High national debts: what does this mean for wealth protection?

Worldwide, government debts are at record levels. That sounds like a problem for ministries and central banks, but the consequences reach into your own portfolio and savings account. Higher national debts affect interest rates, inflation, the purchasing power of your money, and ultimately the return on almost every investment.

In this article, you will read how large the national debt of the Netherlands and America really is, how it affects your wealth, and what role precious metals can play in protecting your purchasing power.

The Silver Mountain specializes in physical gold and silver. We therefore view this topic with a clear focus on wealth protection, but in a balanced way: with the numbers, the risks, and the nuances you need to make a well-considered decision yourself.

What is national debt exactly?

The national debt (or government debt) is the total amount of borrowed money that a government still has to repay. A government usually borrows by issuing government bonds to investors, pension funds, insurers, and foreign parties. When a country spends more than it takes in year after year, a budget deficit, that debt accumulates.

To compare debts among themselves, economists do not only look at the absolute amount, but mainly at the debt ratio: the national debt as a percentage of the gross domestic product (GDP). That ratio shows how heavy the debt weighs relative to what an economy produces annually, and thus how well a country is able to bear the debt.

Within the European Union, the so-called three-sixty rule has applied since the Maastricht Treaty: the annual budget deficit may not exceed 3% of the GDP, and the total government debt may not be higher than 60% of the GDP. These standards are intended to prevent debts from becoming unsustainable.

How much national debt does the Netherlands have in practice?

Many private investors wonder how our own country is doing when setting up their wealth management. Internationally speaking, the Netherlands is currently doing incredibly well. The total Dutch national debt amounted to approximately 492 billion euros halfway through 2025 and is estimated by the Ministry of Finance at around 533 billion euros for the end of that year.

More important than this absolute billion-euro amount is the national debt ratio. This ratio came out to approximately 45% of our gross domestic product in 2025 and, according to the official Budget Memorandum, will rise slightly to approximately 48% in the year 2027. With this, the Netherlands fortunately still remains well below the critical European standard of 60%. Our debt ratio recently even reached almost the very lowest point in 30 years.

Yet, according to the warnings from De Nederlandsche Bank, there is no reason for carelessness. The underlying national figures show a number of highly risky trends for your financial future:

• A rising budget deficit: The national deficit is rising at a rapid pace from over 2% to nearly 3%. With this, our government is rubbing directly and dangerously close against the European maximum limit.
• Exploding interest burdens: The annual interest costs on the outstanding national debt are increasing gigantically from almost 9 billion euros to over 10 billion euros. This is an unimaginable amount that definitely can no longer flow to our healthcare, education, or national infrastructure.
• Heavy pressure on the treasury: In the long term, rapid aging, structurally higher expenditures for defense, and exploding healthcare costs put government finances under leaden financial pressure.
• Less financial resilience: Due to all these rising obligations, the government has significantly less leeway to absorb a subsequent economic shock. A country that is already borrowing at its maximum can simply offer much less financial support to the market during a severe crisis.

How much national debt does America have and why does this affect us?

The economic picture in the United States is of a completely different order than in Europe. The American national debt amounts to approximately 38.7 trillion dollars at the beginning of 2026. This means a doubling in a period of only 15 years and it comes down to over 113,000 dollars per inhabitant.

At the end of March 2026, the debt held by the public crossed the critical threshold of 100% of the gross domestic product for the first time. The outstanding debt has hereby officially become larger than the entire American economy. If we measure the total gross debt, the debt ratio is even around 123% to 125% of the gross domestic product.

The Congressional Budget Office also expects this public debt to rise further from approximately 101% in 2026 to around 120% in 2036 and a dizzying 175% around the year 2056.

There are 3 developments that make the American situation exceptionally vulnerable and directly affect the global financial system:

• Rapidly rising interest burdens: The average interest rate on the American debt was around 3.35% at the beginning of 2026, and that is considerably higher than the approximately 1.5% from 5 years ago. These interest payments now swallow up about 14% of all federal spending, which is now more than the complete national defense budget.
• Increasing refinancing pressure: The United States must continuously roll over expiring debts into new loans. Where that was previously possible without problems at interest rates of 1% to 2%, it is currently happening at rates of 4% to 5%, causing a larger part of the budget to evaporate into pure interest every year.
• Loss of the highest credit rating: All 3 major international credit rating agencies have now stripped the American AAA status. Standard and Poor's did this in 2011, after which Fitch followed in 2023, and Moody's completed this trend in 2025. A lower rating means that investors demand a higher risk premium, which automatically drives interest rates up further.

