Purchasing power of the blacksmith is only greater if he spends his savings. If he doesn't spend his savings, everything works the same but with slightly different price levels. If he spends his savings he can buy stuff. Duh.
Not that simple. The problem is that if he saves
in the short term he can increase his overall spending power significantly in the longer term, so he has no incentive to spend money now rather than later.
How exactly? If money is slightly more valuable, everything will have lower price levels, including the blacksmith's services. His income will consist of fewer, more valuable units just like everyone else.