Morning, Ole!
Well, we KNOW they're not gonna spend it! Actually, if they did, it might help Japan out of their trap, but the thrifty Japanese aren't likely to quit being thrifty anytime soon.
Given the bank tremors and the dropping insurance cap, any Japanese saver has to be looking at alternatives, both for existing and ongoing savings. Physical gold is an obvious candidate, but that's an uninsured investment as well. There's a certain insecurity involved in leaving physical gold under the tatami mat while you go out for some sushi.
Trusting the gold to a depository (financial institution) can't seem too attractive, if your expectation is that several or many of them are just about to fail.
What I'd like to know is whether there are readily available parking places other than Japanese financial institutions. For example, could a Japanese investor place funds in a (perceived-safer) American or Swiss institution with a branch in Japan, such as CreditSuisse or Bank of America? The investor assumption would be that the deposits would still be standing amid the Japanese bank rubble.
My working hypothesis (readily subject to correction) is that there will be some movement into gold by the small investor in the near term, which we are seeing already, but the ongoing bigger picture will be flight into non-Japanese FINANCIAL investments.
So I don't expect the 4/1 regulation change to be a massive event in the history of gold, just a welcome minor one. Time will tell.
John |
