PNG, if I understand the situation correctly, then most Japanese are sitting on a nice wad of saved money. And, the Japanese government would like its citizens to go on a spending spree with this money. The people are not inlcined to do so. The govenment, then, has decided to let the yen drift lower so that these savings lose value. They hope that this will stimulate spending. My question is this - If the Japanese people see that their savings are being devalued, will they be inclined to convert their savings into precious metals? What would be the consequences of such purchases?

-- No No (nono@nogo.com), March 09, 1999

Answers

Most Japanese folks are ingrained with loyalty to their systems.

-- Watchful (seethesea@msn.com), March 09, 1999.

Yes, the average savings wad account is close to $100,000. But it's yen not dollars and the number of individuals invested in overseas markets is actually very small. This total savings has U.S. investment firms salivating as they pour into Japan to try and get their share.

PART 1: Consumer thinking--Most of the money is in domestic accounts and the low return on savings isn't affected as much by currency fluctuations. If I'm only making 0.15% interest, how much lower can it go? If I only use yen, I don't worry about the exchange rate. If I invest in $ and the yen goes lower, I turn it back into yen and get more yen per $. I don't spend dollars, I only spend yen.

But, all that savings is not available! It's in banks and we all know that banks don't keep your money in boxes inside a vault.

LATE ...Gotta go. More later

-- PNG (png@gol.com), March 09, 1999.