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.
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.
Mike “Mish” Shedlock
Central bankers have to be the world’s biggest fools if they did not expect savers to take their money out of banks with negative interest rates. Heads up, Fed, after the example provided by Japan you cannot claim that “unintended consequence” was unforeseeable.
Ron J said:
“Heads up, Fed, after the example provided by Japan you cannot claim that “unintended consequence” was unforeseeable.”
Which is why Summers called for the elimination of the $100 bill and $50 bill for that matter. 100 dollar bills apparently account for over 75% of the currency. It makes it more difficult for a large number of people to hoard cash, if it isn’t available.
Then, they are going to have to hurry. The FED, and IRS, etc. need to eliminate the $100, and possibly the $50 now, before the people begin the withdraw.
In addition, if the people get wind of all this, and really do take cash out, then this will just make it more difficult to have a “cashless” society. At some point, the FED will have the Government make all currency illegal.
Illegal Tender. Not valid for any debt public or private.
Then the gov forces you to take the mark of the BEAST (Bank Electronic Assess Secured Transactions).
“As for turning cash into physical gold, Kazuo Matsumoto has precisely the right idea.”
Exactly. And you don’t need a stupid safe, either. Gold doesn’t rust, burn, rot, or tear. Bury it in cement under your driveway. Build it into a house wall. This is a no-brainer.
“Bury it in cement under your driveway. ”
Where is your driveway? And which wall?
Uhhh…it’s in…..Japan….yeah, that’s it….Japan! Long story……
Tony Bennett said:
Not so fast.
At best I’ll give you a “maybe”… and personally, I wouldn’t make the trade.
You all are forgetting the FX component. Yen currently about 113 to the $US. As yen carry trade unwinds I expect yen to strengthen (100 yen to $US, at least, is my call). Gold may go up in $US terms but down in yen. Don’t believe me? Go to the bottom of this page to box that has “live gold prices”. Past year (at 3:50 pm) gold +0.51% in $US, but -4.76% in yen.
Gold is not for trading. The Yen may strengthen temporarily (and Gold priced in Yen may decline slightly) as various carry trades unwind, but over the intermediate and longer term it may be the first of the major currencies to violently (and suddenly) collapse.
Again to re-iterate, Gold is not for trading. A certain type of “Sardines” are used for that purpose.
Tony Bennett said:
In my book, gold just another asset … that goes up and down in price.
And if I can buy it a year from now cheaper, why on earth would I buy NOW?
It is a Fiat World, Baby!
Not only will the yen not collapse anytime soon … the yen shorts will be BURNED.
Old Guy said:
SD I happen to like gold myself. The simple answer is the USA and other governments will outlaw the holding of gold. The bankers are doing their bet to eliminate higher denominated bills because of this. I like you would buy tangible assets including gold.
After a decade or more of watching western gold flow into the Far East, I wonder where they are still getting the gold to cover the transfers. Wars in the middle east will not cover the transfers. So I wonder how much we actually have left.
There is a reason many countries are transferring their gold out of the USA, France and Great Britain, the central governments in these countries can declare a state of emergency during war and just confiscate it all.
Get it out while you still can hehehe.
I suspect you’ll agree, gold will retain its value regardless of whether some technocrat says declares it “illegal”. I think that’s one of its greatest virtues.
Old Guy said:
SD agree 100% I still hold gold I bought at 250 an ounce. Ack letting my age out there!!! I have bought and sold gold for over 40 years and not the paper gold. The reason gold is going up now is investors are piling in the paper market. I do physical only and I can hold that in my hand, pass it on to my children without taxes.
I am not a gold bug and tell my friends who think the world is going to have a total breakdown so they buy gold. I pissed them off by telling them gold will not be worth squat if your starving and need a sack of potatoes. So I also own a farm!!!
Buying gold may be a good idea; however, storing it in a safe deposit box in the bank is an absolutely horrible idea. As banks are declared insolvent, they will take what is in safe deposit boxes without asking. If the BOJ declares a bank holiday, then people with safe deposit boxes will be denied access to their possessions.
The rule is: if you buy gold because you don’t trust banks with your money, then don’t trust them with your gold either.
Unless the safes are free, the notion that the cost of storing currency is zero has technical problems. also, unless the safe is fireproof, there will be a randomly distributed high interest rate.
Michael Griffith said:
The safe provides utility outside of banking such as storing jewelry and PMs and safeguarding handguns from children and thieves.
MOst safes I’ve seen are fireproof and you can always get a cheap firebox and secure it in the safe.
Of course every lowered interest rate freed up more individual income….just not (and never) enough to actually effect an equilibrium of total costs/prices and total individual incomes actually available to spend and so liquidate those costs/prices. And there goes Austrian and Keynesian economics into the dust bin of history…and the rise of Wisdomics/Gracenomics.
Perhaps the Japanese should look at some of the locksmith videos on YouTube to see just how unsafe their safes really are. Any safe you can buy at a consumer store can be opened in seconds by somebody with simple skills, and a magnet or a hammer.
That’s precisely why you shouldn’t use (and don’t need) a safe.
Well, you are so right.
This is why I have no locks on my house, my car nor my business buildings. Anybody can bust these pathetic locks, so don’t bother locking it up.
Same with Gold or Money. Just put it in a drawer in the kitchen. Anybody can break in. One is only fooling themselves with “locks” and safes, etc. Buying a safe, as you say, is not going to do anything to make you safer.
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I also feel that a SAFE is a magnet for thieves and it may not be safe to hold it at home. That is why I thought a most likely business would be a SAFE chain that just holds cash for you and it may charge less than the prevailing NIRP. But still savers are out of capital to that extent. MY problem is even this destroys capital and I do not think that anything that destroys capital can ever be a good idea. What does it take for a CB to understand this simple concept?
SAFE business would soon be the game in town!
The Banks are saying your money will be worth more staying with you. They will charge you a fee, thus you will have LESS money later. Along with this, prices are going down for most everything, once you have a home, so keep it at home and you win.
I wonder what is going to happen if the Government outlaws safes. Especially large assault safes. Who needs a large capacity safe? They are used by drug dealers, smugglers and red-necks who cling to their Bibles. Nobody needs a 30 round, I mean sq. ft., safe.
Also, are they doing back-ground checks on Safe Purchases? What if a known felon or drug dealer is buying one? Obviously it is for crime and violence. And, if you have a safe, then you are just increasing your chances of a home invasion or robbery by having a safe in your home. Homes without safes are, well, safer. And if you have small children, they can play with the safe and die. Every safe needs a child lock.
Nobody needs a safe. The government will take care of you (A former Chancellor of Germany promised that). We have safe Banks to store your money. We have safe Government Bonds, back by the Full Faith and Credit of countries. You money is sound. Sound as a Dollar.
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