• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

  1. Home
  2. Markets
  3. Other

Safes Sold Out in Japan: Customers Hoard Cash in Response to Negative Rates

Safes Sold Out

In a Surprise Move, Japan joined the negative interest rate club on January 29. The Bank of Japan expected the move would force consumers to spend some of their money.

Amusingly, the only sales surge is for safes, a place where the interest rate is always zero, no matter what the central bank fools do.

The Wall Street Journal reports Japanese Seeking a Place to Stash Cash Start Snapping Up Safes.

Look no further than Japan's hardware stores for a worrying new sign that consumers are hoarding cash -- the opposite of what the Bank of Japan had hoped when it recently introduced negative interest rates.

Shimachu Co., which operates a chain of stores selling hardware and home products, said Monday that sales of safes in the week that ended Sunday were 2½ times higher than in the same period a year earlier.

One safe that costs about $700 is now out of stock and won't be available for a month, the chain said.

The core banking unit of Sumitomo Mitsui Financial Group Inc. reduced its ordinary-deposit rate to 0.001% from 0.02%. That means the equivalent of a $1,000 deposit at the bank would bring just a penny a year in interest, which would get wiped out by the fee for a single ATM withdrawal on weekends. That costs about a dollar.

"I am a bit worried about what will happen next," said Kazuo Matsumoto, a customer at one of the Shimachu stores in Tokyo. While he didn't buy a safe, the 64-year-old said he might turn some of his cash into gold and keep it inside a safe-deposit box he rents.


Hoarding Habit

Japan: Banknotes in circulation and Nominal GDP

Cash in circulation has risen with each lowering of interest rates as Japanese savers turned to hoarding cash. Rather than admit the foolishness of their policy central bankers turned to negative rates.

The response by consumers was to turn to safes, not only to avoid negative rates, but also to avoid ATM charges.

As for turning cash into physical gold, Kazuo Matsumoto has precisely the right idea.

 

Back to homepage

Leave a comment

Leave a comment