It's like an iceberg – it just won't melt. It will just sit there, immobile and frozen in time.

referring to the estimated 36 trillion yen that households are probably hoarding because banks pay almost no interest on deposit accounts. (CNBC)

Any wonder why domestic consumption is so difficult to stimulate in Japan? It is a vicious cycle -- the government needs to keep rates low, because they have so much debt, so the banks get low rates on the money they invest in those bonds, which means they cannot pay decent rates to the public. And, as Kumano said, it's not going to change anytime soon.

Is this guy saying that households are holding 36 trillion yen in yen notes? Because if they aren't notes, the yen they are "hoarding" is sitting in bank accounts, and he is just another "economist" with no clue about anything. And he has lots of company.

I would like to know what empirical evidence Kumano-san can provide to back his statement that (1) "probably" households are hoarding 36 trillion yen and, if this is the case, (2) they are doing this because of banks' low interest rates. Simple logic tells me that even low interests are better than no interest rates at all, which is what happens if you stash your 36 trillion yen under the tatami or wherever.

"hoarding" and "probably" seem to indicate the money is cash, stashed at home. Pretty common, in Japan. The looters on MIyakejima targeted the huge number of home safes after the evacuation, I recall reading. Rich pickings! And quite a few homes in my neighborhood have "Secom" warning stickers at their entrances.

Not surprising, though. Japan doesn't have the social security safety net found in other countries, so households always need to have a whack of cash to pay the bills. The last time I asked to pay by credit card at a big general hospital, I was refused. Had to give them a few brown ones. Same at the dentist.

Furthermore, pension and medical insurance payments are billed separately from taxes and are commonly done in cash at the local combini.

households always need to have a whack of cash to pay the bills.

Not so. My household here in Japan has as many bills to pay as any other household, but we don't need a 'whack of cash' to get by. Most regular bills, including pension and insurance, get paid by direct debit. The only cash we need to keep by us is enough the pay the monthly newspaper bill when the girl comes to collect it, and the weekly supermarket shopping (which I could pay for by credit card if I didn't mind paying months later for food that I no longer remember the taste of). Oh, and the annual rent on the allotment that gets paid in cash directly to the yakuba.

Let's give Mr Kumano the benefit of the doubt; the 36 trillion yen is money that has gone into the economy and then disappeared, the logical conclusion being that people are holding onto it, whether it's in their bank accounts or under the mattress. It could be the 'probably' indicates speculation as to why the money is not being spent, rather than the fact of it being hoarded.

My household here in Japan has as many bills to pay as any other household, but we don't need a 'whack of cash' to get by.

I agree. We pay almost nothing cash. All of our bills and our rent go through my credit card, which gets direct debited from my account the following month - with the added bonus that I get air miles for all the money spent on bills and rent!

Not true.

The "Negative Savings" rate (which is when they spend more than they save) has been increasing, and is expected to increase.

Source:

http://www.japantimes.co.jp/opinion/2015/02/13/editorials/negative-savings-rates-loom/#.VSCOffmUcjU

But it won't go up quickly, because people ain't stupid. They know that once they're cash is gone, they are in DEEP trouble, since nobody trusts this crooked government.

@Guy I think it is referring to bank deposits actually. Poorly written though, they need to explain that the "hoarding" refers to people leaving the money in their accounts knowing that inflation won't damage its value.

The statement says that households are "hoarding" money " because banks pay almost no interest on deposit accounts." I agree with the above poster that this is poorly stated. What it sounds lke is that they are keeping this money at home and the reason for it sounds like a non sequitur. Did Kumano-san mean something else?

A quick calculation (assuming no errors made) shows it works out to about 280,000 yen per person being hoarded as notes, which actually sounds like a plausible amount. Wouldn't need that many old timers stashing millions around their house to hit that number. I apologize for possibly being wrong on the internet with my first post.

Because if they aren't notes, the yen they are "hoarding" is sitting in bank accounts, and he is just another "economist" with no clue about anything. And he has lots of company.

That is one possible answer. But there are at least two other possible answers, both involve politics (loosely speaking):

1) He is saying this to appeal to the masses, perhaps in the hope of gaining fame.

2) He is saying this in an attempt to stimulate consumer spending, perhaps he was even put up to it.

Elderly people definitely do hoard under-the-mattress money at home. They are nervous, they remember when times were tough, and they don't entirely trust the banks. I would say an average amount is 1,000,000 yen, based on what people have told me themselves (I've had to beg certain older students to not discuss these things openly) or what their children/grandchildren have discovered while cleaning out the closets. Personally I have a bad habit of hoarding pin money in savings accounts that I barely use. If it can happen to me, it can happen to anyone!

Anyway, the man does not know iceberg. They melt. Melting actually creates icebergs. That melting is reaching catastrophic levels. I'd still like to know if any of this speculation is based on any sort of scientific research or just the man's feelings.

It's like an iceberg – it just won't melt. It will just sit there, immobile and frozen in time.

Oh stop it! You are making burglar's mouths water even more and planning which old lady to scam next.

I think it is referring to bank deposits actually.

No, it's cash under the matress.

36 trillion yen is just a fraction of total household wealth (1600 trillion?), the bulk of which must be in the bank.

And here's the CNBC article: http://www.cnbc.com/id/102547588