1% Growth! Please to Obey Abenomics Rule!

[matsuki]

Lurker, not disagreeing with what you were saying and I agree, the switch over has never been easier. Just pointing out that many places are still holding out for whatever reasons. I mean, I'd prefer to take cash as well so I understand...but when we're talking larger sums of money it just seems silly to carry that much cash on you.

Sent from my SO-03H using Tapatalk

[Samurai_Jerk]

I still see plenty of places in Tokyo that don't take plastic and I'm not just talking about the little dirt cheap mom & pop shitamachi watering holes I tend to patronize. Those places usually have razor-thin margins so I understand why they're cash only businesses. Plus they probably engage in some creative accounting.

One time a few years back when I was going to purchase a new bed for about 200,000 yen at a pretty big store I was told cash only. I said I wasn't carrying that kind of cash on me and wondered how many shopper where. The sales lady told me it was OK if I just put down a 20,000 yen deposit and paid the rest at delivery. That wasn't the best option for me as I was panning to make the purchase with a US credit card tied to a US bank account. What really annoyed me is she didn't mention that it was cash only till after I had filled out the surprising amount of paperwork and scheduled a delivery time (probably a sales tactic). On top of that she kind of had an attitude like I was the idiot for thinking a place selling imported beds that cost as much as a million yen would take credit cards. I just turned around and walked away leaving the paperwork on the table. She looked shocked and was trying to say something but didn't seem to be able to get the words out of her mouth.

[matsuki]

What really annoyed me is she didn't mention that it was cash only till after I had filled out the surprising amount of paperwork and scheduled a delivery time (probably a sales tactic). On top of that she kind of had an attitude like I was the idiot for thinking a place selling imported beds that cost as much as a million yen would take credit cards. I just turned around and walked away leaving the paperwork on the table. She looked shocked and was trying to say something but didn't seem to be able to get the words out of her mouth.

I had this happen at a rather nice restaurant a few years back. Most places usually apologize that they don't accept credit cards...but this manager had this atarimae attitude about it, as if I was offending them by assuming they would accept credit cards. I was paying for everyone so it was close to 4man and I just didn't have that much cash on me. Everyone else went back to their hotel and I had to run to an ATM to pull out cash and bring it back to the restaurant. To their credit, I've heard of other places calling the police in similar situations...yet they let this FG walk out of there with nothing but a promise to return and pay. (of course, I did...but was a hassle that could have been avoided with a 現金のみ sign or something)

[Wage Slave]

Not much to disagree with there, as I apparently either don't pay enough attention or have the right skills, but you might be overestimating the typical Japanese saver's reaction to as large a rate change as one set to negative 0.01%. That's a hundreth of a percent, as you know, which is the equivalent of 1 yen per 10,000 (assuming that skill set still works).

Assuming somebody has 1,300,000 yen in savings that could really puff up one of those awful buckwheat husk pillows What I do agree with FG about is the potential for a fairly economicaly damaging but thoroughly Chaplinesque herd reaction to even a very limited negative rate. The Japanese and especially older Japanese operate on margins so slim not even cheap arsed buggers like us can relate to them. And they hate banks, as they well should. And it is adorable. Nyorrro..............

OK, fine. make it -.001% then. Which I think is about what Shinsei pays at present (but positive of course). The point is there is a level which people will accept in exchange for security and not rush to withdraw everything in cash.

Personally, I really don't want anything much more than a few hundred thousand at most in the house - either with or without a safe from the Home Center. So I wouldn't be rushing to hold cash or some other asset the moment interest rates went negative.

[kurogane]

OK, fine. make it -.001% then. The point is there is a level which people will accept in exchange for security and not rush to withdraw everything in cash.

Agreed, at least at that rate Agreed also on keeping cash around, but They don't. Agree, that is. I have been astounded at the amounts I have seen drawn out of the marble bag hidden under the front hall staircase at people's houses. It was rather obvious they had at least 1,000,000 yen on hand. Often hidden in rather obvious places. They're weerd, man.