How do the Netherlands and America compare to the rest of the world?

The following comparison puts the earlier figures into a clear perspective. This concerns the indicative debt ratios, or the total national debt expressed as a direct percentage of the gross domestic product around the beginning of 2026.

The Netherlands is doing well, but is affected by foreign countries

The Netherlands is therefore among the most solid pupils in the class. But as the financial crisis of 2008 and the euro crisis showed: financial systems do not take national borders into account.

Dutch banks, pension funds, and insurers own bonds of other countries. If a large country gets into payment problems, that also affects Dutch institutions through contagion. And as an export country, the Netherlands feels every international shock immediately.

You can protect your accumulated wealth by investering in multiple categories, like real estate, stocks, crypto and precious metals.

The direct influence of national debt on investing

For those who manage their wealth, the influence of a rising national debt on investing is not a distant show. High government debts work directly through various channels into almost every conceivable asset class. Below we discuss the 4 most important effects on your personal portfolio:

Interest and bonds

The higher the national debt, the more risk compensation investors demand to lend their capital to a government. This translates into higher interest rates on new government bonds. The painful disadvantage of this is that your existing bonds immediately drop in value.

An interest rate increase of just 1 percentage point can quickly cost long-term bonds 8% to 10% of their total value. Because the government interest rate also functions as the anchor point for the entire economy, corporate bonds and mortgages also become significantly more expensive.

Equities and the crowding out effect

When a government swallows up gigantic amounts of capital, there is logically less money left for companies and consumers. This so-called crowding out effect depresses private investments and slows down economic growth considerably. In addition, growth stocks are much more sensitive to a higher interest rate than value stocks with strong and tangible cash flows.

The well-known study by Reinhart and Rogoff once suggested that economic growth structurally declines as soon as the debt ratio exceeds 90%. Although later calculations nuanced this hard limit, the basic rule remains firmly in place. High debts correlate with lower economic growth.

Inflation and purchasing power

The most insidious risk for your accumulated wealth is the loss of purchasing power. Governments with sky-high debts benefit enormously from the real debt burden slowly shrinking. Inflation helps perfectly with that because debts are then repaid with money that is worth less and less.

For you as a saver, this persistent inflation means that the true value of your money melts away unnoticed. In our article about the influence of the central interest rate on precious metals, we delve much deeper into this complex interplay between interest and inflation.

Currency risk

A country can also alleviate a too heavy debt burden by deliberately letting its own currency weaken. For a Dutch investor with many American investments, this poses a real risk.

After all, a weaker dollar can immediately turn a seemingly wonderful return in dollars into a loss as soon as you convert this back to the euro. A well-diversified portfolio across multiple regions and currencies limits this specific currency risk.

What role can precious metals play in wealth protection?

In a world of rising national debts, more and more investors, and central banks, are gravitating towards tangible assets. Gold and silver have a characteristic that no bond or bank account has: they are no one's debt.

The value of physical precious metal does not depend on the promise of a government or bank to repay, and cannot be printed or inflated away.

That explains why precious metals historically perform well in periods of monetary uncertainty:

• No counterparty risk: physical gold and silver retain value, even if confidence in currency or the financial system comes under pressure. It thereby functions as a form of financial insurance for many investors.
• Protection against inflation and currency devaluation: where cash loses purchasing power, precious metals have actually maintained or increased that purchasing power over long periods.
• Low or negative correlation with stocks and bonds: as a result, a modest gold or silver position can dampen the fluctuations in a total portfolio. This is the core idea behind diversification and asset allocation.

