The political effects of monetary strangulation never fails to show up. That was the case during the 1930s and that is the case today.
The European political news over the weekend: Socialist Francois Hollande won the second round of the French presidential elections on an anti-austerity platform and in Greece the mainstream political parties took a major beating with extremist parties doing extremely well in yesterday’s Greek parliament vote.
The radical-leftist grouping Syriza is now the second largest party in the Greek parliament with 16.7% of the vote. The effectively neo-nazi party Golden Dawn Party won 7% and will now for the first time be represented in the Greek parliament. (I dare you to have a look at Golden Dawn’s logo…scary)
It does not exactly look like the “reform-through-tight-money” policy is working…just have a look at the European markets today…
PS The outcome of the French presidential election reminded me of what happened in France during the Great Depression. If you are interested in that topic you should have a look at Clark Johnson’s classic “Gold, France and the Great Depression”.