Complex sentence: The FED would have had to execute an expansionary monetary policy to fight the deflation and to inject liquidity into the banking system to prevent it from crumbling--but lower interest rates would have led to an gold outflow.
Split into simpler sentences: The FED would have had to execute an expansionary monetary policy to fight the deflation and to inject liquidity into the banking system in order to prevent it from crumbling. But lower interest rates would have led to an gold outflow.