Germany, 1923: money had lost so much value that they were used as wallpaper.
With the introduction of the near $1 Trillion dollar bailout of Europe, Germans seems to be taking note and are buying large quantities of gold coins.
But there is no indication that Germans are ready to stop buying. Panicked by the possible inflationary implications of this week’s €750bn bail-out, they have been snapping up gold coins and small bars at a faster rate than in the aftermath of the Lehman Brothers bankruptcy…
German investors are notoriously wary about inflation. While few are old enough to remember the hyperinflation that wrecked Germany during the Weimar Republic in the 1920s, the episode remains etched into the national psyche: archive film from the period has been running on the news in recent days.
The appetite for coins has been so intense that shortages are developing. “In the European market there is a shortage of krugerrands,” says Mr Ziegler. As a result, the premium paid for krugerrands in the secondary market has risen from about 2 per cent to 6-8 per cent.
– Jack Farchy, Financial Times (FT.com)
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