{"id":20392,"date":"2016-05-03T20:09:42","date_gmt":"2016-05-04T01:09:42","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20392"},"modified":"2016-05-03T20:09:42","modified_gmt":"2016-05-04T01:09:42","slug":"draghi-espouses-the-old-excess-savings-nonsense","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20392","title":{"rendered":"Draghi espouses the old \u201cexcess savings\u201d nonsense"},"content":{"rendered":"

Draghi espouses the old \u201cexcess savings\u201d nonsense<\/a><\/h3>\n
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From today\u2019s Open Europe news summary:<\/p>\n

DRAGHI REBUKES ECB GERMAN CRITICS<\/strong><\/p>\n

In a speech on Monday, the President of the European Central Bank, Mario Draghi, delivered a blunt rebuke to German criticism of the ECB\u2019s low interest rate policy saying \u201cThere is a temptation to conclude that\u2026very low rates\u2026are the problem\u2026 But they are not the problem. They are the symptom of an underlying problem.\u201d The real problem, Draghi argued, was the excessive amount of global savings a significant part of which was caused by Germany\u2019s large current account surplus.\u00a0 In what was seen as a thinly veiled attack on Germany\u2019s finance minister, who has argued for an end to ECB stimulus, Draghi also noted that \u201cThose advocating a lesser role for monetary policy or a shorter period of monetary expansion necessarily imply a larger role for fiscal policy.\u201d<\/p>\n

Source:\u00a0The FT<\/a>\u00a0The Wall Street Journal<\/a><\/p>\n<\/blockquote>\n

It is time for ECB president Mario Draghi to go home. He has run out of ideas and\u00a0excuses. To wit, the above criticism of German bankers who, he says, do not understand that the real cause of low interest rates is not the ECB\u2019s massive interventions into the bond market, but that the world saves too much and the Germans produce too much of what the rest of the world wants to buy.<\/em><\/p>\n

Let\u2019s get one thing very clear\u2013there is no such thing as saving too much, just as there is no such thing as too much capital accumulation.\u00a0 Capital accumulation is the foundation of all economic progress. Without capital accumulation there can be no further division of labor and\u00a0no further increases in the productivity of labor. Savings\u2013real savings, not fiat money creation\u2013are required for capital accumulation; i.e., postponing consumption today in order to enjoy a higher standard of living tomorrow.\u00a0<\/em><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Draghi espouses the old \u201cexcess savings\u201d nonsense From today\u2019s Open Europe news summary: DRAGHI REBUKES ECB GERMAN CRITICS In a speech on Monday, the President of the European Central Bank, Mario Draghi, delivered a blunt rebuke to German criticism of the ECB\u2019s low interest rate policy saying \u201cThere is a temptation to conclude that\u2026very low […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13700,195,233,282,1044,7617,702],"class_list":["post-20392","post","type-post","status-publish","format-standard","hentry","category-economics","tag-capital-accumulation","tag-debt","tag-ecb","tag-european-central-bank","tag-mario-draghi","tag-mises-institute","tag-savings"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20392"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20392\/revisions"}],"predecessor-version":[{"id":20393,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20392\/revisions\/20393"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}