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Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold
As we reported yesterday, the world's most clueless prime minister, Japan's Shinzo Abe, has suddenly found himself in a "no way out" situation, with inflation for most items suddenly soaring (courtesy of exported deflation slamming Europe), without a matched increase in wages as reflected in the "surprising" tumble in household spending, which dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan's infamous sales tax hike. How does one explain this unwillingness by the public to buy worthless trinkets and non-durable goods and services ahead of an imminent price surge? Simple - while the government may have no options now, the same can not be said of its citizens who have lived next to China long enough to know precisely what to do when faced with runaway inflation, and enjoying the added benefit of a collapsing curency courtesy of Kuroda's "wealth effect." That something is to buy gold, of course, lots of it.
According to the FT, "Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."
Of course, while the Japanese consumers know what is the best defense against runaway inflation and purchasing power destruction, the government also knows that just like in India, where massive gold imports to satisfy local demand so skewed the current account deficit that India spent most of 2013 imposing gold capital controls, it simply needs to make gold purchases impossible in order to redirect spending into more Keynes-approved products and services.
However, for now Japan is happy just to crush its population's meager disposable income with soaring energy prices. Which also means the locals can allocate their personal capital in the most efficient way: one which discounts a very unpleasant future.
Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics." “To protect the value of wealth, gold comes into play as an inflation hedge, and if the economy goes back to deflationary circumstances then, again, money seeking safe havens would flow into gold.”
Wait, did someone in Japan finally admit the inevitable, i.e., that Abenomics will crash and burn in a pyre of runaway inflation and a crashing economy? Well, good. The problem is that when that moment happens, the response to the government's "all in" bet to led its population into the slaughter will mean that one will need lead far more than gold.
But we'll cross that bridge when we get to it. For now, we eagerly look forward to yet another major buyer of gold emerging on the global landscape, alongside China, India, and all other countries not transfixed by the dulcet tunes of central-planning and nominal paper profits.
Japan’s hunger for gold bars is at odds with general sentiment towards the precious metal, the price of which fell 28 per cent last year, bring an end to a 12 year bull run. Yet Yuichi “Bruce” Ikemizu, head of commodities trading at Standard Bank in Tokyo, said retail buyers had been tempted into purchases by lower prices.
The Fruit of Gold ETF managed by Mitsubishi UFJ Trust and Banking, the country’s most popular bullion-backed investment vehicle, saw its assets rise from 5.6 tonnes, when Mr Abe assumed power in December 2012, to 6.9 tonnes now – even as the US dollar price of gold fell by more than a fifth over that period.
Individual investors in the fund numbered 15,243 in mid-January, a sharp increase from 9,849 a year earlier, said general manager Osamu Hoshi.
At Tanaka’s third-floor store in Ginza, one 33-year trader at a foreign-owned brokerage, who did not want to be named, said the tax increase represented a “good opportunity” to buy more gold as he was worried about holding too many yen-denominated assets.
“I plan to hold it for a long time until there is a good time to sell when the yen collapses or something,” he said.
Even a strong rise in Japanese gold purchases is unlikely to affect the global bullion market. Last year consumer demand in Japan was 21.3 tonnes, according to the World Gold Council, compared to 1,066 tonnes in China and 975 tonnes in India.
Unlikely? Really - lets see what happens when 100 million Japanese suddenly decie half a kilo of gold is precisely what the doctor ordered. Then again, this is the FT, the same media outlet that recently, and inexplicably, pulled an article discussing gold manipulation without any explanation.
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I suppose I could list all the logical fallacies in that post. But it isn't really a debate. I take more from your tone than your content anyway. You clearly don't like this article for some reason. Why do you personally dislike this article so much? Is the the 500% sales increase or the unexpected demand surprise? Or perhaps you thought the yen would increase in value due to abenomics or crushing debt loads?
Oh reeeeeeeeeeallly. By all means. Please do. No wait. Let me do a bit of prognostication all my own... cute one-liner putdown right? There. Saved you the trouble.
Tell you what Romulus. Or is it Remus. You go ahead and you make your investment decisions based on breathless ZH anecdotes about record breaking gold sales at Ginza stores. 50,000%!!!!!!! Most evuhrest since Genji Monogatari was first printed. LMFAO.
I was actually at the Chow Tai Fook stores in Causeway Bay where the fabled gold runs were breathlessly reported on these very pages... and 2 days after all those frightening pictures of emptied racks... the racks were fully stacked and not quite so many mainland peasants as the previous few days. Oh shit, logical fallacy again. Dang.
If I want mindless hysteria in my news, I'll just flip on the flatscreen and listen to the freeze-dried moron brigade. I thought ZH could do better.
But apparently questioning the set paradigm is a logical fallacy. LMFAO. Continue sucking those doggie teets while you enjoy your bread and circusses.
First logical fallacy is that you are putting words in my mouth. I believe that is straw man.
Attacking me instead of the data. Ad Hominem.
False Attribution, is you referring to yourself as a factual source on the substance of the data.
