The Wall Street Journal reports safe sales are up 250% over last year at Japanese hardware company Shimachu. One $700 model is sold out throughout the entire country.
Regular Daily readers know what’s spurring the safe frenzy: negative interest rates.
The Bank of Japan (BOJ) lowered interest rates into negative territory on January 29. It hoped negative rates in banking accounts would force citizens to invest in riskier assets with a higher yield.
But the opposite happened…
The chart below (left side) shows the amount of physical paper-yen banknotes in circulation.
Paper-yen numbers have risen since Japan first slashed interest rates in the late ’90s. They’ve tripled since 1995, relative to the Japanese economy (right side).
Japanese interest rates are now so low, a depositor would earn only 1 cent in annual interest for every $1,000 in the bank.
So the Japanese have taken to “hoarding” cash (and often gold)…
We don’t blame the Japanese for putting their money under the mattress or into fancy new safes. If they’re not going to earn interest at the bank… at least they can have “24/7” control over their own money.
It’s a logical response to the lunacy of negative interest rate policy.
Bottom line: If you haven’t taken some money out of the banking system yet, do it now. Tom suggests holding up to $10,000 in cash. He recommends his favorite safe ways to store physical cash right here.