German Fears About Inflation Stall Bold Steps in Debt Crisis

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BERLIN — Norbert Schulze was not yet born when the hyperinflation of the 1920s deeply scarred the German psyche. But he still remembers the Reichsmark notes denominated in millions and billions that years later were tucked into a box with the family’s old black-and-white photographs.

Now, Mr. Schulze, a 56-year-old auto mechanic, says runaway inflation looms again, threatening to decimate his savings and turn his carefully planned retirement into abject poverty. It is not so much the ghost of the 1920s that he fears, but the vocal demands around Europe and abroad for a “big bazooka” of public money to reassure markets and help European countries in heavy debt.

“I’m worried about my pension and my savings and the problems we’re facing right now,” Mr. Schulze said.

Many economists say aggressive purchases of the sovereign bonds of heavily indebted states by the European Central Bank are the quickest and surest path to stabilizing the crisis. On Thursday, Mario Draghi, the bank’s president, laid the groundwork for bolder intervention in markets if certain conditions were met.

http://www.nytimes.com/2011/12/02/world/europe/haunted-by-20s-hyperinflation-germans-balk-at-euro-aid.html?nl=todaysheadlines&emc=tha22