So, anyways: agreeing that there easily could be a sign saying Cash Only at any more modern and expensive place, 4 Man is chicken feed to carry to a business dinner, esp. if you are paying, and you should have done your homework and phoned ahead. Like SamJerk said, it's all about the margins. Take WTF the VISA/MC margin is off even a nice fat bill and you have a negative incentive to work. They operate on chickenfeed budgets and profits, and the idea of paying somebody 4% to do something they can do without paying that sounds like madness. If you really want to rant, rant about ATMs that have business hours.
IT'S A FUCKING MASHEEEEEENNNNNNNNNNNNNNNNNNNNNNNNNNN

Japan remains a predominantly cash economy. There. Said it. Na nanananana Which is going to make the Olympics Quite Amusing, I think. 4 years is not nearly enough time to ramp up that monstrous a transformation.


SJ,
That bed buying story sounds kinda fucked up. Any idea why they would only take cash?

[matsuki]

Kuro, yeah, merchant accounts/rates/transaction fees here are just as fucked...which is why I said I understand the desire to not take credit cards....but it's fucking 2016 and POS transactions can made by anyone with a fucking smartphone. Last time in the US, the taco cart guy at the beach in San Diego literally pulled out his smartphone and reader and said we can pay by card. Maybe in Japan SQUARE needs to be a fax machine attachment rather than a smartphone attachment....

4 Man is chicken feed to carry to a business dinner, esp. if you are paying, and you should have done your homework and phoned ahead

It was a last minute type deal, and in my experience, most of the higher end places take cards. Whattchagonnado?

That being said, and Wags knows why I want any reason to talk shit about UNIQLO, the local shop will not take credit cards. Another one nearby won't take AMEX, but then the one in Shinjuku takes everything. Can you get any more confusing?

Don't even get me started on ATMs here....after hours fees, if you can even use the machine. Not only do they force you to use cash, they make dealing with cash quite "fun."

[legion]

I still see plenty of places in Tokyo that don't take plastic and I'm not just talking about the little dirt cheap mom & pop shitamachi watering holes I tend to patronize. Those places usually have razor-thin margins so I understand why they're cash only businesses. Plus they probably engage in some creative accounting.

One time a few years back when I was going to purchase a new bed for about 200,000 yen at a pretty big store I was told cash only. I said I wasn't carrying that kind of cash on me and wondered how many shopper where. The sales lady told me it was OK if I just put down a 20,000 yen deposit and paid the rest at delivery. That wasn't the best option for me as I was panning to make the purchase with a US credit card tied to a US bank account. What really annoyed me is she didn't mention that it was cash only till after I had filled out the surprising amount of paperwork and scheduled a delivery time (probably a sales tactic). On top of that she kind of had an attitude like I was the idiot for thinking a place selling imported beds that cost as much as a million yen would take credit cards. I just turned around and walked away leaving the paperwork on the table. She looked shocked and was trying to say something but didn't seem to be able to get the words out of her mouth.

Doesn't take credit cards or doesn't take your credit card, there's a difference.

Retailers have to pay credit card companies to offer the service, it's an added expense multiplied by the number of cards they take

and it leaves a paper trail for the tax man to follow

[Samurai_Jerk]

SJ,
That bed buying story sounds kinda fucked up. Any idea why they would only take cash?

Not a clue.

4 Man is chicken feed to carry to a business dinner, esp. if you are paying, and you should have done your homework and phoned ahead

It was a last minute type deal, and in my experience, most of the higher end places take cards. Whattchagonnado?

That being said, and Wags knows why I want any reason to talk shit about UNIQLO, the local shop will not take credit cards. Another one nearby won't take AMEX, but then the one in Shinjuku takes everything. Can you get any more confusing?

Don't even get me started on ATMs here....after hours fees, if you can even use the machine. Not only do they force you to use cash, they make dealing with cash quite "fun."

