Eurozone Crisis, Greece, The Gold Standard and the Mexican Economy

Listeners’ Questions, Peter’s Answers – February 23, 2012

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Trevor from Washington, D.C.
Can you touch upon the role of German central banks in the current Eurozone crisis? I’ve heard people say they’re the ones that recklessly lent money to countries and banks that couldn’t afford to pay back the loans – simply because they would get great returns and the loans would be guaranteed by the ECB.

Haris from Chania, Chania (Greece)
I am from Greece and there is a debate now about leaving the Euro and going back to our old currency, the Drahma. I hear many people saying that going back to the Drahma will make foreign products very expensive for us to buy, while exports will be much more profitable and that will help our economy. This might be true in terms of nominal value, but in reality prices will remain the same. Do you agree?

Justin from Goodlettsville, TN
How exactly is the gold standard supposed to work without a central bank, as Ron Paul wants? Does each bank issue its own receipts for gold or do we still have a national currency regulated by Congress and the Treasury that’s backed by gold?

Brett from Sand Springs, OK
Do you have any test cases I can read about that prove your economic theories are true? I understand your theory on why the economy tanked and agree with most of those points. I would like to see if countries that implement your policies show positive results.

Cesar from Mexico City, Mexico
Your podcasts have dramatically changed the way I had been looking at the economy. Thanks a lot for that! I am just curious: what will happen to Mexico after the dollar collapses?