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My point is the temporal nature of savings is a social construct. Even with sound money, it's not a perfect proxy for the availability of capital, nor does it account for capital depreciation across time, relative to the production in which the savings were accumulated.

You can do some basic thought experiments here to realize how this concept is purely normative.

Let's say you diligently saved up bitcoin for your whole life, and then suddenly, one day, every factory in the planet shut down. For whatever reason. Alien mind control, whatever. The point is you just have to imagine everyone stopped making "stuff" all at once.

What would your bitcoin be "worth"?

It's a silly example, but it reveals the socially contingent nature of all of this.

Mike Brock 2y ago

Moreover, the value of savings is tied to the productive capacity of the economy. If an economy is more productive, each unit of saved currency can command more real goods and services in the future. However, if an economy’s productivity stagnates or declines, the real value of savings may decrease, regardless of whether the nominal amount of money saved grows.

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j'ai les clés 2y ago

Plz ELI5

Why would the real value of savings decrease when an economy’s productivity stagnates or declines? I don’t follow this, especially in a global market for goods & services.

Mike Brock 2y ago

You assume unrestricted access to said global market. Or that said market exists at all.

Semi-Normal 2y ago

In the same way that monetary scarcity increases what can be purchased with that money, scarcity of goods increases the amount of money those goods can "buy".

If you save when goods are plentiful, and attempt to spend when goods are scarce, you will find that your "real" purchasing power has likely declined.