Bank of Japan's War on Cash: Demand for Safes and Big Denomination Yen Notes Soar! Gold Priced in Yen Surges!

At the outset of the imposition of NIRP,  the average Japanese seem to be vehemently pushing back on the Bank of Japan’s (BoJ) attempts to shanghai their resources.

First, the imposition of NIRP has only caused fissures in the establishment. This can be seen in mainstream media, as well as in the reactions of several politicians to the BoJ

According to Fidelity/DJ Business News (February 18)

A clash Thursday between Japan's central-bank chief and lawmakers highlighted the downside of negative interest rates: They are making the Japanese public feel negative.

Bank of Japan Gov. Haruhiko Kuroda, who announced the nation's first move into minus rates three weeks ago, found himself dodging a concerted attack in Parliament from lawmakers who charged the policy was victimizing consumers and sending a message of despair.

Next, in anticipation of non bank savings, sales of safes (and safety boxes) have suddenly boomed!

From Fortune.com (February 23, 2016)

Negative interest rates mean customers effectively pay a fee for parking cash in banks, so Japanese citizens are beginning to hoard yen, according to the Wall Street Journal, and they need somewhere to put it.

Sales of safes have doubled from the same period a year earlier at chain hardware store, Shimachu, according to theJournal. The chain has already sold out of one model worth $700. Others savers are considering more unconventional storage spaces.

“In response to negative interest rates, there are elderly people who’re thinking of keeping their money under a mattress,” Mariko Shimokawa, a Shimachu saleswoman told the Journal.

Third, real cash demand has spiked as exhibited by zooming demand for the yen's big notes!

From Bloomberg (February 24, 2016)

Demand for 10,000-yen bills is steadily rising in Japan, even as the nation’s population falls and the use of credit cards and other forms of electronic payment increases.

While more cash might sound like a good thing, some economists are concerned that it shows Japanese households are squirreling away money at home instead of investing it or putting it into bank accounts -- where it can make its way back into the financial system and be put to productive use.

That’s a big problem for Prime Minister Shinzo Abe and his central bank chief, Haruhiko Kuroda, as they try to spur consumption and reflate the stuttering economy.

The mountain of cash in Japan amounts to almost 100 trillion yen ($890 billion), equivalent to about a fifth of the size of the economy. And last year the number of 10,000-yen notes, the biggest bill, increased by 6.2 percent, the largest jump since 2002.

Increased demand for big note cash has likewise surfaced in Europe.

Lastly, gold prices in yen has likewise surged.

Despite the recent correction in the prices of gold based on USD, the yen price of gold continues upward as shown in the chart from the World Gold Council.

Perhaps my observation is being incrementally affirmed

Coupled with growing ban on cash by governments mostly under NIRP, the likelihood of imposition of myriad capital controls, prospective bail-ins or deposit haircuts on troubled banks, and or even perhaps outright protectionism, probably gold senses a massive disruption in the banking system, and the large scale drying up of global liquidity as the public gravitate towards cash with gold functioning as an alternative medium of exchange.

Confiscations of private sector resources to finance desperate bankrupt governments will likely deepen. From zero bound, to zero to negative and to the war on cash, as well as, to various capital, transactional and people controls, these shows of the slippery slope of the government's thrust.  So it won't take long, when governments will likely expand their prohibitions or increased regulations to include safes and safety boxes and gold ownership. Add guns to it. Yes people will need guns to protect their home based savings.