Friday, December 3, 2010

De Madrid al cielo

Spanish air traffic control is currently in the hands of the military and most of the air space shut after the AENA employees walked out.

In case anyone had any illusions that people will grind away at paying off the bankers' debts in euros for the next 10 years, this should remind them that sound money presupposes social order. People will put up with a lot, but if pushed too far strikes, protests and civil disobedience can bring down governments and reverse policy. So maybe Eichengreen is right after all (except for the US...) - democracy and liquidationism don't mix.
And the US is probably less an exception than it appears if we take the Republican success in the mid-terms as a simple expression of voter anger and frustration, rather than an unlikely preference for deflation. So there's going to be more of this.