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To: Ilaine who wrote (106771)	6/6/2001 9:18:52 AM
From: yard_man	Read Replies (1) \| Respond to of 436258

>>don't know what "the principle of savings being linked to investment" means in this context<< It just means a stable monetary base -- such that savings are required to fuel investment in production, a monetary base that is constrained like our real economic resources, e.g. labor, raw materials, other productive inputs. Wouldn't you agree that investment in productive capacity has been, at least for the last 5 years, pretty much decoupled from savings? Is it not reasonable to assume (along the Austrian line of thinking) that if credit increases freely, disconnected from savings (i.e. foregone consumption) that economic capital (real resources, not just $s) will be directed to ventures that are not economic in the mid to long term? Wasn't really talking about gold or a gold standard -- more about whether a monetary base should be stable or "managed" to direct capital investment as central bankers (planners?) think is best for the economy (as opposed to the marketplace performing that allocation). Don't these ideas have some basic appeal to someone who believes in free markets??