Once US dollars ceased to be convertible into gold at the beginning of the 1970s, there was no longer any constraint on the amount of dollar-denominated debt that could be created by the Federal Reserve system or the Treasury Department, or, for that matter, the private sector. For the next decade, fear of inflation and the Fed’s still relatively tight control over the financial sector kept credit growth relatively constrained. Beginning in the early 1980s, however, a flood of imports into the United States began to profoundly affect the economy. By circumventing many of the domestic bottlenecks that had caused high rates of inflation, this influx kept prices in check. It also quickly created a large trade deficit that was funded by foreign capital inflows. Those inflows loosened credit conditions in the United States. As those changes were taking place, the deregulation of the banking industry was significantly reducing the Fed’s control over credit creation. When imports continued to surge, the stage was set for an explosion of credit creation.