From Sean Kennedy’s response (And I want this printed on a T-shirt): “An important distinction needs to be made here about real savings in the economy. When interest rates decline due to monetary stimulus, there’s less incentive to save, and the economy’s pool of real savings declines in favor of consumption. This is at the very moment that lower interest rates spur a new batch of investment in interest-rate-sensitive sectors of the economy: the capital-intensive sectors. But in order to complete these new investments, or reap profit upon their completion, the real pool of savings must be large enough to sustain the projects. Real savings, though counted and exchanged in money, essentially is saved real output: goods which were not earlier consumed upon production. This saved pool of goods must be allocated to sustain the new investment projects.”