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"It was not just Britain's World War I war debts, almost all of which were owed to the U.S., but the tipping-force of its Iraq war bills of the 1920's, that caused a run on the Pound Sterling in the early-mid 1920's.
And then it was Britain's ill-fated effort to support a falling Pound that caused U.S. Treasury Secretary Mellon to OK the 'loan' of U.S. gold reserves to London, followed by an increased use of the U.S. Dollar (then worth $20/oz of gold) as a world trade settlement currency. More and more U.S. gold left the country (as in the expression 'boatloads'), which prompted the Fed, which had only been around since 1913 and did not know what the hell it was doing, to increase the money supply (actually, it was the paper currency supply because the Fed has never operated a gold mine.) This additional Fed-created credit funded the 'Bubble That Broke The World,' as the great economic writer Garet Garrett called it, or 'the Roaring '20's' as it is affectionately known.
This FED-induced credit bubble, coupled with massive corporate and Wall Street shenanigans that make Enron & Worldcom look tame by comparison, led to the 1929 Panic in FDR's New York state. FDR's Wall Street Panic spread across the land of President Hoover, who in turn raised taxes during a recession 'to balance the budget,' and funded 'relief' and public works projects to get people back to working. This led to the successful candidacy in 1932 of one FDR, who campaigned against Hoover deficits and tax increases and wasteful 'make-work' programs (hey, it doesn't have to make sense... ). And FDR's November 1932 election precipitated a run on gold at America's banks, such that over 4,000 banks failed between election day in 1932 and inauguration day in March of 1933. So that the first thing FDR did upon becoming President was to close the banks and, upon reopening them a week later, order all Americans to turn in their gold to the U.S. Govt. And some might argue that it has been downhill ever since."