"...nation's impulse to inflate had been the gold standard, under which inflating prices attracted imports, which were paid for in gold shipments, thus ... depressing prices, nipping the inflationary cycle in the bud."

I don't get what this means.

Especially, the part about depressing prices, nipping the inflationary cycle in the bud. But, before it stated that it inflated prices. Does it mean the prices of American goods that were not inflated?