U.S. National Debt Surpasses $40 Trillion: What This Means for the Dollar, the Global Economy, and Ukrainians

Does the record-high U.S. debt mean that the dollar will begin to lose ground, the euro will rise in value, and gold will continue to hit new highs? And most importantly—should Ukrainians make any changes to their savings right now?

“Shelter” posed these questions to three financial experts—investment banker Serhiy Furs, president of the “UNIVER” investment group Taras Kozak, and financial analyst Andriy Shevchyshyn.

$40 trillion and 615 million years: Who actually holds America’s debt?

The figure of $40 trillion is what is known as the gross federal debt. It consists of two parts: debt owed to the public and intra-governmental debt, where the government owes money to itself. This amount does not include Americans’ personal debts or state debts.

The bulk of the debt is held by the public—money borrowed from investors outside the federal government. According to estimates by the Committee for a Responsible Federal Budget, it exceeds $32 trillion. Creditors include:

● the Federal Reserve System and government accounts;

● U.S. banks;

● pension and mutual funds, and insurance companies;

● state and local governments;

● households and other domestic investors;

● foreign and international investors.

According to data cited by Euronews, citing the U.S. Treasury Department, as of the end of June 2026, domestic holders accounted for about 76% of federal debt—that is, this refers specifically to the official breakdown of holders published by the Treasury Department itself. Foreign investors held $9.27 trillion, or 24.1%. Japan remains the largest single foreign creditor, with a portfolio of $1.12 trillion—12% of all foreign holdings.

To put this in perspective: it would take the average American worker over 615 million years to earn an amount equivalent to this debt. This is not an economic indicator, but merely an illustration of how abstract this figure appears when converted to a single person’s lifetime.

Interest on the debt is already more expensive than the military

The U.S. government spends significantly more than it earns. According to a forecast by the U.S. Congressional Budget Office (CBO), federal spending in fiscal year 2026 will total about $7.4 trillion, while revenue will be $5.6 trillion. Thus, the projected budget deficit will reach $1.9 trillion, or 5.8% of GDP.

Where does this money go:

● $1.67 trillion – Social Security;

● approximately $1.9 trillion – health care programs;

● $918 billion – defense;

● $1.04 trillion – interest on the debt;

● about $1.9 trillion – all other federal programs: education, transportation, veterans.

Interest payments have already exceeded the country’s entire defense budget. Maya McInnes, chair of the Committee for a Responsible Federal Budget, notes that the debt “is felt throughout the economy,” as it fuels inflation and crowds out other budget priorities.

A figure that means nothing without one key metric

Investment banker Serhiy Fursa explained in a comment to “Shelter” that the amount of debt alone says little without reference to the size of the economy.

“A country’s national debt is always growing; that’s perfectly normal,” says Fursa. According to him, what matters most are not the absolute figures, but the debt-to-GDP ratio, the size of the budget deficit, and debt service costs.

Taras Kozak, president of the “UNIVER” investment group, provides specific benchmarks. The U.S. debt-to-GDP ratio currently stands at approximately 122–124%. That’s high by old standards, but not a world record.

“In Japan, the debt-to-GDP ratio exceeds 200%,” Kozak notes. He points out that the classic 20th-century rule—that debt should not exceed 60% of GDP—is a thing of the past.

The key difference for the U.S. lies elsewhere—in the rate of growth. Kozak emphasizes: if the economy grows more slowly than the debt, the situation spirals out of control. This is exactly what is happening in America right now.

The moment when debt goes from being an abstraction to a threat

According to Fursa, the critical indicator is not the debt itself, but the cost of servicing it. Currently, this accounts for 3.3% of U.S. GDP.

“The last time we saw a figure like this was during the Clinton administration,” Fursa explains. Back then, the problem was resolved through a balanced budget, and for decades it didn’t trouble the economy. Now it has returned, and the reason is a record-high budget deficit that continues to grow with no plans to reduce it.

Financial analyst Andriy Shevchyshyn describes the situation in even harsher terms. According to him, “the debt has been accumulating since the 2008 financial crisis,” when the Fed maintained zero interest rates and actively bought up debt securities to support the economy. This, in essence, deferred the problem to the future.

Shevchyshyn identifies three classic scenarios for resolving the debt problem:

1. Default—but this would trigger a global crisis of unprecedented proportions, so it is unlikely;
2. Accelerated inflation—the debt would depreciate on its own;
3. New markets—according to Shevchyshyn, theoretically, one could attempt to resolve the debt by opening new markets for domestic investment, and among the ways to achieve this, he mentioned, among other things, “military action.”

In his assessment, American economic thought currently lacks a clear tool for resolving the problem that has already accumulated.

The dollar is weakening, but there is nothing to replace it with yet

All three experts agree on one thing: there is no immediate replacement for the dollar, so it is too early to talk about it losing its status as a reserve currency.

“There’s nothing to replace the dollar with,” Fursa emphasizes. He explains that confidence in a currency can only be undermined when a real alternative emerges, and the euro is not yet ready to take that place.

At the same time, Fursa makes a distinction between the dollar’s status as a reserve currency and its exchange rate. “The dollar itself is already weakening,” he notes, attributing this to the U.S. government’s attempts to redeem long-term debt by issuing new short-term debt.

Shevchyshyn describes the same mechanism differently. According to him, the Fed is trying to swap long-term debt for short-term debt because interest rates on long-term securities are too high.

“We’re seeing other assets—gold, cryptocurrencies—rise in value,” Shevchyshyn notes, explaining that this is a direct market reaction to the Fed’s actions, which he described above.

