Thanks to Ben Bernanke's lecture today, the gold standard is back as a topic for debate.

While it's easy to talk about the endless crises under the gold standard days of the 1800s, the truth is that we don't have to go back that far at all.

Europe is a close analogue to a gold standard.

Remember, each European country lacks the ability to print their own money.

All the European countries have a fixed 1-to-1 exchange rate, with no ability to devalue their currencies to correct trade imbalances.

The currency is designed to keep governments accountable, acting as a check on uncontrollable spending.

Countries have to raise through taxation or the bond market a certain amount of Euros each year to spend.

Bottom line, it's a hard money scheme in sheep's clothing.

And in fact, the crisis is almost exactly as Bernanke described.

Countries are vulnerable to the whims of speculators.

At the worst possible time for the economy, interest rates are rising.

When things were good, rates got artificially low for places like Greece and Italy, creating a bubble.

The policies of one country end up hurting other countries. So for example, German anti-inflation policies end up doing damage to Greece.

And oh yeah, major bank failures and seemingly endless panic.

Things have calmed down a bit, thanks to the ECB getting a bit more fiat-ish in its approach to money. But if you want to see what it's like when you have a hard, unprintable currency that's designed to keep governments in check, you can just look at the Europe crisis.