In order for you to quickly tell sense from nonsense when central bankers and economists are speaking, this is a timely republication of an interview by the legendary James Grant who founded Grant’s Interest Rate Observer in 1983. With America’s published debt at over $23 trillion, it is valuable to hear Grant's concise and lucid answers to questions on savings, debt, and growth.
"What is the difference between real savings and money injected into the system?"
"Real savings is consumption deferred. Money is work. It is the residue of work. Credit is a promise to pay money. It’s different than [money] itself. These days, the distinction is somewhat blurred because paper money is called notes. A note is a promise to pay and yet money also goes by the name of note. If you look at a Federal Reserve note, our greenbacks in America say, “This note is a promise to pay.” Pay what exactly? There is nothing behind it."
Click here to continue.
"What is the difference between real savings and money injected into the system?"
"Real savings is consumption deferred. Money is work. It is the residue of work. Credit is a promise to pay money. It’s different than [money] itself. These days, the distinction is somewhat blurred because paper money is called notes. A note is a promise to pay and yet money also goes by the name of note. If you look at a Federal Reserve note, our greenbacks in America say, “This note is a promise to pay.” Pay what exactly? There is nothing behind it."
Click here to continue.
RSS Feed
