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In recent years, the yen has performed very abnormally. Everything has to start with the yen bill in the trash. In 2016, the Japanese people dumped 17.7 billion yen in cash in the trash, which does not include the part that was disposed of as garbage. In fact, since the new century, the Japanese have often been able to pick up bundles of bills from the trash can. The incredible phenomenon tells the sad fact that many Japanese people no longer trust banks or financial institutions. They would rather sacrifice the rate of return and hold the money in their hands.

double-killing stocks, lack of investment channels

In addition to saving money into the bank to eat interest, the investment areas that ordinary people can directly participate in are nothing more than the stock market, the bond market and the property market. Among them, real estate is half of the private asset allocation.

Forty years after the war, Japanese manufacturing industry was booming, the economy was rising rapidly, and all citizens enjoyed the dividends brought about by industrialization. Many companies have invested heavily in high-end hotels to open annual conferences, so Ginza often needs to queue up six months in advance. Even in the most sluggish industries, employees can earn half a year’s salary as a bonus.

Having earned so much money, people first thought of buying a house to buy land and letting the fruits of labor settle down. Indeed, real estate is an important warehouse for storing assets. Because new technologies can emerge in an endless stream, the patent shelf life is limited, and the same technology can be shared by producers all over the world; on the contrary, the land resources on the earth cannot be added, but a piece of land can only cover a factory or a building, which is more in line with “ Rare” economics concept. As social productivity continues to rise, real estate prices are bound to rise. Therefore, from university professors to senior engineers, buyers of land and land are everywhere.

After the square agreement, the yen gradually strengthened, the JapaneseAnd the foreign exchange market is a mess. Japan’s big banks’ profits fell by 8%, local banks’ profits fell by 15%, Japanese stocks fell by 7% in one day, and overall losses fell by more than 20% during negative interest rates. In addition, what is strange is that the yen did not appear to have the expected depreciation, but instead appreciated.

Why does negative interest rate work in Europe, but it has suffered setbacks in the process of localization in Japan? It turned out that the most troublesome thing for Japanese banks was that they could not afford to borrow money. In order to increase business volume, the Bank of Japan has already reduced the loan interest rate to the lowest level in the world. When the negative interest rate policy came out, the excess reserves lost interest income, and commercial banks suddenly fell into a dilemma. Either put money from the central bank and hold it in your hands; or make high-risk investments.

After the tide of default in the 1990s, banks have been afraid to rush to issue high-risk loans. So the money did come out of the Bank of Japan, but it was still deposited in the commercial banking system and never flowed into the market. It has neither triggered inflation nor stimulated the real economy. The financial turmoil caused by negative interest rates has also indirectly accelerated capital flight. In addition to overseas home ownership, perhaps the best way is to put money in your hands.

The limitations of Abenomics

Abe believes that if most Japanese expect inflation to occur, prices and wages will rise, and they will rush to spend or invest. Because inflation will raise prices and asset prices, do not buy now, but when? With consumption and investment demand, social production is set to move forward, and economic recovery is just around the corner.

Abe’s theory is dubbed by the industry as “Abenomics” (abenomics). Abe intends to let the central bank purchase large-scale treasury bonds, and then release 70 trillion yen of liquidity. The government deregulated and guided foreign capital into Japan’s agriculture, health care and energy fields. After the depreciation of the yen, it greatly stimulated manufacturing exports. Finally, unbinding the entity and cutting corporate tax.

At first, the Japanese just eager to borrow money to buy real estate stocks because they are optimistic about the domestic economy and look forward to the increase in income. Now, Abe wants to let Japanese nationals go back to the old road. Isn’t it a good injury? After more than a decade of deflation, the Japanese mentality has gradually become conservative. A year after Abe’s economic policy was on the road, 77% of residents said they had no hope for an increase in income.

After 2000, the average annual income of Japanese households has been declining. Fortunately, prices have remained basically unchanged, and some areas have not even risen and fallen.