Investing is effectively lending it out to someone else to spend to your mutual benefit (them by spending it efficiently to make economic gain, and you by getti

Investing is effectively lending it out to someone else to spend to your mutual benefit (them by spending it efficiently to make economic gain, and you by getting a cut of that economic gain.) If nobody's spending, though, you can 'invest' all you want - there's no broader economic gain from letting someone else hoard your money instead of doing it yourself. You'll only gain interest from those willing to trade their long term interests for their short term ones. There's simply more supply of money, and less demand for it, resulting in less return on your investments. As an (extreme and unrealistic) example, your bank isn't going to give you a high interest rate if the only person spending money instead of investing it all is Bob, who's occasionally willing to borrow at 1% to buy a new TV when his old one breaks. In fact, you'd be lucky for them to even be willing to store your dollars without a fee: What's in it for them? They've already got what they need to lend to Bob covered a million times over. Consumers aren't the only ones buying, but their lack of buying has knock-on effects on broader investment opportunities - if Bob's the only one buying TVs, TV manufacturers certainly won't be spending money on fancy new equipment. Their suppliers won't be spending money building new mines for materials or manufacturing equipment for construction. This all translates into fewer opportunities for investments, and less demand for your money with which to invest.