Savings - to be or not to be

Peter Schiff keeps talking about the importance of savings in an economy. I wiil go thru a few sentences from his book - 'the lender can benefit only if the borrower benefits' - I agree with this concept. 'but like any other resource, savings must be accumulated before it can be lent out', 'it is essential that Able, Baker, and Charlie continue to underconsume and save for a rainy day'. He goes on to say 'It's production that adds the value','Savings creates the capital that allows for the expansion of production. As a result, a dollar saved makes more of a positive economic impact than a dollar spent'. I have a hard time appreciating this view. How can everybody in an economy save? He has already said that there are borrowers and savers in the economy and that the lender (or saver) benefits only if the borrower benefits. There are only certain things we can save for a rainy day - like some stockpile of essential food items to temporarily respond to a natural calamity or a stockpile of oil to have some time to respond to an Arab oil embargo. These are one time stock building for an emergency. Most of economic activity is around exchange of goods and services between human beings. You are not going to underconsume a haircut to save for a rainy day. The savings is not a well understood concept - everybody keeps harping about savings without understanding it clearly.