Huh? That makes no sense.
Exactly. This is expert testimony in front of Congress? Saving too little is most definitely not the the reason for the decline of the dollar. Why in the hell would anyone put their money in the bank for paltry interest when they can get a much higher return by investing? Additionally, inflation would erode your savings with the interest that banks pay. Everyone would be losing money. The problem is the that the Federal Reserve prints freakin money out of thin air without anything backing it except IOUs. They continue to inflate the supply of dollars at will. This inherently has too many dollars chasing the same assets and erodes the value of existing dollars. Basically, they are inflating the money supply to the moon. The only reason that the dollar holds any value at all is that some people believe the US will not default in the future. That view seems to be changing as more and more of the worlds Central Banks diversify away from the US dollar. Right now, it’s in the interest of Japan, China, and some middle eastern countries to help prop up the dollar being as they hold so many of them. They want to at least get out at some point in the future without a total loss.
Makes perfect sense. Say our economy needs $1 trillion in investment every year. If we save $250 billion for that investment and foreign dollar holders kick in another $750 billion, our $1 trillion investment need is met.