Gold and the National Debt.
In 1971 the USA went off the Gold Standard.
The main, or rather, the only, reason that the US went off the gold standard was that the US National debt was already exploding, and foreigners were coming calling to convert their dollar holdings into gold. The USA did not have enough gold to meet all those claims.
Back in the 1940s US liabilities were 40% covered by gold. By 1971 that figure had fallen just 4%.
In 1971 the USA possessed around 8500 tonnes of gold, but the national debt, then approaching $400 billion, would have needed nearly 300'000 tonnes of gold. Foreign holdings of US liabilities were less than 10% of that but more than enough to exhaust the US gold reserves.
Put another way, total US gold holdings amounted to $13 billion compared to between $15 and $40 billion in the hands of foreign central banks.
Although the liquid dollar holdings of foreigners did not constitute a specific claim on US gold reserves and the US had no legal obligation to convert them into gold, it had for many years been their policy to do so upon request from foreign governments and central banks. Abandonment of this policy would have had such widespread and unstabilizing effects that as a practical matter it could only be considered under most unusual circumstances.
By the late 1960s and early 1970s the situationn had become "most unusual". Foreign central banks and governments wanted their "money" back. There was a steady stream of foreign central banks exchanging their dollars for gold at the official price of $35. Those who could do the maths figured out that you didn't want to be the last one in line.
These substantial redemptions significantly depleted U.S. gold reserves, which had declined from over 20,000 tonnes in the early 1950s to approximately 8,500 tonnes by the time President Nixon closed the gold window in August 1971.
Things came to a head in mid-1971 as foreign central banks were racing each other to get their gold back. In July 1971 Switzerland redeemed $50 million. In August, Britain and France tried to get their gold. France initially redeemed $191 million. Britain wanted $3 billion and France wanted to redeem a further $1 billion. These two amounts alone represented 40% of the US gold holdings. France even sent a battleship into New York Harbour to collect their gold. On August 15th, 1971 President Nixon suspended the convertibility of the dollar into gold. Neither France nor Britain got their money. The battleship left empty. The gold convertibility suspension was described by Nixon as "temporary".
With no further obligation to redeem gold, the USA had no restriction on its spending and borrowing. So that's just what they did. Borrow and Spend. The USA boomed as newly printed money fuelled growth. Capitalism flourished.
You are probably asking where we are today. At the official price the US debt is only 0.03% covered.