How is using a reserve fund different from printing money? It is a common knowledge and has been explained here on SE that the source of value is production and consumption rather than money, and that accumulating money is thus pointless. Yet, &quot;rainy day funds&quot; do just that. What is their purpose?
For a layman like me, it seems extracting money from circulation to a reserve decreases inflation, while using that money later would just increase inflation. Then, I must be misunderstanding some basics.
Indeed, a sovereign does not normally save in its own currency, but rather in foreign currencies or other valuable assets, over the value of which it has no direct control, but only an indirect influence as any other actor. However, for a governmental-scale fund, the influence (presumably deflationary for increasing the fund and inflationary for spending it) would be so strong that it may print new money as well. Where is my understanding flawed?
No, accumulating money is not pointless. Money not being the source of value does not lead to it being of no value.
Money, including the type we use right now -called &quot;fiat money&quot;-, has 3 properties.

It is an accepted tool for carrying out transactions.
It is a way to measure a product's value.
It is a store of value.

The 3rd point is the one you're looking for. As long as the value of money (its purchasing power) does not drop then it is a proper way of storing value; you can keep your money and use it in the future (a &quot;rainy day fund&quot; perhaps)- this wouldn't happen if you were exchanging fish for cows for example.
It is apparent that money is not the best store of value, since it doesn't give its holder any interest just for holding it, unlike deposits in a bank, bonds and stocks.
A state can have multiple sources of property, money being one type of it. For reasons of diversification to risk it is preferred that assets are not of the same type.
On the topic of inflation and efficiency;
Neoclassical theory suggests that storing a reserve fund is not the same with money being destroyed and then printed anew. Everyone knows this money exists and is being stored, and will be used in case of need. So people, having rational expectations, already understand this amount of money as part of monetary policy and the implications of such policy (including inflation); which means that the current price level is already adjusted for this inflation.