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Sunday, May 22, 2005

savings is not about money

Frank Shostak looks at "personal savings rates" and what it means in our real world where monetary policy is dictated by central banks in his Mises Institute piece Have We Saved Enough?. He shows how real producers are looted by the loose monetary policies of central banks: "Consequently a holder of honest money, i.e., an individual who has produced real wealth, that wants to exercise his claim over goods discovers that he cannot get back all the goods he previously produced and exchanged for money." Nothing really groundbreaking here, but a clear and useful summary of principles to keep in mind while digesting the daily barrage of macroeconomic data and their faulty interpretation by mainstream economist mouthpieces.

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