101% of US Gross Domestic Product.
This is how high the publicly held US federal debt will be in 2026, according to the current projection by the Congressional Budget Office.
The historical record?
106% – in 1946.
Immediately after the Second World War.
Thus, American national debt is once again moving into a magnitude last reached after a global war.
However, the comparison initially leads in the wrong direction.
Measured by economic output, the magnitude is indeed correct.
But the economic situations could hardly be more different.
In 1946, the US was emerging from the largest military conflict in its history.
The extraordinary debt was the result of an extraordinary mobilization.
After that, something decisive happened:
The debt ratio fell.
Economic growth, inflation, and occasional budget surpluses or smaller deficits significantly reduced the debt burden relative to economic output over decades.
In 2026, the starting position is different.
The US is not at the end of a world war.
Nevertheless, the Congressional Budget Office forecasts a deficit of approximately $1.9 trillion, or 5.8% of GDP, for the current fiscal year.
Even more remarkable is the further projection.
The CBO does not expect the debt ratio to fall again after reaching this high level.
The opposite is the case.
| Year | Publicly held US debt as % of GDP |
|---|---|
| 1946 | 106% |
| 2026 | approx. 101% |
| 2030 | approx. 108% |
| 2036 | approx. 120% |
| 2056 | approx. 175% |
Under current legal frameworks, the debt ratio would thus exceed the 1946 record by around 2030.
By 2036, it would be around 120%.
And in the long-term CBO projection, the ratio reaches approximately 175% of GDP by 2056.
This is the decisive difference compared to the post-war period.
Back then, the peak of debt lay behind the US. Today, it could still lie ahead.
Relative indebtedness is only one side of the story.
On August 18, 2026, total US federal debt exceeded $40 trillion for the first time.
Of this, approximately $32.3 trillion was accounted for by market-held Treasury securities and approximately $7.8 trillion by intragovernmental holdings.
However, the absolute figure alone says little about the sustainability of the debt.
More decisive are economic output, revenues, and the cost of financing.
And that is precisely where the development becomes interesting.
No.
The United States borrows in its own currency.
The dollar remains the most important international reserve currency.
The market for US Treasuries continues to be among the largest and most liquid capital markets in the world.
Therefore, the immediate problem is not:
Can America pay back its $40 trillion tomorrow?
The more important question is:
What does it cost to finance this mountain of debt permanently?
For many years, the US was able to finance rising debt at historically low interest rates.
This environment has changed.
In August 2026, long-term yields on American government bonds rose to levels not seen in nearly two decades.
The yield on 30-year Treasuries temporarily exceeded 5%.
This sounds abstract at first.
However, for a state with a debt mountain of more than $40 trillion, the difference between low and high refinancing rates is enormous.
The CBO expects net interest outlays to rise from approximately 3.3% of GDP in 2026 to 4.6% in 2036.
Thus, the past claims an ever-increasing share of future government revenue.
Not because rising national debt automatically means rising gold prices.
This simple equation does not work.
Gold reacts simultaneously to real interest rates, dollar performance, inflation expectations, geopolitical risks, and the monetary policy of the Federal Reserve.
High bond yields can even weigh on gold.
Therefore, the connection between national debt and gold runs deeper.
A US Treasury bond is an asset for the owner.
For the United States, the same bond is a debt.
A bank deposit is an asset for the customer.
For the bank, it is a liability.
Physical gold works differently.
It is the liability of no one.
This characteristic also seems to be becoming more important again in the international reserve system.
Central banks bought a net 289 tons of gold in the second quarter of 2026 alone.
The background is not solely American national debt.
Diversification, geopolitical risks, sanctions, and the reduction of counterparty risks also play a role.
It would therefore be wrong to infer an imminent flight from the dollar from rising US debt.
The dollar remains dominant.
But central banks are diversifying.
And gold is among the beneficiaries of this development.
Perhaps that is why the similarity between the two years is not the most interesting aspect.
But rather their difference.
In 1946, the world war and massive state mobilization lay behind the US.
After that, the debt ratio fell for decades.
In 2026, the ratio is again around 101% of GDP.
But the CBO does not forecast a decline.
It forecasts:
108% in 2030.
120% in 2036.
175% in 2056.
Of course, long-term projections are not predictions. Tax policy, spending, growth, inflation, and interest rates can significantly alter the development.
But that is exactly why such projections are valuable:
They show where the current course leads under certain assumptions.
In 1946, high indebtedness was the result of an extraordinary crisis. In 2026, it threatens to become the normal state.
And perhaps that is exactly the figure gold investors should watch.
Not 40 trillion.
But 101 percent – with a rising trend.
Stay farsighted
Yours, Helge Peter Ippensen
