reinforcing.
The system has become increasingly sensitive to both inflation and interest rates simultaneously. Viable policy paths are narrowing. The range of predictable outcomes is shrinking.
Decades of ultra-low rates encouraged unprecedented debt expansion across governments, corporations, and households. That structure is now adjusting to a permanently higher-rate world.
At the same time, geopolitical fragmentation, trade tensions, and shifting global alliances are reshaping monetary trust. These forces do not disappear between headlines. They accumulate.
Why Are Central Banks Buying Gold at a Record Pace?
While much of the Western investment community continues to rely on traditional portfolio structures, central banks — particularly in emerging markets — have been increasing their gold reserves at a record pace. This is a strategic shift, not a speculative trade.
Gold carries no counterparty risk. It does not depend on a government’s promise to pay. It exists entirely outside the credit-based system. When debt levels and monetary policy begin to collide, that distinction becomes increasingly relevant.
It also helps explain why gold has historically re-emerged during periods of currency debasement, monetary stress, and geopolitical uncertainty.
What Should Investors Actually Do With This Information?
The key point is not that a crisis is imminent. Dramatic outcomes are never guaranteed.
The point is that the underlying trajectory has shifted — confirmed now by the government’s own accounting.
When a system becomes structurally imbalanced, where obligations consistently outgrow the capacity to fund them, the range of likely outcomes narrows. Historically, those outcomes include higher inflation, currency debasement, and financial repression. They tend to arrive gradually — not all at once.
The question is not whether these forces will appear overnight. It is whether a portfolio is positioned for a world where they gradually intensify.
In an environment defined by expanding promises and narrowing solutions, assets that sit outside those promises take on a different role. Not as speculation. But as insurance.
Investing in Physical Metals Made Easy
People Also Ask
Not through a formal announcement — but the Treasury Department’s own FY2025 consolidated financial statements, released in March 2026, show $6.06 trillion in assets against $47.78 trillion in liabilities, a negative net position of $41.72 trillion. Economists Steve Hanke and David Walker analyzed these numbers in Fortune and concluded the U.S. is, by any accounting standard, insolvent. The media largely missed the story.
Government insolvency doesn’t mean an imminent collapse or missed payments — the U.S. can still borrow and create currency. What it does mean is that the most historically likely adjustment is currency debasement: a gradual erosion of the dollar’s purchasing power that quietly reduces the real value of savings and portfolios over time. Assets that exist outside the financial system, like physical gold, have historically preserved purchasing power through these cycles.
The Treasury’s FY2025 Statement of Social Insurance shows $88.4 trillion in 75-year unfunded social insurance obligations — up $10.1 trillion in a single year. When added to the $47.78 trillion in official balance sheet liabilities, total federal promises exceed $136.2 trillion, roughly five times U.S. annual GDP.
Central banks — particularly in emerging markets — have been net buyers of gold for over a decade, adding more than 1,000 tonnes annually since 2022. The primary reason is that gold carries no counterparty risk: unlike U.S. Treasuries, it cannot be frozen, defaulted on, or devalued by government policy. As confidence in fiat currency systems erodes, gold is increasingly being treated as a core reserve asset rather than a speculative one.
Currency debasement is the gradual reduction of a currency’s purchasing power, typically caused by governments expanding the money supply to fund obligations they can’t meet through taxation alone. For investors, the danger isn’t a sudden collapse — it’s that portfolios can appear stable in nominal terms while their real value quietly shrinks. From ancient Rome to the modern dollar, this pattern has repeated throughout history.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Past performance is not indicative of future results. Consult a qualified financial advisor before making any investment decisions.
