• 1 hour Is A Gold Breakout Near?
  • 19 hours Federal Reserve Downgrades U.S. Growth And Cuts Rate Hikes
  • 22 hours Disney Beats Out Comcast In $71.3B Mega-Merger
  • 1 day The Feds Continue To Prop Up Equities Markets
  • 1 day Bejing's Sway In South China Sea Is Fading
  • 2 days Saudis Eye Billions As Stocks Get Emerging Market Boost
  • 2 days Airbnb In Acquisition Mode Ahead Of IPO
  • 2 days Gold Hangs At $1,300 Ahead Of Fed Meeting
  • 2 days Champagne Sales Slow As European Economic Worries Grow Louder
  • 3 days Putin Signs “Digital Iron Curtain” Into Law
  • 3 days Russian Metals Magnate Sues U.S. Over Sanctions
  • 3 days Tesla Looks To Jump Into Indian Market
  • 3 days Global Banks Lay Groundwork To Re-Inflate Asset Prices
  • 4 days Homeowners Experiment With Risky New Investment Trend
  • 4 days U.S. Tech Stocks Look Increasingly Vulnerable
  • 4 days De Beers To Expand World’s Most Profitable Diamond Mine
  • 4 days Ford CEO Gets Raise After Massive Layoff Round
  • 5 days Germany’s Flirtation With Recession Could Cripple The Global Economy
  • 5 days Where To Look As Gold Miners Inch Higher
  • 6 days Google Faces Billions In Fines From European Regulators
Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

The Chatroom Cartel Running Global Bond Markets

The Chatroom Cartel Running Global Bond Markets

Eight major banks have been…

  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