Some of the very high-end traditional restaurants definitely don't take credit cards. For of of them it's just because they're old and stubborn but it's also often a margins thing. Very expensive restaurants use very expensive ingredients, pay their staff a livable wage, and have a high staff to customer ratio. Not that a 4 man dinner for "everyone" restaurant falls into that category.

That reminds me, a friend of mind reserved a cabin in the mountains for a group of us one summer. He had to pay a 5000 yen deposit and not only did the owners not take cards but they also didn't accept furikomi so he literally had mail them cash. Talk about stubborn.

Anyway, what are the chances that Olympics will at least force Japan to finally have a unified 24-hour ATM network that accepts all the cards that are accepted everywhere else in the world? Am I just too much of a dreamer?

[Samurai_Jerk]

Doesn't take credit cards or doesn't take your credit card, there's a difference.

Retailers have to pay credit card companies to offer the service, it's an added expense multiplied by the number of cards they take

and it leaves a paper trail for the tax man to follow

Didn't take credit cards period. I could have paid with an Amex or a Visa so that wouldn't have been an issue anyway.

I understand all of that but if you're a large store selling pieces of furniture for hundreds of thousands and even millions of yen, it's pretty unusual not to take credit cards.

[legion]

Doesn't take credit cards or doesn't take your credit card, there's a difference.

Retailers have to pay credit card companies to offer the service, it's an added expense multiplied by the number of cards they take

and it leaves a paper trail for the tax man to follow

Didn't take credit cards period. I could have paid with an Amex or a Visa so that wouldn't have been an issue anyway.

I understand all of that but if you're a large store selling pieces of furniture for hundreds of thousands and even millions of yen, it's pretty unusual not to take credit cards.

I mean your credit card, as in your individual card, irrespective of the credit card company.

[Samurai_Jerk]

Doesn't take credit cards or doesn't take your credit card, there's a difference.

Retailers have to pay credit card companies to offer the service, it's an added expense multiplied by the number of cards they take

and it leaves a paper trail for the tax man to follow

Didn't take credit cards period. I could have paid with an Amex or a Visa so that wouldn't have been an issue anyway.

I understand all of that but if you're a large store selling pieces of furniture for hundreds of thousands and even millions of yen, it's pretty unusual not to take credit cards.

I mean your credit card, as in your individual card, irrespective of the credit card company.

Why would they do that?

[legion]

Why would they do that?

Because gaijin

[Samurai_Jerk]

I've heard of places that can't take foreign credit cards and places denying service to foreigners but I've never heard of a place that won't take a credit card that belongs to a foreigner they're willing to do business with.

[Russell]

Talking about cash, when I bought my house, it was cash-only.

That involved a lot of counting at the bank branch office...

[Wage Slave]

Talking about cash, when I bought my house, it was cash-only.

That involved a lot of counting at the bank branch office...

Wow! Russian mafia style eh? In my case we all had to meet at our bank. The sellers, us, our lawyer, their lawyer, the agent and the bank manager. Our and their bank books were taken and away a minion went. She returned, showed me my book and confirmed I wanted the transfer. She then gave the sellers' book back and they confirmed they had received it. Everyone signed about a dozen papers and that was it. We were given the keys and drove off to take possession. Actually pretty quick, safe and cheap I thought.

[Yokohammer]

Talking about cash, when I bought my house, it was cash-only.

That involved a lot of counting at the bank branch office...

Wow! Russian mafia style eh? In my case we all had to meet at our bank. The sellers, us, our lawyer, their lawyer, the agent and the bank manager. Our and their bank books were taken and away a minion went. She returned, showed me my book and confirmed I wanted the transfer. She then gave the sellers' book back and they confirmed they had received it. Everyone signed about a dozen papers and that was it. We were given the keys and drove off to take possession. Actually pretty quick, safe and cheap I thought.

My experience exactly.