Moral High Ground Fallacy, it means you are acting like an arrogant ass to prove your point.
Incomplete Comparison, you saying that because you went tto a train station or a gold vendor once, you are an expert.
I could go on. But this is not a debate. Why does this data make you so angry? Are you upset about the Yen going through the floor, or all the gold buying that was not supposed to happen? Clearly every time I repeat a fact cited in this article, you become irate. Are you saying the gold sales figures being reported are false?
You can buy all the PM you want on the data, but it will still be squashed by paper manipulation. Paper gold is limitless.
First logical fallacy is that you are putting words in my mouth. I believe that is straw man.
Get real. You have wolf tits in your mouth. I don't see how words could possibly slip by those fangs of yours.
Attacking me instead of the data. Ad Hominem.
Hey, and it's cool cause it's latin. I get it. But you know what, one good turn deserves another. And I addressed the data. The "data" as you so verbosely put it is... how to say.... anecdotal.
False Attribution, is you referring to yourself as a factual source on the substance of the data.
Yeah homie, I'm a factual source of my own opinion. You don't like my post, those are your issues. Not mine.
Moral High Ground Fallacy, it means you are acting like an arrogant ass to prove your point.
Well, thank Zeus you're not, eh.
Incomplete Comparison, you saying that because you went tto a train station or a gold vendor once, you are an expert.
I went into a train station? Or a gold vendor? Once? I did? And then I said that too? And then I said I was an expert? I said that? Lemme check that… gold vending machines… Ginza isn't representative of Japan… filthy rich clueless motherfuckers…. hmm… nope… missed it. Shit. My dyslexia is wreaking havoc again…
I could go on.
I know right? The non-debate debate thing.
No one in their right mind would hold this retarded spike in usd/jpy over the weekend, with all the crap going on with Russia and China for starters. I suspect it will retrace back down in the near future.
Gold confiscation in 3...2...
"Abe, your Seppuku will see you now."
.... but but but they could hold it in their hands.
The smart ones are lining up for gold the sheep are buying U.S. equities right now.
the only way to stop private individuals from exchanging fiat money for gold bars ( a thought which sends every central banker into a swoon, is to artifically manage the price higher) yes ducklings, gold prices are manipulated (HIGHER) in order to make this painful exchange less desirable. the holder of fiat based currency pays seignorage, (i would call them clients of the central banks, so in fact the central banks do have retail customers, which means you and i have some rights as consumers, the right not to have our currency debased through inflation) whenever the price of gold drops, the supply of gold disappears and people line up to buy it. so if you thought you were going to wait until the market crashes and then buy gold forget it, and if you buy now and the market crashes the price will crash along with the market, gold will be $35 and there will be none.
Oh fer Pete's sake! Now you've done it! I've got this throbbing stiffie!
I beg to differ.
They used to push and hold it down, but they lost control, so now they are using the "whipsaw" method.
They take short positions, push it down, and then take long positions. push, or at least allow, it to go up again.
That just about destroys anyone that is "investing" or is a middleman.
Of course, one of the "costs" of this is that gold is undervalued and flowing overseas to Asia, China and Russia.
The carry trade becomes less useful when the whole world is racing to the bottom. Abe was lulled into believing their was no cost to those actions.
Abe is a few months/year ahead of the US
Nah, I think we are at least 5+ years away from that. I used to think it would happen within a year, but then it hadn't happened. This occurred a couple times, and I think this will wobble along a lot longer than most people here thing. Sure, we could have a market correction of 30-40% again, but the central planners will find a way to muddle along again. Japan spends something like 25% of its revenue on interest on their debt, we have a ways to go before that happens. We also aren't at the point where our central bank is monetizing pretty much everything yet. We are where Japan was maybe 7 or 8 years ago (I'm generalizing). And most people are clueless about gold or silver. So, as this becomes the first fiat domino to fall(maybe), which makes the USD look like the cleanest dirty shirt again, allowing the dollar debt Ponzi to middle along a couple more years.
Gold now slipping into the London fixing.... really... who is surprised by this?
The thing that upsets me the most when it comes to Europeans is that somewhere on the horizon lurks things like bail-ins and other wealth associated taxes/new forms of government thefts. And the horizon is not hard to see, it's right in front of you, no glasses are needed.
Gold is therefore a fabulous asset to own because not only does the future look bright for the metal (timing as ever hard to predict) but it's an asset which has an inbuilt function to suddenly be able to disappear off the State's financial radar.
Cyprus was a classic example of this. Pre the crisis the Gold shops weren't selling much, just a few 'crazy' old gold bugs no doubt adding to their stacks. Then post crisis almost everyone wanted to buy Gold but it was too late.
I fear the same thing is going to happen to the Europeans (Europe will blow sooner than the US). All I can say is that the market gave you every chance to buy, fuck it even got cheaper and you still did nothing...
We've been bailing in here in the USSA for a long time. What the hell do you think the ZIRP and taxpayer bails were all about?
