Meanwhile, over the winter of 1919–20 the fiasco of Wilsonian political economy was having an immediate impact on America’s European debtors. The abrupt 50 per cent increase in the Federal Reserve’s key interest rates delivered a deflationary shock to the entire world economy. After exporting $292 million of gold in 1919 and billions of dollars in credit, in 1920 new foreign credits dried up. Almost $800 million in gold surged back into the US. To compound this deflationary pressure, between 1918 and 1924 the United States ran a surplus of over $12.6 billion on trade account.
