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Japan's savers won't play ball as BOJ turns negative

6 Comments
By Minami Funakoshi and Taiga Uranaka

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6 Comments
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The Japanese never did educate themselves on how to invest. With no inflation savings stay basically as you deposited. Yet, they will also never gain any growth. You have to invest your money, as the days of 3 or even 5% rates at the bank are long gone. Basically have 6 months of money on hand, and the rest in stocks, and if you are older, some bonds as well.

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The stock market might stay elevated if they can manage negive interest rates worldwide, and pretend that everything is just fine while the world enters a world wide depression as evidenced by the Baltic Dry Indext and dropping oil prices. Problem is, whatever fiat currency you have, will be worth less everyday as measured against the oldest, most honest currency in the history of man kind for over 5,000 years: GOLD

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The Bank of Japan (BOJ) hopes that cutting interest rates below zero will boost spending and investment, but fear, inertia and years of paltry returns mean the nation’s army of savers is unlikely to march to the central bank’s tune.

I've seen increasing numbers of critical comments recently, to the tune of the central banks not being able to do everything for the good of the overall economy.

The empirical evidence of these central bank policies failing to produce the intended outcomes suggests that it is the governments that need to enact pro-growth policies. No one can complain that money is not cheap enough.

“I’m scared to keep money under the mattress,” she said. “But I don’t know about investing, either, since there’s no knowing how stocks will move.”

Wise to avoid Japanese stocks, which are still miles below their all-time highs, even after the Abenomics rally. But people like that ought to consider foreign stocks (which do actually increase in value over long periods of time) as a viable alternative, as well as various other possibilities. Just because one lives in Japan does not mean one's money needs also to be tied to its fortunes.

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Much better than the promissory notes is the time-tested store of wealth: gold and silver, the physical variety. The current prices are low (artificially) but the premiums are high.

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I don't blame people for not investing... I certainly wouldn't. I like to see something for my money, not some banker type rubbing his hands with glee as I hand over my dosh to lose it all in weeks or even days.

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@thunderbird2, I hope you reconsider. Depending on your age and time scale, investing in stocks, or a blend of stocks and bonds, is basically the closest thing to a "sure fire" way to become richer in the future we know of. The Bogleheads website is a good place to get started.

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