The ultimate problem with the gold standard is that it’s reliant on the price of an outside resource to control the value of the currency. While this does mean that theoretically, you can only print so much money (not that this stopped early US governments from running free with their bonds), it also means the money you do print is tied directly to the supply and scarcity of the metal backing your currency.
So, when say, some ragged band of heavily armed adventurers finds themselves in possession of several mountains filled with that metal, and then proceeds to dump it into the world economy, you have a major problem. This was one of the reasons the Ming Dynasty collapsed.
Fiat currencies, on the other hand, are ultimately backed by the legitimacy of the state that issues them. As legitimacy is backed primarily by a state’s monopoly on the legitimate use of force, institutions like the Federal Reserve exist mostly because most people in the First World aren’t comfortable with the idea that their money is backed by the ability of the issuing party to commit violence on them and their loved ones until they agree to value that currency at the state-sanctioned rate. This means it’s easier for the currency to remain stable, even in times of massive spending.
Frankly, what this means is that if Tierra had a fiat currency instead of being on the bimetallic standard (with the primary sources of both metals in that system controlled by foreign powers), it wouldn’t be in anywhere near as perilous a financial situation as it’s in.