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Comment by toyg | Hacker News Reader

No, these savings are just offsetting shrinking retirement and welfare provisions from the State. They do very little for investment (pension funds are naturally conservative) and nothing for immediate consumption, grinding the overall system slowly to a halt. Japan historically has a similar problem due to cultural elements, Europe is getting there because of prolonged austerity "reforms".

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Where do you imagine the saved money goes?

In a modern economy "savings" equals investment. Even using a bank deposit account transforms one persons savings into another's business loan or mortgage.

This seems to be a widely held misconception - that savings are economically inert - a bit like a squirrel's nut hoard.

> In a modern economy "savings" equals investment

This, is a widely held misconception. A bank is no longer allowed to re-invest more than a small proportion of it's customers' savings.

https://en.wikipedia.org/wiki/Fractional-reserve_banking#Res...

The massive accumulation of capital to the top 1% means competition for investment opportunities... aka capital is really cheap as investors hook up the money funnel to anything that smells like yield. That encourages malinvestment.

Businesses don't need loans when they don't have customers with money to spend.

Nah, between "firewalls" and rock-bottom central bank rates, money invested (or rather multiplied, through fractional etc etc) by banks today is not coming from savings. Which is why returns on savings are basically non-existent; but it's the only wealth accumulation available to everyone, and in times of "austere" frugality with uncertain job prospects, people keep accumulating them anyway.

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