You have confused the total level of Japan's savings with the surplus of such savings over domestic investment.
Thus, even if a rise in the return on investment reduces the level of domestic savings it will not lead to a reduction in the surplus of such savings over investment.
This does not, however, reduce the structural surplus of savings over domestic investment, since private investment is also above its equilibrium level to a similar degree.
On the other hand, if rising productivity and prosperity and savings are the sources of surplus wealth, then happy days!
Rather than forcing Germans, whose savings rates and current account surplus results from years of fiscal prudence, to lend even more money and suffer higher inflation so that the southern tier can receive more monetary stimulus, Dombret argues the citizens of deficit economies must spend less while working, producing and saving more.
FORBES: Germany And China Have The Gold And Will Make The Rules
In reality, China has a current-account surplus, which means that savings must exceed investment, not the other way around.
These subjects, which each receive a chapter in the report, differ markedly from last year's CEA outlook, which highlighted the capital account surplus, workforce skills, retirement savings, intellectual property and agriculture.
After all Italy also has a high savings rate, and it even enjoys a primary surplus, but it was not spared market contagion.
Chinese middle classes are not going to spend as much per capita as their North American counterparts, due to their higher savings rates, lack of social safety net and surplus of males relative to females.
Second Minister for Finance Mustapa Mohamed says the country is benefiting from a high rate of savings (42% of GNP), a current-account surplus and decelerating inflation.
"The government are not targeting an under-performing agency with a need to make savings as the DVLA is self-financing and produces a significant operating surplus, " he said.
There are other ways to shrink the gap between Germany's high savings rate and relatively low investment, the underlying reason for its current-account surplus.
Of course, one country's deficit is another country's surplus, but for the first time since 1994 emerging economies will have to compete for savings with an America where interest rates, both short- and long-term, are rising.
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