Still a cash transaction, I thought.

[Coligny]

Talking about cash, when I bought my house, it was cash-only.

That involved a lot of counting at the bank branch office...

Same when we buy cars.

Not exactly glamourous to count the coins for the Nissan Note... Or to get 65 yens back in change...

[FG Lurker]

It strongly depends on what level of negative interest rate they were to set. Set it at -10% and yes, certainly, the demand for cash would be astronomical.

However, set it as negative as it is now positive -.01% or thereabouts and there wouldn't be anything like the same reaction. The vast majority of people would suck that up in exchange for security and might perhaps have a bit more propensity to spend at the margin. And that would be job done as far as the BoJ is concerned.

The rate now is about as close to zero as they can get without adding an unreasonable number of decimal places.

The reason for going negative would be to force consumer spending to stimulate the economy and create inflation. This is the exact opposite of raising rates during boom times to slow down inflation and lower demand. With this in mind -0.1% would not be effective, as you also mentioned. -2% might be. As with raising rates until people start saving instead of spending, rates wold have to be lowered until people were actually willing to spend instead of save.

To restate because people seem to keep thinking that I expect this to happen: I don't expect this to happen. It's just a discussion about why allowing cash would defeat the purpose of negative deposit interest rates.

[Wage Slave]

It all depends on something economists call elasticity and how consumers behave at the margin. If you believe that consumers propensity to spend vs save is relatively elastic in respect of interest rates then even a very small negative rate would cause an increase in marginal propensity to spend. The BoJ wouldn't be seeking to increase spending by vast amounts - 5% would be more than job done. Talk of forcing people to spend is too strong - They would be out to nudge gently.

As you say though, it is all conjecture and not particularly likely - But for the sake of discussion, I think it could be done without having to abolish cash at the same time provided the rate was low enough. It might even boost spending a bit for a while but wouldn't address the real problem which is misallocation of resources.

[Wage Slave]

Here's the real problem. And the reason the demographic shift here can't be shrugged off as just a period of adjustment.

The number of households living on welfare hit a record high 1,634,185 in December, the government said Wednesday. The Health, Labor and Welfare Ministry attributed the figure, up 1,965 from the previous month, to an increase in households consisting of elderly people living alone with no outside income coming in.

The number of welfare-dependent households consisting of persons aged 65 or older reached 805,723, up by 1,877 from the previous month and accounting for 49.6 percent of the total. Of those, more than 90 percent consisted of a single individual, according to data released by the ministry. The number of individuals on welfare was 2,165,585, up 1,210 from November. The number accounts for 1.71 percent of the nation’s total population, the ministry said.

Meanwhile, the number of households with children living in poverty has doubled over a 20-year period from 1992, according to the findings of an academic study released Tuesday.

http://www.japantimes.co.jp/news/2016/03/02/national/japan-child-rearing-homes-living-poverty-doubled-20-years-1-46-million-researcher/?utm_source=Daily+News+Updates&utm_campaign=2cc9d11f45-Thursday_email_updates03_03_2016&utm_medium=email&utm_term=0_c5a6080d40-2cc9d11f45-332417077#.Vtgqsvl967R

[kurogane]

Talking about cash, when I bought my house, it was cash-only.

Wow! Russian mafia style eh? In my case we all had to meet at our bank.

My experience exactly.

Still a cash transaction, I thought.

I have never bought any real property, but I cannot imagine how else it would work.

BUYER: here's the money for your house so that it will become our house
SELLER: Thank you. Here is your new house.
Non? Any seller must have cash in hand anywhere normal, I would think.

Also, I am always surprised and slightly suspicious of any non-global scale Japanese outfit accepting AMEX: they're like the Sopranos of credit cards, both for merchants and clients. I always feel such places are not my style, and the rate they charge merchants is usually double the normal VISA/MC rate. Not accepting AMEX is pretty normal anywhere I go. I don't understand their current business model.

