Staring into the Abyss

In this article, the author compares the current Euro to the Gold Standard in which different country’s currencies are tied to all the other currencies at a fixed rate. In class we discussed how the Gold Standard stopped the US from taking the measures it needed to take to get out of the Great Depression (ie: raising the interest rate). The article suggests that perhaps the Euro is having the same affect on Europe during the current recession. It goes on to argue that in order to recover, some countries might need to break from the Euro. If this happens, however, it will have catastrophic affects on the banks.

http://www.economist.com/node/21536872