Savings vs. consumption; unemployment; and the US dollar

Watch the full 27-minute video at http://www.goldmoney.com/schwartz-macleod-interview. In this video Pedro Schwartz, professor of Economics at Madrid's San Pablo University, and Alasdair Macleod of the GoldMoney Foundation, talk about savings and consumption. Schwartz talks about the connection between savings and investment, a point that is often overlooked in his view. There is no opposition between savings and consumption, as savings will eventually be used for consumption. Schwartz says that a change in mentality has to come about with regards to savings, especially when it comes to the issue of retirement. People will have to save more from much earlier in order to have a comfortable retirement.

Talking about labour laws, Schwartz states unemployment in Spain is leading to tragic social consequences. He points out that the official youth unemployment rate in Spain stands at 46% -- the highest level in Europe. Our fractional reserve banking system requires a lender of last resort because the leveraging and multiplication of the base money supply puts normal checking accounts at risk. However the bailing out of bankrupt companies and countries is a different story. America's current dollar policy will not spur growth, but will instead lead to more imbalances, and as a political consequence, contribute significantly to the further decline of the west.

This interview was recorded on November 15 2011 in Madrid.

Category:

News & Politics

Tags:

• Germany
• savings
• consumption
• labour markets
• unemployment
• Spain
• paper money
• dollar
• USA
• Pedro Schwartz
• GoldMoney Foundation
• Alasdair Macleod
• Madrid

[stopandstare52]

@zuluwhiskybravo actually, every time the fed prints money the dollar decreases in value. Also, you have to keep in mind that it is policy for most governments to have inflation. It is how they grow their economies. They don't aim for zero inflation, or deflation. Here in Canada, they have a set target rate of 2%. And that is based on their doctored basket of goods. If they actually included ESSENTIAL items it would be much higher. So even by their standards your guaranteed to lose 2%/yr.

[81onedeep]

@ShikamaruTKD except the majority of spending is on credit and thier spending isnt going to help the american economy when all the goods they buy are made over seas. how is americans buying over seas junk on credit going to stop the fed from printing trillions and the gov from spending them?

[stopandstare52]

saving is the worst thing you can do with your money. Only CONSUMERS save. So-called Saving is really "guaranteed capital destruction". There are only consumers, producers, and investors. The rich ones are the producers and investors. Everyone else is a consumer. The difference - producers and investors use the money they have to buy equipment or invest their money into assets that will help them make more money, or will INCREASE in VALUE over time, unlike money which DECREASES in value.

[vonGleichenT]

Excellent conversation

[sebholding]

@zuluwhiskybravo yes that's right. it's one thing to have saving, it's a second thing that entreprenors are stimulate to invest thise saving in the economy.

[dishesdealer417]

Couldn't they find somebody better to interview? This guy isn't very good onw what is going on now.

[ShikamaruTKD]

americans dont save they spend. this is why the u.s economy will be back strong

[Pfsif]

I worked in 2 trade unions where the members paid through dues and the Officers looked out only for themselves and their cushy jobs.

[syprix]

I think that you need to encourage people to increase their financial IQ instead of saving. That way they can learn how to find proper invest for themselves, because in today's world savers are looser's.

[eyeswideopennimrod]

What a load of BS by a couple of pompos twats, this channel normally shows good advice, bus was to save money as fiat savings are going down the toilet due to over printing. Then they go and agree with bailing out banks because they have lent out too much due to over leveraging themselves, but we should let a business fail, probably due to a banks actions. Buy gold, silver or some commodity of worth as the fiat system is dead, then await the new system after the collapse and start again