The Japanese economy is sliding into oblivion pulled along by central bank policy. In response, the Japanese people are buying gold.

Economic growth has languished in Japan for nearly two decades despite extraordinary monetary policy including negative interest rates and round after round of stimulus. The government even flirted with the idea of helicopter money, although that appears to be off the table, at least for the time being.

Factory output is down and stocks are slumping. The Japanese government just cut its GDP estimate from 1.7% to 0.4%, and Prime Minister Shinzo Abe urged more central bank intervention. He called for coordinated stimulus from the government and the central bank in yet another attempt to revive the ailing economy.

Meanwhile Japanese people are doing what people have done for centuries when faced with economic uncertainty. They are plunging into gold.

According to a Bloomberg report, gold sales at Tanaka Holdings Co. surged 60% in June. Tetsushi Kudo was one of the recent customers at Japan’s largest bullion dealer. He bought a 1-ounce gold coin, and said he plans to buy more:

I want to buy gold every year as a birthday present for my daughter. She will thank me for the gift when she grows up because gold will have value wherever she goes.”

The surging yen has caught the attention of many economic analysts, but some say it isn’t going up for the reasons you might think. It has more to do with pessimism about global growth than it does Japanese confidence in their own economy. It’s the exact same reason more and more Japanese are turning to gold according to Itsuo Toshima, an investment adviser and former regional manager for the World Gold Council in Tokyo:

For investors, buying gold is similar to casting a no-confidence vote. Gold is the unprintable currency, unlike the yen. The yen’s appreciation in spite of the adoption of the negative-rate policy has kindled skepticism about the policy’s benefits. It’s also led to investors seeking to protect their assets in case Abenomics fails.”

Negative interest rates have pressured bond yields lower and lower around the world. That’s leading to a surge in gold investing. And the bond yield problem is particularly acute in Japan, according to Bloomberg:

Record Bank of Japan bond purchases are pushing down Japanese yields even as the nation’s debt balloons to the equivalent of about 250% of economic output, according to International Monetary Fund projections. Abe delayed a sales tax increase for a second time on June 1 in the face of weak consumer spending.”

There’s another interesting angle to the Japanese gold-buying spree. Many investors are choosing to store their gold overseas. Japanese buyers of gold to store in Switzerland jumped 62% in the first six months of 2016 compared with the second half of last year. Yoko Takeda, the chief economist at Mitsubishi Research Institute, speculated that Japanese investors are looking to keep gold abroad because of negative interest rates and fear the yen will eventually weaken saying, “It’s beyond the central bank’s capacity to control anxiety spreading across the globe in post-Brexit era.”

ZeroHedge offered up another possible explanation:

[They are also buying gold] due to fears that Abe will pull an ‘Executive Order 6102,’ and force gold confiscation from the population.”

Americans should consider what’s happening in Japan. In an interview on CNBC last month, Peter Schiff predicted a currency crisis will soon grip the US:

So we’re going into a currency crisis, and this crisis is going to be much bigger than a financial crisis. The impact it’s going to have on the average American, on his standard of living, on his way of life is going to be much more profound. And sure, people won’t lose as much money in their stock portfolio, but if they try to sell their stocks and spend the money, the purchasing power that they lose is going to be much greater then what was lost in ‘08.”

By Samuel Bryan