In the absence of government prohibitions and restrictions in favor of inconvertible paper and credit money, history shows that gold—or paper and credit money convertible to gold—was preferred and accepted in trade and exchange from time immemorial. Until recent times the gold standard also underwrote, indeed required, the trade rebalancing and equilibrium mechanisms of the international economy. In the absence of prompt balance-of-payments settlements in gold, the undisciplined official reserve currency systems have immobilized the international adjustment mechanism with the result being increasing trade imbalances, debt and credit leverage at home and abroad. For example, under the world dollar standard, other nations gain desired dollar reserves only as the United States becomes an increasingly leveraged debtor through balance-of-payments deficits; whereas under the gold standard, the global economy may actually attain balance-of-payments surplus as a whole vis-à-vis worldwide gold producers.
The true gold standard—without official reserve currencies—is the sole, rule-based monetary order which reliably and systematically rebalances worldwide trade and exchange among all participating nations.