Iran War Adds to Concerns About U.S. Government Solvency

Well, the U.S. government is insolvent.

This isn’t hyperbole. In fact, you could call it an understatement.

The Treasury Department recently released its consolidated financial statements for fiscal year 2025. Uncle Sam ended the year with just over $6 trillion in total assets against nearly $48 trillion in total liabilities.

For you non-accountants out there – that’s not good.

To put it in simpler terms, the federal government has $7.90 in liabilities for every one dollar in assets.

If the U.S. were a private business, it would be in bankruptcy court.

The release of these financial statements got virtually no attention in the mainstream financial media. Forbes was one of the few publications to highlight the numbers. As that report put it, America’s abysmal financial condition was met by “near-total media silence.”

Based on Forbes’s reporting, the U.S. government's financial position deteriorated by $2.07 trillion in fiscal 2025. The balance sheet now stands at an unfathomable negative $41.72 trillion.

The federal financial position was further eroded last year by a $2 trillion increase in the national debt and interest expense payable (now over $39 trillion), coupled with current liability of $438.8 billion for federal employee and veteran benefits.

And by the way, this doesn’t even include the unfunded liabilities of Social Security and Medicare.

Forbes ran through the numbers recently, noting that by any accounting standard, Uncle Sam is insolvent.

If you think the word “insolvent” is an exaggeration, insolvency is defined as a financial state where an individual or company cannot meet debt obligations as they fall due (that is, cash-flow) or has liabilities exceeding assets (balance sheet).

The U.S. government meets BOTH definitions of insolvent. And yet the mainstream continues to ignore it. As already noted, the Treasury released the data to the sound of crickets.

When we get these shocking reports, a few people sit up and take notice, but most people shrug. They just continue as if everything is fine.

Ladies and gentlemen, everything is NOT fine.

The massive debt and the relentless deficits are precisely why the Federal Reserve can’t raise interest rates to battle inflation.

Interest on the national debt cost $1.2 trillion in fiscal 2025. The federal government is already spending more on interest payments than it is on national defense or Medicare.

That leads to the second problem: Who is excited about loaning the U.S. money?

The debt matters, and those proverbial chickens will eventually come home to roost. Just because it hasn’t caused a problem yet doesn’t mean it won’t.

The problem with playing "kick the can down the road" is that you eventually run out of road.

Now let’s take a look at the market action in the metals here. Gold is essentially flat now thanks to a nice rally here on Friday. The yellow metal checks in at $4,504 an ounce as of this Friday midday recording.

Silver was completely flat as well through Thursday’s close, but is now showing a 2.6% weekly gain based on today’s advance of essentially that same amount. Silver comes in at $70.37 an ounce.

Platinum is down 2.7% to trade at $1,882, and finally palladium is down 1.8% to trade at $1,402 an ounce.

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