Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold

Zero Hedge ^ | 3-28-2014 | Tyler Durden

[blam]

Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold

Tyler Durden
03/28/2014 10:42 -0400

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 ...

(snip)

[coloradan]

It’s unlikely that 100 million people would each buy half a kilo because probably not that many have $20,000 to spare. But it’s also unlikely because doing so would be 50 million kilos, or 50 thousand tons, and there isn’t that much for sale. Ft. Knox is alleged to have only about 8 thousand tons, and there are significant doubts whether it even has that much. The US only managed to deliver 5 tons (not 5 thousand - just 5) to Germany in an entire year.

[BipolarBob]

I seem to remember the authors name from somewhere. Fight Club?

[Beagle8U]

Now that gold is tanking, we will be flooded with ‘world is ending, GUY GOLD!’ articles.

The ads on TV will ramp up too.

Those that control the gold market are in a panic to unload the crap.

[VerySadAmerican]

I heard an ad yesterday (Of course I know the guy is trying to sell) that said gold will hit $2,000 and silver will hit $50 before the year is out. Do any of you agree? Is this a buying opportunity?

[MrB]

Silver’s below $20. I’m thinking some tax return money’s going that direction.

[blam]

Euro Tanks On Spanish Deflation

[Marcella]

I hope they are storing food as food prices will go up with everything else. If you have nothing to eat, a can of beans can equal a gold bar in value.

[spyone]

That was this morning. currently 1.3752, up on the day

[blam]

"Is this a buying opportunity?"

Maybe.

My precious metal holdings are insurance only...not meant to be money-making investments.

[muir_redwoods]

Vitamins D is important to your health. You should get some every day but you can’t make a meal of it and you certainly need other nutrients as well.

Likewise physical metals like gold and silver. Have some. Have enough so it’s a bit hard to move it around but no one needs to hear again about eggs in one basket.

[blam]

"I hope they are storing food as food prices will go up with everything else. If you have nothing to eat, a can of beans can equal a gold bar in value."

I agree.

The Real Inflation Fear - US Food Prices Are Up 19% In 2014

[Vermont Lt]

All of the story posters in ZH are Tyler Durden.

Its kind of “their thing.” The story is not WRITTEN by Durden, just posted by them.

[blam]

"Vitamins D is important to your health."

Agree....I take 10,000 IU daily.

The Antibiotic Vitamin
(Posted here 8 years ago)

[Vermont Lt]

Gold will never hit $2000.

China is crashing. They need liquidity and they will sell gold to get it.

The US is in a bubble. Gold will be sold to get liquidity.

Think about it. If Gold was going to boom, do you think they would be shilling it all of the time? Or would those Gold companies hold onto their gold and sell it later?

Gold will pop up again, and my bet is that it hits $700 before it hits $2,000. We are about to enter a deflationary period, not hyperinflationary.

And before you tell me about the Fed Printing, answer me why the Bank of Japan printed for the past twenty years before we see ANY inflation.

[spyone]

China has been buying like crazy in the last year as their economy has been weakening. Not likely to sell gold. They don’t need it for liquidity. Their central bank creates money like ever other one.

[wally_bert]

Ping for later.

[Atlas Sneezed]

Now that gold is tanking, we will be flooded with ‘world is ending, GUY GOLD!’ articles.

The ads on TV will ramp up too.

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Actually, rising prices usually stimulate demand, and advertising by smart retailers.

[coloradan]

Some of the are written by (a) Tyler. The ones that aren’t have an attribution at the top. Since this one doesn’t, it is one of the ones written by (one of the) Tyler(s).

[Atlas Sneezed]

Is this a buying opportunity?

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If you’re looking to accumulate some precious metals, don’t do it all at one time and try to time the market. Buy some every month. Now is an excellent time to start, even if it continues down before rising again.