As for Earth style ATMs in time for 2020, we can dream...............we can always dream.

BTW, I do believe that as of January 1 most people can now get 24 hr ATM service at most convenience store ATMs. You pay, but we do that here in Canadia too.

[Samurai_Jerk]

Talking about cash, when I bought my house, it was cash-only.

Wow! Russian mafia style eh? In my case we all had to meet at our bank.

My experience exactly.

Still a cash transaction, I thought.

I have never bought any real property, but I cannot imagine how else it would work.

BUYER: here's the money for your house so that it will become our house
SELLER: Thank you. Here is your new house.
Non? Any seller must have cash in hand anywhere normal, I would think.

Also, I am always surprised and slightly suspicious of any non-global scale Japanese outfit accepting AMEX: they're like the Sopranos of credit cards, both for merchants and clients. I always feel such places are not my style, and the rate they charge merchants is usually double the normal VISA/MC rate. Not accepting AMEX is pretty normal anywhere I go. I don't understand their current business model.

As for Earth style ATMs in time for 2020, we can dream...............we can always dream.

BTW, I do believe that as of January 1 most people can now get 24 hr ATM service at most convenience store ATMs. You pay, but we do that here in Canadia too.

You think it's normal to break out a stack of bills for a down payment on a house!? Ever heard of escrow service?

My US Amex is great for clients. Any charge I dispute is automatically canceled with a phone call. It's not as easy with my Japanese Amex. However, I do like Amex Japan because so far they're the only ones who will give this gaijin a credit card.

Yes, the convenience store ATM situation has improved greatly in the past year or so. I can now use my Shinsei cash card pretty much anywhere 24 hours a day and most don't charge a fee. That used to only be true of 7-i ATM's. Some bank ATM's still give me trouble after hours though and most still aren't 24 hours. It is strange that my Shinsei card has always been more widely accepted outside of Japan.

I wonder if holders of cards issued overseas are still having issues taking out cash at convenience stores. I remember 2 or 3 years ago my Korean friend had trouble when he was visiting. Not even 7-11 would take his card and they're usually the one place that will when all else fails. He couldn't believe it because he had used his card all over the world and never had a problem.

[Wage Slave]

BUYER: here's the money for your house so that it will become our house
SELLER: Thank you. Here is your new house.
Non? Any seller must have cash in hand anywhere normal, I would think.

What? I think you are wrongly conflating cash and money. They are two different things if you think about it. All cash is money but not all money is cash.

[kurogane]

Aaaah. Gotcha. Thanks. I meant payment on delivery like you did at the bank, not an actual Russian mob payment........my bad.

As for foreign cards working in Jpn ATMs it does seem much better this past year or two. Until then I do believe it was only the PO ATMs that regularly accepted furry bank cards, and no chain convenience stores did at all, ever, no way, no how. I think I used my Cdn bank card at a 7/11 or Family Mart ATM this last December with no problems, and perhaps even no fees (my Cdn bank doesn't charge me fees).

Now, as for AMEX, I can see why a client would like it. Clients don't pay the punishing payment commission that the merchant does. Sarcastic, yes, but you are aware that if you pay a credit card company >5% commission on a payment from a client that is >5% of the client's payment you don't actually get, yes? BTW, I am not advocating the sorry 1993 state of affairs, I'm explaining the rationale in MYHOMO and IME. BTW, in the early 1990s we charged tour clients half the AMEX commission for those reasons, and they understood that. IT DOESN'T MAKE SENSE FOR MANY IF NOT MOST SMALLER BUSINESSES TO ACCEPT CREDIT CARD PAYMENTS (by their way of thinking, I mean; I fully agree it could actually increase total sales and therefore income, though many would still view the "lost" x% commission as negative incentive). If I didn't know better I might think you buy their BS about Globetrotting Large Scale Japanese Capitalism as the standard business mode rather than the abberrant exception it is. They're a really F'in weerd people, and they mostly operate on a penny ante church bazaar scale.


