Gold was convertible to dollars and vice versa for private citizens up to 1933. US dollars were convertible to gold for US trading partners until 1971. Going off the second gold standard in 1971 is one of the main causes of the 1970s inflation.
Inflation allows governments to spend more than they have because inflation reduces the burden of debt.
What makes a currency valuable is what one can buy with it. North Korean currency is worthless because one can buy nothing with it. North Korea must often make many transactions in hard currency. South Korea has an economic powerhouse, and its currency is valuable.
Governments in depression are more interested in getting increases in economic activity than in keeping debt at bay. When the economy overheats, then and only then does a depresed economy operate in a phantom zone.
It is economic activity and not hoarded gold that makes a country rich.