A fair assessment for your personal wealth management

At The Silver Mountain, we attach great value to honesty and full transparency. Gold is a fantastic historical protector, but it is not a magic cure-all. For a successful strategy, it is important to very consciously weigh the following nuances:

• No regular dividend: physical precious metal does not pay out a periodic dividend or annual savings interest. It protects your wealth exceptionally well, but it is not a direct engine for exponential profits. Read our extensive analysis on compound interest versus gold regarding this.
• Tax in box 3: in the Netherlands, your precious metal simply counts as wealth in box 3 of the income tax. You pay tax on this annually to the tax authorities, which always has a slight impact on your net return.
• Secured storage: physical possession naturally requires a secured safe in your own home or a professional external storage via a reliable partner such as Edelmetaal Beheer Nederland.

Gold and silver therefore pre-eminently form the best foundation for the long term as a solid part of a broad diversification. You will discover the optimal strategy for this in our extensive article on structural wealth accumulation.

Overview: the advantages and disadvantages of precious metal as wealth protection

How do you position your wealth with high national debts?

Unfortunately, there is no ready-made answer that applies to every investor. The right approach always depends entirely on your personal goals, your investment horizon, and your risk tolerance.

However, from the current figures and the current market dynamics, 5 shared principles emerge for optimal protection:

• Asset allocation: spread your capital wisely across various asset classes such as equities, bonds, real estate, precious metals, and immediately withdrawable savings. In addition, ensure a broad distribution across different regions and currencies. Too large an exposure to 1 specific country or a single currency significantly increases your risk. This certainly applies to a portfolio that leans heavily on American investments, exactly where the debt pressure is currently highest.
• Think in scenarios and not in predictions: no one knows exactly when an escalating debt problem will actually erupt. A strong portfolio is designed to withstand multiple economic outcomes instead of betting on just 1 specific scenario.
• Manage interest rate risk consciously: when investing in bonds, shorter maturities are less sensitive to unexpected interest rate fluctuations than the variants with a very long maturity.
• Look at real and tangible assets: physical assets such as gold, silver, and real estate offer a proven counterweight against rapid currency devaluation and the inevitable dilution of your currency.
• Always keep the long term in mind: panic is an incredibly bad advisor within professional wealth management. Those who let themselves be carried away by every screaming headline, in practice often make the worst decisions. A well-thought-out approach almost always wins out over impulsive choices in the long run. You can read how to lay such an ironclad foundation in our article on structural wealth accumulation.

Investing in precious metals, like gold and silver, is a smart way to protect your wealth against devaluation.

Is gold better than government bonds?

Gold and government bonds serve a different function. Government bonds can yield interest and are often used for stability in a portfolio. Gold pays no interest, but can actually offer protection when confidence in currencies, bonds, or financial markets is under pressure.

It is therefore not a question of whether gold is "better" than bonds. The better question is what role each component fulfills in your portfolio.

Government bonds can fit with income and predictability. Physical gold can fit with protection, diversification, and independence from the financial system. Within wealth management, it is exactly the combination that can be valuable.

The difference between return and wealth preservation is also important. In the article on compound interest versus gold, you will read why compound interest is mainly about growth, while gold is rather used as strategic protection of purchasing power.

Conclusion: how to protect your wealth against high national debt

High national debts directly affect your financial future. They influence interest rates, drive up inflation, and lower the purchasing power of your savings. Where the Netherlands still seems safe with a debt ratio of 45%, the United States shows how quickly such margins evaporate worldwide.

For optimal wealth protection, broad diversification is therefore necessary. Physical precious metals such as gold and silver form an important foundation here. They offer an excellent counterweight against rapid currency devaluation and increasing systemic risks. Understand these macroeconomic figures, analyze the pros and cons, and make a well-considered choice that fits your personal horizon.

Consulted sources

To write this knowledge article, we used the following studies and sources:

• Statistics Netherlands (CBS). (2025). Government deficit of 3 billion euros in the first half of 2025. CBS News
• De Nederlandsche Bank. (2024, October 22). The effect of a growing pile of government debt on financial stability. DNB Background
• Ministry of Finance. (2025). Budget Memorandum 2026: Current state of government finances. National Finances. National Finances website
• U.S. Department of the Treasury. (2026). Understanding the national debt. Fiscal Data. Fiscal Data Treasury
• World Gold Council. (2026). Gold demand trends Q1 2026. Gold.org Research