I remember reading an article where Greenspan blamed unusually low long term rates on a glut in world savings, and it got me thinking. Our country’s capital comes from its savings, as does the natural rate of interest. Now let’s say we have a savings rate of zero, or even a negative rate? If we simply borrow the glut from around the world, does that pool of savings substitute and function the same as if it were domestic savings? If so, wouldn’t it give credibility to Greenspan’s assertion that rates weren’t artificially low?
No. Greenspan is trying to blame anyone and everyone except for himself and his economic theories based upon the fantasy that by increasing the amount of money or lowering the interest rate that you can make people wealthier when in actuality you make people poorer.
The capital of every country comes from its private savings. Government and fiat money are a drain on the priviate savings.
As for borrowing the glut of savings from the rest of the world. The idea that you can lend your customers money to buy your stuff is a common business practice that is not stable. The USA has been guilty of this in its dealings with the UK several times during the 20th Century. The good thing for all parties involved is that these relationships are temporary and unstable. And as we are seeing today in the relationship between the USA and China that it will break down. Eventually China will get tired of receiving decreasingly valueless dollars for the stuff they send and begin to cut back on both. If you want an economic theory that recommends this, then this can be best described as a subset of Mercantilism.