The more bullshit reports you post about Chinese/Japanese/Russian physical gold demand the more desperate you sound.
Truth in fact. The fact is that the price of the rock is falling because it has no value beyond that of jewellery. I called the top at $1800 per oz and told you all it was headed back down a reasonable margin on the cost of production, roughly $1100 per oz.
Now, wake the fuck up zombies.
Would you have reminded us of your call if the Gold was now at $2,000 or more?
Calling tops and bottoms is a 'vanity trade', it has nothing to do with making money because one will be wrong more than right. So what markets are you now calling for a top/bottom because the odds are with me if I copper that trade (coppering = going the other way).
OK, What is your 6 month target on this no value metal you speak of?
$1000-$1100 per oz.
G-U-T-S,,, guts!!!!! I like that
That price is possible, but in the end it won't be that way. I'll give you $1K for every ounce of gold you have.
Hey, thorgodof thunder, it is clear you don't read, don't think, and as your chosen moniker suggests, you are full of hot air.
It's QE that has given the FED the ability to beat the price down. When the $US. fails....I don't want to have to liqidate my savings at pennies on the Dollar because I can't pay my taxes.
Thortgodoffarts.......are you being paid as a Shill?
They'll neve get laid buying gold. Women prefer men with many bonds.
with the GSR at 65+ they should be buying silver
We're going to have more cash as soon as the court case against Visa and Mastercard is resolved. Those bastards are skimming 4% off the top.
PS. If the case fails we can apply for a new Masterbanski card.
Gold bitchez
Where are ZHers transacting now? Used Tulving at avg/toz 1050 few years ago. Lost it in obligatory boating accident.
Which other vendors have reasonable price/selection/turn around time?
Does anyone else have low premiums for size?
FYI Tulving went bankrupt this month along with untold millions of unshipped orders for physical. Mega story that is largely unreported.
Dude, I like the service I get from APMEX. They have never let me down. I put in an order today, and I'll have it in one week at normal USPS delivery. When I need cash, I've never used them as a local coin shop gives me an okay deal (not great, mind you, but ok). The local shop is always suprised when I bring in some bullion, but he says it's sold again later that day so he likes it. If I had the time to insure/ship it to APMEX I'd probably go that route, but I don't have much in quantity, so I try to keep most of it close.
Plenty of physical available for under $1300 w/price dropping significantly this week.
Then give Germany's back.
Germany will just have to settle for paper gold.
Weak nations can make no demands.
I know but I have no complaint with Hannes. What other vendor is reasonable in your opinion?
My boating skills suck.
Nothing beats a local coin shop that you can transact with in cash, and will remember you as a repeat customer. At mine, I am able to get a 10 oz silver bar for 227, an ounce of gold is about 1330-1345, depending on what type. At least it was a couple days ago. It's usually within 2-3 %+/- somewhere like silvertowne or apmex. I just prefer the face to face purchase, plus it's cas and carry, no waiting for delivery.
Governments try to print their way out of debt problems causing inflation, and the people combat this by not spending money on anything that is not a life neccesity causing deflation. Does that sound about right?
i dont know, seems to me their first mistake is printing money, and after that they try to cover their mistake with debt, if you issue money and the money is used to complete a transaction the money is technically worthless once both parties are satisfied (all debts public and PRIVATE it says) but instead of retiring the debt, the money is transferred to a another person. if we had a transaction only currency there would be no debt the currency would eliminate it. (bitcoin?) so you see gold and silver backed currency were wrong in the first place, and currency should not be a store of value( which gold and silver are, you use currency to BUY gold and silver which people are starting to figure out now, and once currency is no longer debt the fed disappears, along with monetary inflation and governments program of inflating assets to mimic progress.
So many countries are ramping up gold purchases, yet cost sags. Retail in India. China. Japan. Vaults in Singapore. CB's in Iraq. Russia. Coins in US. Australia. Canada. Moar is less. We need sellers to get the price up?
Silly, you are correct. Tell all those sellers to contact me and I'll middleman it to the chinese, Indians, and the Japanese.
In case you haven't seen this one yet, Jim Rikards says something really great about the manipulators here:
http://www.sprottmoney.com/news/ask-the-expert-james-rickards-march-2014Someone somewhere must btfd.
Printed gold for printed Yen
There you go again, Tyler. Now a jewelry stall owner is a Precious Metals Specialist and the most popular PM in modern history is a failure. You really should get out (to Tokyo) more often.
I'm gonna go watch Sumo instead: http://japan2usa.wordpress.com/2014/03/23/lets-you-and-him-fight/
Why isn't there Chick Sumo? Er...
Dude.
The same dummies that exported 90% of their bubble-era physical gold to China over the past five years... are now... buying... it back.
Is this not a CONTRARIAN indicator? : "[P]eople queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."
kind of hard to imagine that
"....busiest month in Tanaka’s 120-year history."
wouldn't building owners in 1944 Tokyo et al want to get into, well, dam near anything else?
In gold we trust.
In gold they trust.
In gold every sane individual trusts.