The Genoa system of 1922 transformed trade deficits by allowing USD and GBP to be held as reserves and recycled into debtor-country debt, delaying the credit tightening that gold outflows once imposed. Jacques Rueff called this a “deficit without tears.” Today, Japan’s reserve drawdowns and China’s preference for gold over U.S. Treasuries are reversing that process, transmitting trade imbalances back into the U.S. credit structure through higher rates, duration pressure, and a weaker dollar.
Gold's value under a classical gold standard can be viewed as a "Max of Maxes": in each country it reflects the higher of its monetary value or its commodity/jewelry value, while globally it gravitates toward the highest-valued use anywhere in the world. Gold flows toward regions where it commands the most goods and services, linking specie movements to productivity and trade. Unlike Bitcoin, gold retains a non-monetary valuation floor and a unique role in international settlement.