And I genuinely find that all quite adorable, FTR, but I would rather move to f'in Iowa than try to do business with them again.

[Takechanpoo]

https://www.gc.cuny.edu/CUNY_GC/media/L ... rugman.pdf

[Russell]

https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/Meeting-minutes-Krugman.pdf

Krugman is a fucking hypocrite.

All the time trying to push Japan towards a fiscal stimulus policy, while not supporting the presidential candidate (Bernie Sanders) in his own country whose policies would be a big stimulus for the U.S. economy.

[yanpa]

As for foreign cards working in Jpn ATMs it does seem much better this past year or two. Until then I do believe it was only the PO ATMs that regularly accepted furry bank cards, and no chain convenience stores did at all, ever, no way, no how. I think I used my Cdn bank card at a 7/11 or Family Mart ATM this last December with no problems, and perhaps even no fees (my Cdn bank doesn't charge me fees).

IIRC 7/11 has been furriner-friendly since at least 2008. Before that, Mitsui-Sumitomo was my go-to ATM location of choice, and I fondly remember in the mid-90s pilgrimaging to the Japan Post ATM on the 7th floor of My Shitty (now known as Lumine Est) at Shinjuku Station as it was the only one in the known local universe which could talk to Gaikoku (stupidly I didn't realize Monbusho paid in arrears and turned up with just about enough to keep me from starving until I could arrange - in pre-universal-internet days - some monies paid into my otherwise empty backhome account).

[matsuki]

7th floor of My Shitty (now known as Lumine Est) at Shinjuku Station

Next "My Lord" ....and pronounced in proper peasant accent by Japanese as M'lord?

[Wage Slave]

https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/pkrugman/Meeting-minutes-Krugman.pdf

A rather odd document that one. Either Paul Krugman doesn't speak very good English or the person who transcribed doesn't. Also, it says a couple of times that the discussion is off the record and confidential - It's not an official record of the meeting, that is for sure.

As far as what is being said - Hmmm. It agrees pretty much with Legion's link. The wrong, and usual suspects, are being stimulated. The amount of money in Japan has soared but it has all gone to the big companies and banks who are content to just squirrel most of it away and play the stock markets with the rest. Net result in the real economy almost zero. Growth in wages - zero. Growth in demand - zero.

It's the fundamental misallocation of resources that is holding the country back. North America and Europe have the same problem but it isn't as severe. It's all very well to loosen fiscal policy but unless the money starts to trickle down instead of flood upwards all that will happen is that the big companies and the very well off will squirrel away even more. And I'm not sure that loading the rest of us with more and more debt to achieve that is very moral even if he is right that there is nothing much to fear economically. And that is doubtful. Yes, if you have your own currency you can simply print more money but look what happened in Germany and Japan in the 1930's when they went too far with that in response to stagnant demand. Or Zimbabwe.

It seems we need a big project or clutch or decent size projects. It's OK to borrow or create new money if you are doing something meaningful and labour intensive with it. Ideas, that don't include a war, on the back of a postcard please. Perhaps a really big drive towards renewable energy, improved switching/distribution systems and new power plants that can vary their output on demand? Or pushing IT into every corner of the world as quickly as we can? Or throw money, advice, mentoring and monitoring at young entrepreneurs of all kinds? Or pile money into education for all ages and in all things. Or go the New Deal route. Build lots and lots of new houses, schools, highways, railways and such. Demolish lots of crappy houses and schools and build new ones? All of the above?

Nah. Too dangerous because unless private enterprise is in control the money will all just be wasted. Far better to make sure that public spending falls further and use monetary policy (aka creating new money) to fatten further the bank accounts of the usual suspects.

[yanpa]

Or go the New Deal route. Build lots and lots of new houses, schools, highways, railways and such.

Dang, that's what Japan's desperately short of - lots and lots of new highways and railways

But yeah, definitely more childcare facilities.