No way 40 straight years of trade imbalances would’ve happened under the international gold standard. Transformation into a credit driven services economy ruled by a bi-coastal elite would’ve at least been slowed too. But do agree the Rubicon has been crossed, reality is that current system needs a global collapse before sound money can return. So with that in mind, hope the fiat works,and I’m all wrong about where this ends.
Yes. In fact, it was exactly this, which was the impetus to go off the gold standard. US balance of payments and trade deficits became steadily worse in the 1960s, as LBJ ran bigger debts, created social welfare programs, and waged war all at once. All were very inflationary.
French finance minister Jaques Rueff, and his boss, Charles De Gaulle, saw the USA's increasing debt and more dollars flowing abroad. They worried about a flood of dollars, and instead demanded their dollars be exchanged for gold. Instead of cutting government spending, reigning in deficits, raising interest rates, or limiting the welfare state - Nixon rather decided to shut down gold convertibility in 1971.
With that control gone, it was off to the races for US government debt, and especially for Federal Reserve manipulation of the economy via monetary policy.