I think you are missing my point. An individual who saves for future consumption is setting aside money that can be used in the present to buy capital-goods, through the form of a loan. So, any form of capital accumulation—or the accumulation of money that can be used to buy capital-goods, if you will—is useful, even if the intent of the saver is to consume in the future.

Mises wrote: ” Money is part of the private capital of an individual only if and so far as it constitutes a means by which the individual in question can obtain other capital goods. “

Source (end of part 2)

Thus, if money constitutes a means by which the individual in question can obtain consumption goods, than accumulation of that money by an individual is not accumulation of capital.

So, saving money for future consumption is one thing,
saving money to buy capital goods is another thing.

in your article you wrote that
“money is not synonymous with wealth or capital “, and now in your reply you seem to use the word “capital” as synonymous of money. Can you clear my confusion ?

Individuals who save for future consumption are accumulating capital which in the meantime will be borrowed by entrepreneurs interested in buying capital-goods.

Saving money for future consumption is one thing,
saving money to buy capital goods is another thing.

i usually place several question marks after something im not sure about or if i am asking a question.

Slow down. Read the replies. Take your time.

Structure your own replies. It’s hard to tell questions from affirmations in your posts.

for the same time period economagic.com shows savings accounts to start at 3.5 trillion and and in early 2006 to be at 3.6 trillion. if true????

is there some overlap between m1 and the savings account figures?? if not??????, what would krugman-like economists say about the 100 billion dollar increase in saving from 2005 to 2006?

is krugman calling a savings account not true savings????

if a new dollar was printed that made its way into a checking account…is it likely that dollar would be loaned and an instant credit-dollar created to enable check writing?? if the loaned paper dollar made its way to a savings account would there then be that same paper dollar loaned, a possible debit-dollar from a savings account and the earlier spent checking account dollar??

does this make sense???

do you refer to checking accounts as checkings or is that a typo?

wouldnt a true savings account just be a money hoard and a loan be a surrendering of money for a given time with a hoped for interest return…risk lending, iow???

1. Given the “paradox of thrift,” all types of savings are bad for the economy.
2. Government must make up for a loss in private investment.
3. The United States’ economy would grow if China were to sell its US treasury bills.”

i assume the krugman to be a real economist???? a degree, etc?? i have never paid any attention to him.

if as he and others say all types of savings are bad for the current economy

and if this is true

” Current “savings accounts” are checking deposits where you can’t use the money as debit, but you can transfer from “savings” to “checkings” at any time without suffering consequences.

Simply loaning money does not cause credit expansion. Credit expansion occurs when money is loaned from checkings, because checkings accounts are usually used for present consumption, not future consumption. So, extending one note to one customer while extending another, based on the same account, is credit expansion.” ( DOES THIS ACTUALLY TAKE PLACE NOW??????)

by what mechanism would current day saving take place???? is krugman referring to putting dollars under a mattress?? if krugman is referring to placing dollars in a savings account as is described above where is the savings account money going to??? a loan??? isnt a loan used for consumption????

btw, every savings account i have ever had allowed debits.

does this function near describe the certificate of deposit offered at many banks now??

I can’t speak for all banks, but in those which I hold money “savings accounts” are not really savings account. A true savings account would be created by a contract which denoted the amount of time an individual surrendered the right to use said savings, allowing the bank to loan the capital out within that time with the promise of returning the deposit + interest at the end of the time specified on the contract. Current “savings accounts” are checking deposits where you can’t use the money as debit, but you can transfer from “savings” to “checkings” at any time without suffering consequences.

Simply loaning money does not cause credit expansion. Credit expansion occurs when money is loaned from checkings, because checkings accounts are usually used for present consumption, not future consumption. So, extending one note to one customer while extending another, based on the same account, is credit expansion.

does the current savings account products from banks operate differently than the current checking account?

if money was simply loaned i dont see where money creation would occur. if money is loaned and something else such as a spendable bank credit dollar was created that would seem like money creation?? is that what happens with both checking and savings acounts now???

I would suggest reading some type of introduction to economics. Just as well, if you could condense your questions into one post, that would be great. Thank you. Now, to answer your questions:

i was told that if you placed paper dollars in a savings account that the paper dollars in some way were loaned and bank-credit dollars were then issued to the depositor. is that incorrect???

in a sense the deposited paper dollars circulated and an newly created bank-credit dollar could circulate????

is that not the case???

In the truest sense of a savings account, this would not be the case. In a savings account, the saver would temporarily surrender ownership of capital so that the bank could loan said capital to an entrepreneur. At a certain point in time, the saver could redeem his capital plus whatever interest the bank promised to pay him. There are not multiple claims on that money. Money creation occurs when the bank loans money that is already being put in use by another individual, or when money is loaned from a checkings account, and then that money is put in a checkings account and re-loaned, et cetera.

I suggest reading Jesus Herta de Soto’s Money, Bank Credit and Economic Cycles. This book will answer your other questions, as well.

this doesnt make much sense. would more money mean greater simplicity of transactions??

What? No. Money is used as a means of exchange, because it simplifies transactions. Instead of having to trade bread for wood, so that one can exchange wood for apples, one can change bread for money so that that individual could purchase whatever he or she wanted.

It would make an otherwise complicated series of exchanges to finally buy what you wanted a simpler series of exchanges. It makes investment faster and simpler.

“Money is used to simplify transactions, although it makes difficult the concept of exchange of capital and whatnot since all you see is “money”.”

this doesnt make much sense. would more money mean greater simplicity of transactions??