There is an elephant in the living room that few dare mention. By seeking safety, savers have created unprecedented risk for the global economy.

But savers have been protected from their reckless saving. They have been protected because no one dares let banks fail, or no one dares let governments go bust. Above all, savers’ deposits are protected.

This morning, The Telegraph slated government plans to penalise savers. It said that by imposing higher capital gains tax it is punishing those who have diligently saved, or through dint of hard work have invested in property, perhaps via their second home.

But risk-averse savers need to wake up to the reality that unless their money is pumped into areas which can create wealth, their savings can suck dynamism from the economy. Growth which is driven by surging property prices has no long-lasting value. Investors pile their money into property because it is safe, and in the process help create a potentially cataclysmic bubble.

The chief executive of Standard Chartered, Peter Sands, said earlier this week, that savers should only see their savings guaranteed up to the £50,000 limit protected by law. He said that if their bank fails, they should lose the rest. His comments are hugely controversial, but he may be right.

Savers have been protected from the risk of default. There are occasions when only default can solve a problem, but because savers are divorced from this risk, their actions distort the market.

As was said in the previous piece, the biggest risk in business is to not take a risk. It is the same with saving. Savers who think they can avoid risk altogether, are in fact creating risk. But because they are protected, they are not seeing the consequences of their actions.

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