Taras Kozak adds another nuance to this: the creditworthiness of U.S. debt is assessed by the three major global rating agencies—Standard & Poor’s, Fitch, and Moody’s— and all of them maintain the U.S. rating at a fairly high level, though no longer at the highest level (Standard & Poor’s – AA+, Fitch – AA+, Moody’s – Aa1, – ed.). But all three agencies are American and are regulated by U.S. authorities.

“It’s probably safe to say they aren’t entirely objective,” Kozak notes, referring to possible bias in favor of their own country.

China is trying to build a viable alternative to the dollar through the digital yuan, says Shevchyshyn. However, in his assessment, Beijing currently lacks sufficient influence to realistically challenge the dollar in the near future.

Taras Kozak adds that an alternative to financing the debt through new investors could be either direct money creation by the Federal Reserve or accelerating inflation, which “erodes” the debt relative to GDP. In his view, a realistic scenario would be inflation at 7–10%, similar to what the U.S. experienced in the 1980s.

60 hryvnias per euro as early as next year?

This is the question that worries people the most, and experts’ answers differ somewhat in the details, although they generally agree on the overall direction.

Kozak breaks down the logic of exchange rate formation into a simple formula: the hryvnia depreciates depending on the difference between Ukrainian and U.S. inflation. If inflation in the U.S. accelerates, pressure on the hryvnia against the dollar eases. Conversely, pressure on the hryvnia against the euro is growing faster, as the euro is already strengthening relative to the dollar.

“The euro will appreciate against the hryvnia much faster,” says Kozak, adding that the exchange rate could reach 60 hryvnias per euro as early as next year.

Fursa also sees the euro as having an advantage over the dollar for savings in this context, although he emphasizes that this does not refer to cash under the mattress, but rather to financial instruments capable of offsetting inflation.

Shevchyshyn warns against oversimplification: just because the dollar is weakening globally does not mean the hryvnia will automatically strengthen in Ukraine. According to him, the dollar’s weakening against global currencies and its exchange rate against the hryvnia are distinct processes, as the domestic Ukrainian market operates by its own rules (foreign currency shortages, the war, and the volume of international aid).

Gold has already overtaken the dollar in central bank reserves

According to Fursa, the most noticeable market reaction to this situation is the rise in the price of gold. He directly links this to the methods the Trump administration is using to manage the debt.

“Gold has already surpassed the share of Treasury securities in reserves,” Fursa notes, calling this an atypical phenomenon for recent decades. Central banks around the world are actively reducing the share of dollar-denominated assets in favor of gold.

Shevchyshyn also links the rise of other currencies to this Fed operation. “This is causing global currencies—the euro and the pound sterling—to rise,” he adds, mentioning cryptocurrencies among safe-haven assets, which are also rising for the same reason.

Why money is becoming more expensive even for those who owe nothing to the U.S.

10-year U.S. Treasuries recently yielded over 4.6%, while 30-year Treasuries yielded over 5.2%. This indicates that the market is selling off these securities and pricing in additional long-term risks, particularly high inflation and the rapid growth of U.S. government debt.

According to Kozak, in order to attract enough buyers for new debt issuances, the U.S. is forced to offer higher yields. “We have to increase yields, pay more interest,” explains Kozak.

Higher yields on U.S. securities raise the bar for the “risk-free” rate, against which all other assets in the world are compared. More expensive money in the U.S. means more expensive financing for other countries as well, including those that actively borrow on external markets.

Where is the risk for the donors on whom Ukraine depends?

All three experts associate the direct threat to Ukraine not with the U.S. debt itself, but with the possible scenario of a global financial crisis.

“If there is a major global financial crisis, Ukraine will feel it,” says Fursa, adding that the impact may be less severe than in 2008 because the war is already weighing on the country’s economy.

Fursa sees a long-term risk in a possible reduction in international aid if the global economy faces serious problems and it becomes more difficult for donors to allocate funds. According to him, the risk is theoretical, but it exists.

The same crisis scenario, according to Fursa, would also hit the Russian economy.

Shevchyshyn cautions against panic: the global decline in the dollar’s purchasing power should not be confused with a direct blow to the hryvnia—the mechanisms are entirely different.

What to Do with Dollars in Your Drawers

The practical advice from all three experts boils down to a single principle: diversification without excessive concentration in the dollar.

Kozak proposes a specific savings structure: keep the majority of assets in hryvnia through financial instruments, specifically government bonds (OVDP) with a yield of 15–16% per year, tax-free. Distribute the remainder between the euro and the dollar, with a greater share in the euro.

“The dollar’s purchasing power is falling,” says Kozak, citing an example: over the past 20 years, the dollar has lost half its value in Ukraine when it comes to goods and real estate.

Fursa agrees that keeping foreign currency “under the mattress” is irrational because of inflation, which erodes savings regardless of the currency. His advice is to invest in government bonds or deposits that offer a return capable of offsetting depreciation.

None of the three experts advises panicking and getting rid of dollars or abruptly shifting all holdings into a single currency. Kozak puts it this way: the right approach is to diversify across three currencies at once, “because we cannot know the future,” he concludes.

So the record U.S. debt alone does not mean that the dollar will collapse tomorrow, nor does it mean that Ukrainians need to urgently switch the currency of their savings. Experts advise taking a broader view: the main risks remain inflation, interest rates, and fluctuations in global currencies.

For Ukrainians, this means one simple thing: $40 trillion in U.S. debt is not a direct signal to buy euros or gold. But it is yet another reason not to keep all savings in a single asset and not to make currency bets on a future that no one can predict with certainty.